Pacific Fairplay Widmer Complaint 14-12946

1 HONORABLE TIMOTHY W.
DORE
8 UNITED STATES BANKRUPTCY COURT

WESTERN DISTRICT OF WASHINGTON
9
In re
10 BANKRUPTCY NO. 14-12946-TWD
WILLIAM J. WIDMER, JR.
11 MADELINE LOPES WIDMER,
12 Debtors.
13 ADVERSARY NO. ___________

PACIFIC REALTY ADVISORS LLC, Court-
14 Appointed Receiver for FAIRPLAY FINANCIAL, COMPLAINT OBJECTING TO
INC. and FAIRPLAY FUNDING NW, LLC, DISCHARGEABILITY OF DEBTS
15
Plaintiff,
16 v.
17 WILLIAM J. WIDMER, JR.

MADELINE LOPES WIDMER,
18
Defendants.
19
20 Pacific Realty Advisors, LLC (“Plaintiff or “Receiver”), court-appointed general receiver for
21 Fairplay Financial, Inc. and Fairplay Funding NW, LLC (together, “Fairplay”) in their respective
22 receivership actions pending in King County Superior Court, In re Fairplay Financial, Inc., No. 13-2-
23
B USH S TROUT & K ORNFELD LLP

COMPLAINT OBJECTING TO DISCHARGEABILITY OF LAW OFFICES
DEBTS – Page 1 601 Union St., Suite 5000
Seattle, Washington 98101-2373
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Case 14-01305-TWD Doc 1 Filed 07/21/14 Ent. 07/21/14 14:40:36 Pg. 1 of 14
1 35048-3 and In re Fairplay Funding NW, LLC, No. 13-2-35045-9, by and through its undersigned
2 counsel, alleges and complains as follows:
3 I. PARTIES
4 1. William Widmer and Madeline Lopes Widmer (“Debtors” or “Defendants”) are
5 residents of King County, Washington.
6 2. William and Madeline Widmer filed a voluntary Chapter 7 bankruptcy petition on
7 April 17, 2014 (“Petition Date”) in the United States Bankruptcy Court for the Western District of
8 Washington at Seattle, which was assigned case number 14-12946.
9 3. Fairplay Financial, Inc. (“Fairplay Financial”) is a Washington corporation that
10 formerly employed William Widmer.
11 4. Fairplay Funding NW, LLC (“Fairplay Funding”) is a Washington limited liability
12 company whose sole member is Fairplay Financial.
13 5. On October 1, 2013, Fairplay Financial and Fairplay Funding each made a General
14 Assignment for the Benefit of Creditors and the Receiver was subsequently appointed by orders of the
15 King County Superior Court entered on October 7, 2013 in Case Nos. 13-2-35048-3 and 13-2-35045-
16 9.
17 6. Fairplay Financial and Fairplay Funding are creditors of the Debtors.
18 II. JURISDICTION AND VENUE
19 7. This Court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C. §§
20 1334 and 157; and 11 U.S.C. § 523.
21 8. This adversary proceeding is a core proceeding within the meaning of 28 U.S.C. §§
22 157(b)(2)(A), (I), and (J).
23

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1 9. Venue is proper in this Court under 28 U.S.C. § 1409. At all times relevant the
2 Debtors resided within the jurisdiction of this Court, conducted business within the jurisdiction of this
3 Court, and filed their bankruptcy petition within the jurisdiction of this Court.
4 III. FACTUAL ALLEGATIONS
5 10. Fairplay Financial is a holding company for several integrated subsidiary entities that
6 were formerly in the business of providing bridge loan financing, realty, property management and
7 other real estate services to clients in the State of Washington and other states in the Western United
8 States.
9 11. Fairplay Funding is a subsidiary of Fairplay Financial, and was in the business of
10 providing bridge loan financing services to investors to purchase real estate in Washington and other
11 states.
12 12. Defendant William Widmer (“Widmer”) was the CEO of Fairplay Financial from the
13 inception of the company until he was terminated on September 16, 2013.
14 13. Widmer was an officer and director of Fairplay Financial during all relevant times.
15 14. During the time he was an officer and director of Fairplay Financial, Widmer engaged
16 in multiple transactions that were intended to and did benefit Widmer or third parties to the detriment
17 of Fairplay, including loans, reconstruction projects, and real estate transactions, examples of which
18 are set forth below.
19 15. During the time he was an officer and director of Fairplay Financial, Widmer directly
20 or indirectly obtained funds from Fairplay through fraudulent means, engaged in transactions with
21 Fairplay, and/or used the credit of Fairplay to engage in personal financial transactions to the
22 detriment of Fairplay, examples of which are set forth below.
23

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1 16. During the time he was an officer and director of Fairplay Financial, Widmer made
2 material misrepresentations to and/or concealed material information from the Fairplay Board of
3 Directors and/or management to the detriment of Fairplay, including his own involvement in certain
4 real estate transactions, the lack of adequate funding sources to cover Fairplay’s losses, and his
5 repeated approval of loans in violation of company policy and lending regulations. Widmer made
6 such false and misleading statements with the intent that the Board or management of Fairplay
7 Financial would reasonably rely on the truth thereof in conducting Fairplay’s business. Fairplay
8 suffered damages as a result of its reasonable reliance on Widmer’s false and misleading statements.
9 A. The Boylston Transaction
10 17. In or about August 2013, Widmer submitted a false loan application to Fairplay in the
11 name of ATR, LLC, an entity that did not exist.
12 18. The loan was to be secured by certain real property located at 2731 Boylston Avenue
13 East, Unit #301, Seattle, WA 98102 (the “Boylston Condo”) which, Widmer represented, was owned
14 by ATR, LLC when in fact, it was owned by Widmer.
15 19. The false loan application submitted by Widmer contained the forged signature of
16 Richard Brent Qualls, a purported representative of ATR, LLC.
17 20. Prior to and/or during the loan application process, Widmer negotiated the sale of the
18 Boylston Condo to an entity called Ataro, LLC. The escrow for the sale transaction was to be handled
19 by Fidelity National Title Insurance Company (“Fidelity Title”).
20 21. Based on the false loan application submitted by Widmer, Widmer directed that
21 Fairplay approve the loan to ATR, LLC, and at Widmer’s direction, the loan was approved in the
22 principal sum of $728,000.
23

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1 22. Widmer manufactured false loan documents to evidence the loan, and gave Fairplay a
2 Promissory Note in the principal sum of $728,000 (the “Boylston Promissory Note”) containing the
3 forged signature of Richard Brent Qualls (“Qualls”). A true and correct copy of the Promissory Note
4 is attached as Exhibit A.
5 23. Knowing that ATR, LLC did not exist and that he owned and was planning to convey
6 the Boylston Condo to an unrelated third party, Widmer gave Fairplay a phony Deed of Trust against
7 the Boylston Condo that contained the forged signature of Qualls (the “Boylston Deed of Trust”). A
8 true and correct copy of the Boylston Deed of Trust is attached as Exhibit B.
9 24. Qualls did not sign the loan application, the Boylston Promissory Note, or the Boylston
10 Deed of Trust or authorize anyone to sign his name thereon, and was not aware of or involved in the
11 loan application or the loan.
12 25. Fairplay ultimately funded the loan in the amount of $650,000 and Widmer received
13 and deposited the proceeds into escrow with Fidelity Title. Widmer then instructed Fidelity Title to
14 use the funds to pay off his own existing loans that were secured by the Boylston Condo. Fidelity
15 Title did so, rendering the Boylston Condo unencumbered. Widmer then conveyed the Boylston
16 Condo to Ataro, LLC for no apparent consideration.
17 26. No payments have been made in repayment of the loan and the entire loan balance
18 remains outstanding.
19 B. The Watchtower Transaction
20 27. In January 2012, Widmer formed Watchtower, LLC, a Washington limited liability
21 company that shared a mailing address with Fairplay. Lorelei Juge, a Fairplay employee at the time,
22 was the sole member of and registered agent for Watchtower, LLC.
23

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1 28. On September 11, 2012, Lorelei Juge, at Widmer’s direction, assigned her 100%
2 membership interest in Watchtower, LLC to Gregory Schnider (“Schnider”), another Fairplay
3 employee, but remained the entity’s registered agent. Watchtower, LLC’s mailing address also
4 remained the same as Fairplay’s business address.
5 29. In or about September 2012, Widmer submitted a loan application to Fairplay in
6 Schnider’s/Watchtower’s name as the proposed borrower on the loan.
7 30. The loan application was for a loan in the amount of $500,000, $250,000 of which was
8 to be used to purchase certain real property located at 924 N. G Street, Tacoma, WA (the
9 “Watchtower Property”) through Watchtower, LLC. The remaining portion of the loan proceeds was
10 to be funded as a construction loan and used to rehabilitate and sell the Watchtower Property. The
11 loan was to be secured by the Watchtower Property.
12 31. To evidence the loan, Schnider, as the new Managing Member of Watchtower, LLC,
13 executed a Promissory Note in the sum of $374,400 and a Deed of Trust in favor of Fairplay, true and
14 correct copies of which are attached as Exhibits C and D.
15 32. On or about September 26, 2012, Fairplay funded a loan in the amount of $374,400
16 (the “Watchtower Loan”) and disbursed said funds to Watchtower, LLC, approximately $250,000 of
17 which was disbursed to the seller of the Watchtower Property, and the remaining portion of which was
18 to be used for construction on the Watchtower Property.
19 33. Widmer obtained additional construction funds from Fairplay (in addition to the initial
20 disbursement) that were booked to the Watchtower Loan at his direction, and instructed a contractor,
21 U.S. Construction, to perform work on his own personal residence and to bill that work to the
22 Watchtower Property by creating and submitting false invoices for work completed on the
23 Watchtower Property.

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1 34. U.S. Construction did not actually perform any construction work on the Watchtower
2 Property. Instead, its principal, Thomas Berk (“Berk”), at Widmer’s instruction, performed a
3 significant amount of construction work on Widmer’s personal residence and billed that work totaling
4 approximately $73,000 to the Watchtower Property by submitting false invoices that were paid by
5 Fairplay Funding under the Watchtower Loan through additional construction draws.
6 35. Very little construction work was actually completed on the Watchtower Property. It
7 was completely gutted and reframed from the inside, but remains completely unfinished and gutted
8 down to the studs.
9 36. Upon information and belief, Widmer formed Watchtower, LLC and used former
10 Fairplay employees Schnider and Juge as part of his attempt to hide the true ownership of the Property
11 from Fairplay and its primary lender, Columbia State Bank, for his own financial gain.
12 37. As a result of the Watchtower Transaction, Fairplay extended a loan in the total
13 approximate amount of $650,000 based on Widmer’s misrepresentations. No payments were ever
14 made toward the loan, and Schnider assigned his membership interest in Watchtower, LLC to Fairplay
15 to enable the Receiver to market and sell the Watchtower Property.
16 38. The Receiver managed to sell the Watchtower Property, and recovered net sale
17 proceeds of $217,206.63, leaving at least $430,000 in unpaid debt that Widmer fraudulently procured
18 and for which he is liable to Fairplay.
19 C. Unauthorized Expense Account Purchases
20 39. While he was an officer and director of Fairplay Financial, Widmer misappropriated
21 corporate assets and abused the company expense system by using corporate funds to purchase
22 personal luxury items, clothing, meals, travel, and other things for personal purposes and not in
23 furtherance of legitimate company business, including but not limited to the following:

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1 a. On April 20, 2013, Widmer bought himself a Rolex watch for $41,007.75 using
2 an American Express credit card that was issued to him by Fairplay Financial and that was to be used
3 solely for legitimate business expenses. This purchase was unauthorized.
4 b. In February, March, and April 2013, Widmer used his company American
5 Express credit card to purchase airline tickets, luxury hotel reservations, apparel, expensive meals,
6 recreational vacations, home furnishings, and other personal items for himself, his wife, and his
7 children totaling over $22,000 (not including the Rolex watch described above).
8 40. In connection with his misuse of the company expense system, Widmer misrepresented
9 to Fairplay and its employees or agents, with the intent that they would rely on such
10 misrepresentations, that the expenses he was charging to the company were in fact legitimate business
11 expenses. Fairplay personnel were ignorant to the false or misleading nature of Widmer’s
12 misrepresentations and did in fact reasonably rely on them in connection with Widmer’s misuse of the
13 company charge card and expense system.
14 D. Unauthorized Compensation
15 41. While he was an officer and director of Fairplay Financial, Widmer took unauthorized
16 cash compensation from the company totaling at least $100,000 by directing Fairplay employees to
17 pay him bonuses and dividends that were not authorized by or disclosed to the Fairplay Financial
18 Board of Directors.
19 E. The Hometown Bank Purchase Transaction
20 42. In 2012, Widmer sought to have Fairplay acquire the equity in Hometown National
21 Bank (“Hometown”), a nationally chartered community bank, for a purchase price of $5,000,000.
22 Widmer learned from the regulating agency, the Office of the Comptroller of Currency (“OCC”), that
23 Fairplay was not eligible to acquire Hometown.

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1 43. After learning that Fairplay was ineligible to acquire Hometown, Widmer nevertheless
2 continued to work to acquire the equity in Hometown. As part of his effort, Widmer convinced a
3 number of individuals to serve as the “purchasers” of the equity in Hometown. With assistance from
4 and representation by Keller Rohrback, LLP, Fairplay’s general counsel at the time, Widmer
5 structured the purchase and sale transaction so that Fairplay made its own funds available to purchase
6 the stock of Hometown along with a handful of individual investors, despite the fact that Widmer
7 knew that it was unlawful for a person to purchase the equity in a nationally chartered community
8 bank with borrowed funds.
9 44. In June 2012, Widmer caused Fairplay to wire $2,500,000 of Fairplay funds into
10 escrow to be used toward the purchase of Hometown. On information and belief, Keller Rohrback
11 administered that escrow.
12 45. On June 21, 2012, knowing that federal law prohibits the borrowing of funds to
13 purchase a chartered bank, Widmer advised the individual investors that they would need to take
14 ownership of Hometown individually in their own names, and provided those investors acquiring
15 greater than 5% of the shares in Hometown with a form on which he directed them to indicate that the
16 capital being used to purchase Hometown was not a loan from Fairplay to any investor.
17 46. Knowing that federal law prohibits the borrowing of funds to purchase a chartered
18 bank, Widmer falsely reported to the OCC that the funds available to purchase Hometown constituted
19 “cash on hand” from individuals and not borrowed funds, and Widmer caused Fairplay to lend the
20 $5,000,000 to the investors to purchase the Hometown equity, in violation of federal law.
21 47. In November 2012, Widmer caused Fairplay to wire an additional $2,500,000 of its
22 own funds that was used to purchase Hometown, and the purchase and sale transaction was
23 completed.

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1 48. At some point after the closing of the sale transaction, the individual purchasers of
2 Hometown executed promissory notes in favor of Fairplay to evidence the borrowed Fairplay funds
3 that were used to purchase Hometown.
4 49. On information and belief, Hometown Bank is not a saleable asset as a going concern,
5 and Fairplay’s losses on account of the Hometown Bank transaction currently exceed $5,800,000,
6 which includes the purchase price and attorneys’ fees incurred in connection with the transaction.
7
IV. FIRST CAUSE OF ACTION
8 Obtaining Property through False
Pretenses, False Representations, or Actual Fraud
9 (Boylston Transaction) – 11 U.S.C. § 523(a)(2)(A)
10 50. Plaintiff incorporates the foregoing paragraphs as if fully set forth herein.
11 51. Widmer made knowingly false representations to Fairplay by fabricating and
12 submitting a forged loan application to Fairplay in the name of an entity that did not exist.
13 52. Widmer made such false representations with the purpose and intent to deceive
14 Fairplay in order to obtain loan proceeds that did not belong to him and were not intended for his use.
15 53. Fairplay reasonably relied upon Widmer’s fabricated loan application in approving the
16 loan and disbursing the loan proceeds.
17 54. As a direct and proximate result of Widmer’s false representations, Fairplay loaned a
18 substantial sum of money and sustained losses of approximately $650,000 in connection with the
19 Boylston transaction.
20 55. Such losses with respect to the Boylston transaction constitute a nondischargeable debt
21 owing to Fairplay by Debtors pursuant to 11 U.S.C. § 523(a)(2)(A).
22
23

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1
V. SECOND CAUSE OF ACTION
2 Obtaining Property through False
Pretenses, False Representations, or Actual Fraud
3 (Watchtower Transaction) – 11 U.S.C. § 523(a)(2)(A)
5 57. By forming Watchtower, LLC and submitting a loan application to Fairplay in the
6 name of Watchtower, LLC and Gregory Schnider, Widmer made knowingly false representations to
7 Fairplay regarding the purpose of the loan and the ownership of the real property that was to secure
8 the loan.
9 58. Widmer made such false representations with the purpose and intent to deceive
10 Fairplay in order to obtain loan proceeds that did not belong to him and that were not intended for his
11 use.
12 59. Fairplay reasonably relied upon Widmer’s representations in approving the loan to
13 Watchtower/Schnider and disbursing the loan proceeds to Watchtower, LLC.
14 60. Fairplay sustained losses of approximately $430,000 in connection with the
15 Watchtower transaction as a direct and proximate result of Widmer’s false representations.
16 61. Fairplay’s losses with respect to the Watchtower transaction constitute a
17 nondischargeable debt owing to Fairplay by Debtors pursuant to 11 U.S.C. § 523(a)(2)(A).
18
VI. THIRD CAUSE OF ACTION
19 Fraud or Defalcation While Acting in a
Fiduciary Capacity (Officer, Director, and/or Shareholder)
20 (Unauthorized Expense Account Purchases) – 11 U.S.C. § 523(a)(4)
22 63. In his capacity as an officer and director of Fairplay Financial, Widmer owed fiduciary
23 duties to Fairplay, Fairplay’s Board of Directors, and Shareholders.

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1 64. Widmer’s misappropriation of Fairplay’s assets and unauthorized use of the company
2 expense system to purchase personal luxury items, clothing, meals, airline tickets and family
3 vacations, among other things, constitute fraud or defalcation while acting in a fiduciary capacity.
4 65. As a direct result of Widmer’s fraud and defalcation while acting in a fiduciary
5 capacity, Fairplay sustained losses totaling approximately $75,000. Such losses constitute a
6 nondischargeable debt owing to Fairplay by Debtors pursuant to 11 U.S.C. § 523(a)(4).
7
VII. FOURTH CAUSE OF ACTION
8 Embezzlement – 11 U.S.C. § 523(a)(4)
10 67. In his capacity as an officer and director of Fairplay Financial, Widmer was in
11 possession and/or control of company assets, including company funds and bank accounts.
12 68. Widmer obtained unauthorized cash compensation from Fairplay by directing
13 Fairplay’s employees to pay him extra bonuses and dividends, and thereby appropriated company
14 funds to a use other than that for which they were entrusted to him and committed embezzlement for
15 purposes of 11 U.S.C. § 523(a)(4).
16 69. Widmer embezzled at least $100,000 from Fairplay and such amount constitutes a
17 nondischargeable debt owing to Fairplay by Defendants pursuant to 11 U.S.C. § 523(a)(4).
18
VIII. FIFTH CAUSE OF ACTION
19 Fraud or Defalcation While Acting in a
Fiduciary Capacity (Officer, Director, and/or Shareholder)
20 (Hometown Bank Purchase Transaction) – 11 U.S.C. § 523(a)(4)
70. Plaintiff incorporates the foregoing paragraphs as if fully set forth herein.
21
71. In his capacity as an officer and director of Fairplay Financial, Widmer owed fiduciary
22
duties to Fairplay, Fairplay’s Board of Directors, and Shareholders.
23

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1 72. Widmer’s (1) structuring of the Hometown transaction so that Fairplay made its own
2 funds available to purchase the stock of Hometown along with a handful of individual investors, (2)
3 his misappropriation of $5,000,000 of Fairplay funds to purchase Hometown, knowing that federal
4 law prohibits such a transaction, and (3) his false reports to the OCC that the funds available to
5 purchase Hometown constituted “cash on hand” from individuals and not borrowed funds, constitute
6 fraud or defalcation while acting in a fiduciary capacity.
7 73. As a direct result of Widmer’s fraud and defalcation while acting in a fiduciary
8 capacity in connection with the Hometown transaction, Fairplay sustained losses totaling at least
9 $5,800,000. Such losses constitute a nondischargeable debt owing to Fairplay by Debtors pursuant to
10 11 U.S.C. § 523(a)(4).
11 IX. SIXTH CAUSE OF ACTION

(Hometown Bank Purchase Transaction) – 11 U.S.C. § 523(a)(19)
12
74. Plaintiff incorporates the foregoing paragraphs as if fully set forth herein.
13
75. Widmer’s misrepresentations made in connection with the Hometown purchase
14
transaction constitute fraud, deceit, or manipulation in connection with the purchase of a security
15
under 11 U.S.C. § 523(a)(19).
16
76. To the extent Fairplay incurs any debt in connection with the Hometown purchase
17
transaction as a result of a violation of any federal or state securities law or regulation, such debt
18
would constitute a nondischargeable debt owing to Fairplay by Widmer under 11 U.S.C. §
19
523(a)(19)(i) and/or (ii).
20
21 X. PRAYER FOR RELIEF
22 WHEREFORE, Plaintiff prays for the following relief:
23

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1 A. For an order and judgment determining that the debts of William Widmer owed to
2 Fairplay totaling at least $6,800,000, the exact amount of which is to be determined at trial, are
3 nondischargeable.
4 B. For a money judgment, including without limitation, consequential damages and
5 attorneys’ fees in an amount to be determined at trial.
6 C. For such other and further relief as the Court deems just and equitable.
7 DATED this _21st_ day of July, 2014.
8 BUSH STROUT & KORNFELD LLP
10 By_/s/ Bridget G. Morgan_______________

Armand J. Kornfeld, WSBA #17214
11 Katriana L. Samiljan, WSBA #28672
Bridget G. Morgan, WSBA #43623
12 Attorneys for John P. Rader, Managing Member
of Pacific Realty Advisors, LLC, General
13 Receiver for Faiplay Financial, Inc. and Fairplay
Funding NW, LLC
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1 HONORABLE TIMOTHY W.

8 UNITED STATES BANKRUPTCY COURT

13 ADVERSARY NO. ___________

17 WILLIAM J. WIDMER, JR.

B USH S TROUT & K ORNFELD LLP

2 counsel, alleges and complains as follows:

4 1. William Widmer and Madeline Lopes Widmer (“Debtors” or “Defendants”) are

5 residents of King County, Washington.

6 2. William and Madeline Widmer filed a voluntary Chapter 7 bankruptcy petition on

8 Washington at Seattle, which was assigned case number 14-12946.

9 3. Fairplay Financial, Inc. (“Fairplay Financial”) is a Washington corporation that

10 formerly employed William Widmer.

11 4. Fairplay Funding NW, LLC (“Fairplay Funding”) is a Washington limited liability

12 company whose sole member is Fairplay Financial.

17 6. Fairplay Financial and Fairplay Funding are creditors of the Debtors.

18 II. JURISDICTION AND VENUE

20 1334 and 157; and 11 U.S.C. § 523.

21 8. This adversary proceeding is a core proceeding within the meaning of 28 U.S.C. §§

22 157(b)(2)(A), (I), and (J).

B USH S TROUT & K ORNFELD LLP

4 III. FACTUAL ALLEGATIONS

13 inception of the company until he was terminated on September 16, 2013.

18 are set forth below.

22 detriment of Fairplay, examples of which are set forth below.

B USH S TROUT & K ORNFELD LLP

9 A. The Boylston Transaction

11 name of ATR, LLC, an entity that did not exist.

14 by ATR, LLC when in fact, it was owned by Widmer.

16 Richard Brent Qualls, a purported representative of ATR, LLC.

19 by Fidelity National Title Insurance Company (“Fidelity Title”).

22 principal sum of $728,000.

B USH S TROUT & K ORNFELD LLP

11 loan application or the loan.

16 Condo to Ataro, LLC for no apparent consideration.

19 B. The Watchtower Transaction

B USH S TROUT & K ORNFELD LLP

2 membership interest in Watchtower, LLC to Gregory Schnider (“Schnider”), another Fairplay

4 remained the same as Fairplay’s business address.

5 29. In or about September 2012, Widmer submitted a loan application to Fairplay in

6 Schnider’s/Watchtower’s name as the proposed borrower on the loan.

11 loan was to be secured by the Watchtower Property.

14 correct copies of which are attached as Exhibits C and D.

18 to be used for construction on the Watchtower Property.

B USH S TROUT & K ORNFELD LLP

8 down to the studs.

13 approximate amount of $650,000 based on Widmer’s misrepresentations. No payments were ever

15 to enable the Receiver to market and sell the Watchtower Property.

18 and for which he is liable to Fairplay.

19 C. Unauthorized Expense Account Purchases

B USH S TROUT & K ORNFELD LLP

3 solely for legitimate business expenses. This purchase was unauthorized.

13 company charge card and expense system.

19 E. The Hometown Bank Purchase Transaction

23 Fairplay was not eligible to acquire Hometown.

B USH S TROUT & K ORNFELD LLP

8 bank with borrowed funds.

11 administered that escrow.

B USH S TROUT & K ORNFELD LLP

3 that were used to purchase Hometown.

11 51. Widmer made knowingly false representations to Fairplay by fabricating and