COMPLAINT for Declaratory and Injunctive Relief (NO PROCESS: jury demand; against Jacob A Appelsmith, William Haraf, Kamala Harris, Traci Stevens, Robert Venchiarutti ( Filing fee $ 350, receipt number 54611010747). Filed by Think Computer Corp. (Attachments: # (1) Schedule A to Complaint, # (2) Civil Cover Sheet) (bw, COURT STAFF) (Filed on 11/14/2011) Modified on 11/28/2011 (bw, COURT STAFF).
No tags have been applied so far. Sign in to add some.
Page 1 UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
THINK COMPUTER CORPORATION,
Plaintiff,
v.
ROBERT VENCHIARUTTI, in his official
capacity as Deputy Commissioner of the California
Department of Financial Institutions; WILLIAM
HARAF, in his official capacity as Commissioner
of the California Department of Financial
Institutions; TRACI STEVENS, in her official
capacity as Acting Secretary of the California
Business, Transportation and Housing Agency;
JACOB A. APPELSMITH, in his official capacity
as Senior Advisor to the Governor of the State of
California; EDMUND G. BROWN, JR., in his
official capacity as Governor of the State of
California; and KAMALA HARRIS, in her official
capacity as Attorney General of the State of
California,
Case No.: CV11-05496
COMPLAINT FOR
DECLARATORY AND
INJUNCTIVE RELIEF AND
JURY DEMAND
Defendants.
Plaintiff Think Computer Corporation hereby states as follows:
INTRODUCTION AND SUMMARY
1.
Each year, billions of dollars worth of retail transactions are processed through
electronic means via plastic debit and credit cards. These plastic cards have largely taken the
place of cash and coin in the United States, and their issuance by banks has become the source of
enormous controversy for a variety of reasons. Cards are expensive for merchants to process and
frequently levy onerous interest rates on those consumers who are unable to pay their bills in a
1Page 2 timely fashion. Yet despite all of the problems associated with plastic payment cards, there are
only four major issuers, and otherwise barely any meaningful competition exists.
2.
Money transmitters, non-bank entities that handle funds on behalf of third-parties on
a regular basis, are well-positioned to introduce products competitive with plastic cards, with one
caveat: they are currently regulated by a patchwork of state laws (“Money Transmission Laws”
or “MTLs”), that have been gradually introduced in almost every state since the mid-1960s.
These statutes initially came into being in response to specific money order scandals affecting
particular localities, until many years later, when large financial corporations realized that they
could also be effective tools used as barriers to entry, at which point they began to proliferate.
3.
This case arises from the efforts of a regulatory agency of the State of California,
namely the Department of Financial Institutions (DFI), to enforce the 2010 Money Transmission
Act (MTA), one of approximately forty-seven MTLs involving domestic money transmission.
The DFI, under the leadership of Defendant William Haraf, has repeatedly refused to divulge
public information obviously necessary to apply for a license with a reasonable chance of
approval. The DFI has further made false statements regarding Plaintiff; threatened to prosecute
Plaintiff and Plaintiff’s principals for operating as a money transmitter even in jurisdictions
outside of California where Plaintiff was otherwise legally permitted to do so; and enforced the
MTA on an arbitrary and capricious basis based on the “personal experience” of DFI staff,
including Defendant Robert Venchiarutti.
4.
Over a period of several months, Plaintiff’s attempts to resolve its differences with
the DFI ultimately involved requesting assistance from Defendant Traci Stevens, Acting
Secretary of the California Business, Transportation and Housing Agency (BTH) that oversees
DFI, and Defendant Edmund G. Brown, Jr., Governor of the State of California, who oversees
2Page 3 BTH. Plaintiff’s requests to the Governor for assistance were eventually delegated to and
summarily dismissed by Defendant Jacob A. Appelsmith, Senior Advisor to the Governor.
5.
All states, including the State of California, are bound by the United States
Constitution to refrain from issuing and regulating state-wide currencies, and to refrain from
regulating interstate commerce. Defendants have unlawfully attempted to do at least the latter by
arbitrarily restricting the flow of dollars into and out of California, and by specifically
prohibiting payment processors from conducting interstate commerce without meeting
requirements that are impossibly difficult to satisfy forty-seven times over for all but a very few
enormous organizations.
6.
Plaintiff, a private corporation, provided money transmission and stored value
services legally in the State of California through June 30, 2011, prior to a deadline established
by the MTA for existing money transmitters per California Financial Code § 1872 (the
“Compliance Deadline”). After the deadline, without the ability to file an application for
licensure with a reasonable chance of approval by the DFI, Plaintiff ceased operations in
California and nationwide. This caused damage to Plaintiff’s reputation, business operations,
competitive edge, and earnings.
7.
Many of Plaintiff’s competitors whose activities also clearly fell within the scope of
the MTA continued operating regardless, either unaware of or unconcerned about the new law
and the potential criminal penalties for violation. Plaintiff’s reputation was indisputably harmed
by the DFI’s arbitrary enforcement efforts when many individuals in the technology and finance
industries reasonably questioned what Plaintiff had done “wrong” to deserve regulatory scrutiny
from which Plaintiff’s many unlicensed competitors were effectively exempt.
3Page 4 8.
Consequently, Plaintiff eventually filed thirty-three formal complaints about
unlicensed money transmitters with the DFI (see attached Schedule A), to highlight the erratic
and arbitrary nature of its enforcement efforts.
9.
The inhibition of Plaintiff’s ability to conduct interstate commerce is a symptom of a
broken financial regulatory system that has been hijacked by expensive lobbyists, that uses the
phrase “consumer protection” as a thin veneer for supporting wealthy private interests, and that
cannot keep up with the pace of changing technology. The associated problems in California,
though exacerbated by the inept bungling of bureaucrats in that state, apply generally to all states
with MTLs. By policy and practice, the California DFI and all similar state regulatory
institutions have violated, and are violating, the rights of any non-bank entity seeking to act as a
conduit by which other parties can conduct interstate commerce. Such entities include thousands
of payroll processors, law firms, real estate agents, escrow services, private universities, and
technology companies.
10. To remedy these violations of administrative law and constitutional violations and
put an end to the ongoing harm caused by Defendants, Plaintiff Think Computer Corporation
seeks declaratory and injunctive relief invalidating the California MTA and all MTLs and
prohibiting their enforcement. Plaintiff further seeks monetary damages from the State of
California for the irreparable harm done to the company’s reputation, competitive edge, earnings,
and future potential.
JURISDICTION
11. This action raises questions under Article I, Section 8, Clause 3 (the “Commerce
Clause”) of the United States Constitution, as well as Article I, Section 10, Clause 1 of the
United States Constitution.
4Page 5 12. This Court has original jurisdiction over these federal claims pursuant to 28 U.S.C.
§§ 1331 and 1343, and has jurisdiction over state law and common law claims pursuant to the
doctrine of pendant jurisdiction.
13. This Court has authority to award the requested declaratory relief under 28 U.S.C. §
2201; the requested injunctive relief under 28 U.S.C. 1343(3); the requested damages under 28
U.S.C. 1343(3); and attorney’s fees under 42 U.S.C. § 1988.
VENUE
14. Venue is proper under 28 U.S.C. § 1391 in the Northern District of California
because a substantial part of the actions or omissions giving rise to this case occurred within this
District, and at least one Defendant resides or operates within this District.
THE PARTIES
Plaintiff
15. Plaintiff Think Computer Corporation (“Think”) is a privately-held Delaware
corporation with its headquarters located at 3260 Hillview Avenue, Palo Alto, CA 94304-1226
in Santa Clara County, in this District. Its President and CEO is Aaron Greenspan.
Defendants
16. Defendant Robert Venchiarutti is Deputy Commissioner, Money Transmitters of the
California DFI. He is responsible for the policies and procedures carried out by the DFI relating
to money transmission and stored value, including enforcement of the MTA. Defendant
Venchiarutti works at least part-time in the San Francisco office of the DFI, within this District.
He is sued in his official capacity.
17. Defendant William Haraf is Commissioner of the California DFI. He is responsible
for the policies and procedures carried out by the DFI, including enforcement of the MTA.
5Page 6 Defendant Haraf works at least part-time in the San Francisco office of the DFI, within this
District. He is sued in his official capacity.
18. Defendant Terri Stevens is Acting Secretary of the California Business,
Transportation and Housing Agency (BTH). She supervises the DFI and is responsible for
enforcement of the MTA. She is sued in her official capacity.
19. Defendant Edmund G. Brown, Jr. is Governor of the State of California. He
supervises the BTH and is responsible for enforcement of the MTA. He is sued in his official
capacity.
20. Defendant Kamala Harris is Attorney General of the State of California. Defendant
Harris (hereinafter, the “Attorney General”) is responsible for the enforcement of the MTA and
is sued in her official capacity.
FACTUAL BACKGROUND
A. The 2010 California Money Transmission Act
21. On August 20, 2010, the California General Assembly voted for passage of
Assembly Bill 2789, the Money Transmission Act. The MTA, sponsored exclusively by a
financial industry lobbying group called The Money Services Round Table (which counts several
multi-billion dollar corporations as its members) and written with the assistance of Defendant
Venchiarutti, combined three prior California laws regulating financial institutions into one. It
also established new requirements for entities wishing to transmit money domestically (i.e.
within the United States). Prior to the MTA, only money transmitters dealing in the international
transmission of funds had been regulated by California law.
22. Former California Governor Arnold Schwarzenegger signed the bill on September
30, 2010 and the MTA became law effective January 1, 2011, with a 180-day grace period
allowing existing, unlicensed money transmitters to continue operations until July 1, 2011, at
6Page 7 which point an application for a license was required to be on file with the DFI in order to legally
proceed with money transmission.
23. Congress’s prior passage of the USA PATRIOT Act made penalties for violating any
state money transmission law especially severe. § 373 of the USA PATRIOT Act modified 18
U.S.C. 1960 by broadening the meaning of an “unlicensed money transmitting business” to,
according to the Commonwealth of Massachusetts, “eliminate the need to prove that the business
knowingly operated without a license. In addition, the definition includes anyone who fails to
register as a money transmitter with FinCEN.”1
24. California is one of forty-six states (plus the District of Columbia and certain U.S.
territories) that enforce MTLs related to domestic money transmission and stored value (see
attached Schedule B). Each MTL requires the entity wishing to transmit money in that
jurisdiction to fill out completely different forms; pay different application fees on differing
bases; raise surety bonds of differing amounts in the absence of a federal insurance program for
money transmitters similar to the Federal Deposit Insurance Corporation (FDIC); meet different
minimum net worth and/or asset size requirements; provide fingerprints and data for criminal
background checks in differing formats; register with different state agencies unrelated to finance
for differing purposes; wait different lengths of time for approval; and post-licensure, to provide
different reports at different frequencies containing different data to different agencies.
25. Despite the existence of organizations such as the Money Transmitter Regulators
Association, of which Defendant Venchiarutti is Vice-President, and which counts most states
with MTLs as its members, there is absolutely no standardization between states in any regard
related to the regulation of money transmission.
1
http://www.mass.gov/?pageID=ocaterminal&L=4&L0=Home&L1=Business&L2=Banking+Industry+Services&L3
=Industry+Letters&sid=Eoca&b=terminalcontent&f=dob_patriot&csid=Eoca.
7Page 8 26. The United States Department of the Treasury does coordinate the registration of
money transmitters through its FinCEN division, but this function exists mainly as a data
collection mechanism to prevent fraud due to the requirements of the federal Bank Secrecy Act
(BSA).
27. The MTA’s specific requirements for new money transmitters wishing to hold and
transmit funds domestically or internationally are complex and among the most onerous in the
nation when compared with the requirements of most other states. The MTA requires $500,000
in “tangible net worth” (shareholder equity) at all times, in addition to a $250,000 surety bond
for companies engaging in money transmission, a $500,000 surety bond for companies providing
stored value products, a non-refundable $5,000 application fee, a criminal background check, a
business plan, pro-forma financial statements for three years, audited past financial statements,
the formal paper application, and a pre-application interview.
28. In contrast, many other states have different requirements. The State of Alabama
requires a $25,000 surety bond with its MTL application, a fee under $500, and no interview.
The State of Pennsylvania requires a $1,000,000 surety bond with its MTL application but has no
tangible net worth requirement. The State of Hawaii requires a $1,000 scalable surety bond with
its MTL application and prefers digital fingerprints, which the State of Louisiana disallows.
29. Banking is a close analog to money transmission, and on a relative basis, the state
regulatory regime for banks, managed by the parties enumerated in the attached Schedule B,
including Defendants, generally involves even more stringent financial prerequisites for
applicants wishing to obtain bank charters. There are two key differences, however. First, while
a bank could decide to apply for a charter in any given state, it could instead choose to apply for
a national charter, allowing it to operate in all fifty states without having to file fifty applications,
raise fifty times as much capital, and report to fifty separate regulators. Money transmitters have
8Page 9 no such option due to MTLs. Second, national charters are made possible by an insurance
network that covers every licensed institution nationwide, regardless of location, charter type or
asset size, in the form of FDIC insurance for banks or National Credit Union Administration
(NCUA) insurance for credit unions. These types of insurance work because premiums paid by
the insured parties cover each other. In contrast, each money transmitter’s premiums insure only
itself. Though bond underwriters are able to offset their risk by collecting bond premiums from
multiple entities, the risk to consumers remains the same, and the cost to bondholders (the money
transmitters) is enormous.
30. Due to the wildly different requirements for licensure, the MTA and all MTLs have
an effect equivalent to that of establishing intangible currencies on a state-by-state basis. In a
hypothetical purely digital society, one that the United States is quickly moving toward, currency
can be defined as a set of restrictions on information that is used to represent debts. The
equivalent of a state-issued currency in such a society is therefore a set of restrictions on
monetary transfers within each state by each state, which is functionally equivalent to the present
set of MTLs.
31. Though the apparatus for a federal regulator of money transmitters already exists in
the form of the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN),
its power is severely limited by state regulators. Despite nominal goals of consumer protection,
MTLs so restrict the competitive environment and so fragment the regulatory regime that
consumers are actually harmed by monopolistic business practices and regulatory arbitrariness to
an extent that vastly exceeds the extremely limited protection offered by surety bonds.
32. Investors who might support small corporations in their efforts to acquire licenses are
generally spooked by the regulatory uncertainty surrounding money transmission. The MTA
9Page 10 and all MTLs therefore have a chilling effect on competition in the payment processing market,
as well as other markets that involve money transmission.
33. The MTA restricts entities wishing to do business with California residents, and not
just entities physically located in California. Therefore, despite being a state law, the MTA’s
scope extends far beyond California’s borders, encompassing the entire nation. Even though
California law enforcement has no jurisdiction outside of the state, the combined influence of the
USA PATRIOT Act and the DFI’s policy of referring all offenders to the regional United States
Attorney’s Office means that the State of California effectively polices the entire country, as
does each state’s financial regulator. This, too, has a chilling effect on competition in the
financial sector.
B. Think’s Actions as a Money Transmitter Prior To Passage of the MTA
34. Plaintiff began researching, designing and investing in the FaceCash mobile payment
system (“FaceCash”) in late 2008, well before any domestic MTL had been proposed in
California. Plaintiff formally launched FaceCash in May, 2010. The FaceCash system had
several aims: first and foremost, to lower payment processing, or interchange, fees for businesses
small and large. In addition, FaceCash was designed to simplify the process of computing taxes
and accounting reports generally for merchants, and to make electronic receipts and coupons a
reality for consumers. The system achieved this through the use of Think’s proprietary software
and patent-pending technology. By the end of June, 2011, despite facing regulatory constraints
in the vast majority of the country that posed a problem for national retailers otherwise extremely
interested in the payment system, Think had signed up twenty-five merchants and approximately
500 consumers for FaceCash.
35. Working on a pre-paid debit model, FaceCash involved holding consumer deposits in
a pooled bank account until such time as a consumer requested a withdrawal from their given
10Page 11 FaceCash account, or the money was spent at a participating merchant. Due to the necessity of
holding consumer deposits for the model to succeed, Plaintiff’s activities fell within the scope of
the MTA.
36. On June 30, 2011, prior to the MTA’s compliance deadline, the risk posed to
consumers by Plaintiff’s money transmission activities was extremely minimal, if not zero. Up
until the deadline, Plaintiff’s average daily money transmission volume was close to zero as
Plaintiff had only successfully finished the merchant side of the product two days prior.
Plaintiff’s cash assets always exceeded its liabilities to FaceCash depositors by a significant
factor. By design, Plaintiff did not extend credit to FaceCash consumers, nor did Plaintiff make
loans as a bank might. Plaintiff also carefully tracked account balances and fraud rates (which
were minimal), meaning that even in the highly unlikely event of default Plaintiff could still
afford to refund every consumer’s funds.
37. No formal complaints were filed with any regulatory agency against Plaintiff,
including the DFI, prior to the Compliance Deadline or as of the date of this briefing. Nor has
Plaintiff ever been named as a defendant in any civil lawsuit, any criminal charge, or any legal
proceeding involving money transmission in any way.
38. Plaintiff contacted the DFI by telephone in mid-2010 to ensure that it was in
compliance with any applicable state laws. The call was short: Mr. Julio Prada informed
Plaintiff that no license was necessary for domestic money transmission and hung up.
39. Plaintiff next contacted the DFI by e-mail on April 1, 2011 to inquire as to the status
of money transmission law in California after reading an article suggesting that policies had
changed. Mr. Prada responded promptly indicating, “We now regulate domestic and stored
value money transmission activities (effective January 1, 2011),” and began arranging for the
11Page 12 mandatory pre-filing meeting to take place between Plaintiff and DFI. The DFI ultimately
scheduled the meeting for June 14, 2011, roughly two weeks before the Compliance Deadline.
40. Prior to the meeting, Plaintiff attempted to open a dialog between the DFI, members
of the California General Assembly, and Plaintiff regarding the extreme magnitude of the MTA’s
prerequisite filing requirements. Defendant Venchiarutti unilaterally quashed these efforts by
terminating a planned conference call, stating that the DFI had a practice of not communicating
with legislators via conference call.
41. On June 14, 2011, Plaintiff’s Chief Executive Officer, Mr. Aaron Greenspan, and
Mr. Christian Kalva (a/k/a Jerry Klein), a full-time contractor for Plaintiff, attended a mandatory
pre-interview meeting at the San Francisco offices of the DFI. Present at the interview from the
DFI were Defendant Venchiarutti and two DFI staff members: Mr. Julio Prada, and Mr. Omar
Shahin.
42. At considerable expense, Plaintiff provided the DFI with a copy of the company’s
audited 2010 financial statements ahead of the interview, per the DFI’s written requirements. In
person, Defendant Venchiarutti incorrectly denied that the DFI required audited financial
statements, but claimed to have reviewed them nonetheless. Unbeknownst to Plaintiff and the
DFI, these statements contained a serious error caused by the auditor that made Plaintiff appear
to have $145,000 less in tangible shareholder equity than it did in actuality on December 31,
2010. The auditor later issued re-stated financial statements for Plaintiff.
43. To the surprise of Plaintiff, the tenor of the interview was extremely hostile. After
Mr. Prada and Mr. Shahin briefly introduced themselves, Defendant Venchiarutti dominated the
conversation in a bullying, patronizing, unprofessional and condescending manner, generally not
conductive to the advancement of the license application process. Defendant Venchiarutti
frequently cut off Mr. Greenspan’s attempts to speak. Several specific statements made by
12Page 13 Defendant Venchiarutti in this pointed fashion altered Plaintiff’s impression of the DFI’s actual
policies toward licensure under the MTA:
a) Defendant Venchiarutti began by insisting that Plaintiff would need to raise at
least “$20 million” of capital, not $500,000 as stated in the MTA, with
venture capital being the implied source of funding, based on his “personal
experience,” which was that all money transmitters required at least “three
years” to achieve profitability.
b) In response to Plaintiff’s shock at the false assumptions embodied by
Defendant Venchiarutti’s opening statement, Defendant Venchiarutti asked
whether Plaintiff believed the meeting to be “a classroom exercise,” in a clear
reference to Mr. Greenspan’s and Mr. Klein’s relatively younger age.
c) As the meeting continued, Defendant Venchiarutti implied various figures as
the actual minimum amount of capital necessary to successfully apply for a
license, including “$1 million,” “$2 million,” and at one point, “$80 million.”
d) When Mr. Greenspan questioned Defendant Venchiarutti’s basis for such
figures and asked general questions about the MTA appropriate given the
purpose of the meeting, Defendant Venchiarutti falsely accused him of
expressing intent to violate the MTA, and exclaimed that he should, “choose
[his] words carefully in this room.” He proceeded to threaten to have Mr.
Greenspan incarcerated.
e) Defendant Venchiarutti stated “I don’t care if you have the greatest product in
the world!...” implying that Plaintiff would not be granted a license under any
circumstances. He also stated that he did not believe that Plaintiff could raise
the necessary capital to apply for a license, and that even if it did, the DFI
13Page 14 would “need” to conduct a thorough background check on all investors to
make sure that they were actually legitimate sources of funding.
f) Defendant Venchiarutti further suggested that Plantiff’s technology had to be
deficient since Plaintiff had not raised outside capital, an insulting statement
based on profoundly incorrect assumptions about technology and venture
capital investing in general and Plaintiff in particular.
g) Defendant Venchiarutti falsely suggested that Plaintiff was “already
insolvent” and that Plaintiff was unable to control its rate of spending.
Though both statements were demonstrably untrue, by this point Mr.
Greenspan decided not to volunteer any further information of any kind to
Defendant Venchiarutti.
h) Defendant Venchiarutti stated that for years (necessarily meaning prior to the
passage of the MTA), the DFI had an unwritten policy of not approving
applications filed by money transmission entities with tangible net worth less
than one million dollars.
i) In response to Mr. Greenspan’s repeated direct question as to whether or not
the DFI had received any formal complaints regarding FaceCash, Defendant
Venchiarutti falsely asserted that the DFI had received complaints from
“someone—I think it was your competitors complaining about you.”
Defendant Venchiarutti later admitted that the DFI had not actually received
any complaints about FaceCash to the best of his knowledge.
j) At the conclusion of the meeting, Defendant Venchiarutti refused to provide a
business card to Mr. Greenspan when asked, and stated that Plaintiff was still
welcome to apply for a license, if that was what Plaintiff really wanted to do.
14Page 15 The implication that Plaintiff’s application would be denied was
unmistakable.
44. Since the end of 2010, but prior to the June 14 interview, Think had raised
approximately $500,000 in additional funding from family members of Mr. Greenspan, placing
Plaintiff’s tangible shareholder equity well above the written statutory minimum of $500,000
established by the MTA. Updated financial statements reflecting the infusion of funding were
not yet available from Plaintiff’s auditors at the time of the June 14 interview, and given the
threat concerning extensive background checks on investors, Mr. Greenspan felt uncomfortable
disclosing such information to Defendant Venchiarutti for fear that it might somehow be used
against Plaintiff or Mr. Greenspan’s family.
45. Mr. Greenspan followed up with Defendant Venchiarutti via e-mail after the
meeting, and continued to have difficulty establishing the true minimum net worth required by
the DFI in order to apply for a license under the MTA.
46. Given that state MTL applications generally require the applicant to indicate if a
license has ever been rejected for any reason, on June 30, 2011 Mr. Greenspan decided that
Plaintiff could not run the likely risk of nationwide rejection, and opted to shut down FaceCash
in California and nationwide.
47. Mr. Greenspan enlisted the informal assistance of Ms. Eileen Newhall, Staff Director
of the California Senate Banking and Financial Institutions Committee, to try to ascertain the
DFI’s unwritten requirements. Despite repeated attempts to communicate with Defendant
Venchiarutti, Ms. Newhall was unsuccessful at achieving this goal.
48. Mr. Greenspan further requested formal assistance from Assemblyman Richard
Gordon, representing the 21st District, including Palo Alto, where Plaintiff is located and where
Mr. Greenspan resides. Assemblyman Gordon’s District Director, Mr. Jeremy Dennis, at first
15Page 16 attempted to establish a constructive dialog with Defendant Venchiarutti, and then with
Defendant Venchiarutti’s supervisor, Defendant Haraf. Mr. Dennis reported back to Mr.
Greenspan that Defendant Haraf had forwarded a voicemail left by Mr. Dennis intended only for
Defendant Haraf back to Defendant Venchiarutti, and that Defendant Venchiarutti had followed
up by leaving a threatening voicemail for Mr. Dennis instructing him never to call his boss again.
Mr. Dennis called this episode the worst communications breakdown he had seen in his career in
government, but eventually grew so frustrated at the lack of progress that he delivered an
ultimatum: that either Plaintiff could apply for a license without knowing the prerequisite
requirements, or proceed of its own accord without the assistance of the Assemblyman. When
Mr. Greenspan refused to do so on behalf of Plaintiff, citing the non-refundable $5,000
application fee and inter-linked nature of MTL license application processes, Mr. Dennis
unilaterally withdrew Assemblyman Gordon’s office from providing any further assistance to
Plaintiff.
49. Before withdrawing, Mr. Dennis put Mr. Greenspan in touch with DFI Senior
Counsel Tony Lehtonen. In his first e-mail communication with Plaintiff, Mr. Lehtonen wrote,
“My experience is that required levels are established only after a transmitter applicant’s
application.” Mr. Greenspan and Mr. Lehtonen subsequently exchanged several e-mails and
spoke on the phone several times. On September 12, 2011, Mr. Greenspan sent Mr. Lehtonen
several documents, including documents that had already been submitted to the DFI, and
Plaintiff’s re-stated audited financial statements. Mr. Greenspan also informed Mr. Lehtonen
that Plaintiff had received additional investment since the date of the audited financial statements
which resulted in Plaintiff’s net worth being well above the statutory threshold. Though Mr.
Lehtonen was unable to provide answers to any questions posed by Plaintiff during these calls, at
various points he did state the following:
16Page 17 a) He believed Mr. Greenspan’s concerns and tone to be reasonable and not as
extreme as what he had been led to believe by others at the DFI;
b) He had been told that money transmitters generally needed three years to
become profitable;
c) He could not remember the last time that the DFI had licensed a money
transmitter with only the $500,000 statutory minimum in tangible net worth;
d) He had not previously been aware of the documents submitted to the DFI by
Plaintiff;
e) It was possible that the DFI’s regulations had not kept pace with technological
developments;
f) The DFI would probably not actively investigate any unlicensed money
transmitters;
g) The DFI legal department was surprised by and confused by the need for the
domestic money transmission regulations embodied by the MTA, which many
DFI attorneys considered a waste of time and resources.
50. On October 17, 2011, when Mr. Greenspan called to inquire again as to the DFI’s
actual prerequisites for filing a license application under the MTA, Mr. Lehtonen told Mr.
Greenspan that he had been instructed that he was no longer allowed to speak any further with
him and immediately hung up.
51. As of the date of this filing, all efforts to clarify the basis for the MTA’s
requirements, as well as the actual requirements themselves, through telephone calls, e-mails,
and written letters to the DFI, Defendant Stevens of the BTH Agency, the Governor’s office,
members of both houses of the California legislature, and members of both houses of Congress,
have been unsuccessful.
17Page 18 C. DFI’s Arbitary Enforcement of the MTA and the Effects Thereof on Plaintiff
52. The MTA exempts certain classes of entities from the law’s requirements, but the list
of exemptions is not exhaustive, causing some institutions to violate the statute on a daily basis
(at least since July 1, 2011).
53. Private universities, for example, are not exempt from the MTA, but frequently issue
stored value instruments to students under names such as “Crimson Cash” (offered by Harvard
University), “Cardinal Dollars” (offered by Stanford University) and “TechCASH” (offered by
MIT) that can be used either on campus or to transmit money to area merchants via routine
purchases. Such money transmission systems are designed to temporarily eliminate the need for
debit and credit cards, protecting students from predatory lending practices frequently targeted at
youth with limited or non-existent credit history. These programs are extremely common
nationwide at institutions that enroll California residents, yet not a single institution of higher
education is registered in California as a money transmitter with the DFI, making university
presidents and trustees criminally liable.
54. Other types of entities regularly violate state money transmission statutes, including
the MTA. These institutions include:
a) Payroll processors, which draft funds on behalf of clients in advance of tax
and benefit deadlines;
b) Real estate agents, which handle funds for buyers and sellers of homes;
c) Law firms, which regularly collect funds from clients to forward to courts,
government agencies and adverse parties;
d) Construction companies, which use client funds to pay for materials and
equipment; and
e) Technology companies, which facilitate electronic payments.
18Page 19 55. News of the FaceCash shut down was widely publicized and regarded as an
important event in the technology industry, and the payments industry in particular. Plaintiff
immediately lost the actual and potential revenue streams from its established FaceCash
merchants, the ability to sign up California consumers for the service, and the standing to
realistically enter into partnership negotiations with device manufacturers and other key partners.
At least one prospective merchant cancelled his agreement to use Think software for purposes
aside from FaceCash directly due to the regulatory uncertainty surrounding the MTA. The news
clearly damaged Think’s reputation, and many individuals who learned of the events blamed
Think and its management for the interruption in service.
56. Due to the shut down, Plaintiff refunded over $40,000 to depositors, incurring
higher-than-average bank transfer fees as a result.
57. Directly due to the regulatory uncertainty surrounding the MTA and other MTLs,
Plaintiff was subsequently rejected as an investment opportunity by several prominent venture
capital firms, eliminating virtually the only source of funding large enough to realistically allow
Plaintiff to comply with the MTA.
58. Due to the effects of the MTA, one of Plaintiff’s key full-time software developers
resigned in late June, 2011, leaving the company without the individual who had designed
crucial parts of the FaceCash system software.
59. Due to the DFI’s interpretation of the MTA’s scope as being nationwide, Plaintiff
was unable to grow FaceCash to a national scale, leading to a loss of prospective revenues and
presenting a window of opportunity for Plaintiff’s competitors. Some of Plaintiff’s competitors
took advantage of this opportunity to conduct money transmission illegally without fear of being
noticed, putting Plaintiff at an even further disadvantage.
19Page 20 60. Due to Plaintiff’s forced inability to operate the FaceCash system without risking
criminal prosecution, FaceCash merchants were forced to once again pay higher per-transaction
fees to their original payment service providers.
61. With some prospective applicants such as Plaintiff, the DFI used criminal
prosecution as a threat not only when appropriate, but whenever questions of any kind regarding
its actions were raised. Yet with other prospective applicants, the DFI turned a blind eye, even
when entities were actively engaged in money transmission on a massive scale that would be
evident from reading any newspaper.
62. On October 13, 2011, three and a half months after FaceCash shut down, the DFI
relented and issued an order signed by Deputy Commissioner Robert Venchiarutti “exempting”
Plaintiff from the portion of the MTA that purported to regulate California companies activities
in states outside of California. The order did not however exempt Plaintiff from any of the
MTA’s requirements within California. Therefore, FaceCash remained shut down.
CLAIMS FOR RELIEF
FIRST CLAIM
Failure to Allow Review of Proposed California Regulations (1 CCR § 44)
63. Plaintiff repeats and realleges each of the foregoing allegations in this Complaint.
64. Defendants, acting under color of state law, policy and practice, have enacted
regulations that are vague, overbroad, arbitrary and obfuscatory with regard to the prerequisite
requirements necessary to obtain a license for money transmission in the State of California.
Defendants have conditioned the ability to obtain such a license on the subjective emotional
reaction of the examiner, and not on the requirements of the statute that Defendants are obligated
to enforce. After repeated requests from Plaintiff and members of the California legislature,
Defendants continue to refuse to disclose the real requirements to apply for a license.
20Page 21 65. The only publicly available written record of Defendants’ actual prerequisite
policies, far exceeding those written in the statue, is a single unattributed quotation contained
within an article entitled “Think Computer Ends Mobile Payments in California” in American
Banker, stating, “A department spokeswoman says the actual amount needed is ‘more than $1
million.’” However, American Banker is a trade publication owned and operated by
SourceMedia, Inc. and not an official publication of the DFI.
66. Defendants have established said regulations without the opportunity for appropriate
public discourse through a hearing and comment period as required by 1 CCR § 44.
67. Defendants have repeatedly failed to provide a copy of said regulations in writing,
despite insisting that the regulations represent a longstanding unwritten policy of the DFI.
68. Because of Defendants’ actions, Plaintiff has suffered and continues to suffer
irreparable harm that cannot be fully obviated by an award of monetary damages.
69. Plaintiff is entitled to damages in an amount determined by the Court and the
reasonable costs of this lawsuit, including its reasonable attorneys’ fees.
SECOND CLAIM
Arbitrary Enforcement of the Law in Violation of Due Process Rights Under the California
Constitution
70. Plaintiff repeats and realleges each of the foregoing allegations in this Complaint.
71. Article I, Section 7(a) of the California Constitution provides that a person may not
be deprived of liberty or property without due process of the law.
72. Defendants’ unwillingness to provide crucial, unprivileged information necessary for
Plaintiff to exercise its right to file an application for licensure under the MTA with a reasonable
chance of approval constitutes a violation of Plaintiff’s due process rights under the California
Constitution.
21Page 22 73. Defendants’ numerous false, misleading, careless and baseless statements intended to
dissuade Plaintiff from exercising its right to file an application for licensure under the MTA
with a reasonable chance of approval constitute a further violation of Plaintiff’s due process
rights under the California Constitution.
74. At least as early as October 17, 2011, Defendants’ sudden institution of a policy
refusing to allow further communication with Plaintiff constitutes a further violation of
Plaintiff’s due process rights under the California Constitution.
75. Defendants, acting under color of law and consumer protection, have selectively
enforced its vague, overly broad, and often unwritten regulations in a manner so arbitrary and
capricious that they are comfortable citing unwritten policy based on only their own “personal
experience” as necessary to justify any given application’s approval or rejection, with no
opportunity for public comment.
76. Because of Defendants’ actions, Plaintiff has suffered and continues to suffer
irreparable harm that cannot be fully obviated by an award of monetary damages.
77. Plaintiff is entitled to damages in an amount determined by the Court and the
reasonable costs of this lawsuit, including its reasonable attorneys’ fees.
THIRD CLAIM
Taking of Plaintiff’s Property in Violation of Due Process Rights Under the California
Constitution
78. Plaintiff repeats and realleges each of the foregoing allegations in this Complaint.
79. Article I, Section 7(a) of the California Constitution provides that a person may not
be deprived of liberty or property without due process of the law.
22Page 23 80. Prior to the enactment of the MTA, Plaintiff’s use of its computer systems and other
assets to route money on behalf of others fully complied with all federal and state licensing
requirements.
81. Plaintiff relied on this existing state of legal and regulatory affairs in purchasing,
designing, and maintaining its operations.
82. Plaintiff has a vested property right and constitutionally-protected interest in
continuing to utilize its assets in this manner without the unduly onerous restrictions imposed by
the State through the MTA, plainly aimed at extinguishing such use without exposing the State
or previously-licensed entities to legal repercussions.
83. The MTA is facially unconstitutional as a violation of the California Constitution’s
guarantees of due process, and has deprived Plaintiff of income attributable to this existing,
lawful use of property.
FOURTH CLAIM
False Light
84. Plaintiff repeats and realleges each of the foregoing allegations in this Complaint.
85. Plaintiff brings this cause of action pursuant to California Government Code §§ 815,
815.2 and 820.
86. On September 19, 2011, Defendant Appelsmith, in his capacity as Senior Advisor to
the Governor, responded to a letter sent by Plaintiff to Defendant Brown. Defendant Appelsmith
made several false statements in his response.
87. Plaintiff posted a link to a scanned digital image of Defendant Appelsmith’s written
response on the FaceCash web site to keep interested parties informed of FaceCash’s ambiguous
legal status due to the effects of the MTA. Consequently, many thousands of individuals read
Defendant Appelsmith’s response.
23Page 24 88. Defendant Appelsmith issued another written response dated October 28, 2011 in
reply to Plaintiff’s e-mail communications regarding the DFI’s arbitrary and capricious
enforcement practices. This written response was also scanned and made accessible from the
FaceCash web site.
89. Both of Defendant Appelsmith’s written responses placed Plaintiff in a false light in
the public eye.
90. First Statement Made by Defendant Appelsmith that Placed Plaintiff in a False
Light in the Public Eye
a) In his September 19, 2011 response, Defendant Appelsmith wrote, “I
understand you have been afforded another opportunity to meet with the
Department of Financial Institutions and the Department has assigned a
specific member of their staff to work with you directly.” The first part of this
statement is false and the second part of this statement is misleading.
b) Plaintiff, DFI and BTH personnel were scheduled to meet on September 14,
2011, until Mr. Greenspan inadvertently learned that that Defendant Stevens
expected Mr. Greenspan to appear in Sacramento on that day for a 9:00 A.M.
meeting, several hundred miles from Plaintiff’s headquarters, at Plaintiff’s
expense. Mr. Greenspan proposed a conference call at no expense to any of
the parties instead, to which Mr. Lehtonen at the DFI agreed. Defendant
Stevens instead cancelled the meeting and any potential conference call. After
the meeting was cancelled no additional opportunity to meet with BTH and/or
DFI was offered. The statement that “you have been afforded another
opportunity to meet with the Department of Financial Institutions” was and is
therefore false, and the implication that Plaintiff had ignored or was ignoring
24Page 25 an opportunity to resolve the situation, while continuing to write letters about
it, placed Plaintiff in a false negative light.
c) Though Mr. Lehtonen was available to discuss Plaintiff’s concerns with Mr.
Greenspan for a short period of time, the statement “the Department has
assigned a specific member of their staff to work with you directly”
necessarily implies an ongoing open line of communication with the specific
staff member. In fact, this open line of communication ceased when Mr.
Lehtonen hung up on Mr. Greenspan unprovoked and never spoke with him
again. Thus, the statement is misleading and creates a false implication that
Plaintiff’s concerns would actually be addressed by the DFI.
91. Second Statement Made by Defendant Appelsmith that Placed Plaintiff in a
False Light in the Public Eye
a) In his September 19, 2011 response, Defendant Appelsmith wrote, “Jointly,
everyone has been committed to making sure your company received fair and
equitable consideration under existing law.” This statement is false.
b) In the context of the letter, “everyone” refers to the DFI, the BTH Agency,
and the Governor’s office. Yet the hostile behavior of Defendant Venchiarutti
at the DFI, the indifferent written responses received from Defendant Stevens
at the BTH Agency, the indifferent verbal responses received from Mr. Adrian
Mata in the Governor’s office, and Defendant Appelsmith’s own written
response directly contradict the fanciful notion that anyone had any
commitment to making sure that Plaintiff received fair and equitable
consideration under the law.
25Page 26 c) Plaintiff filed thirty-three formal complaints with DFI regarding active
unlicensed money transmitters, indicating that Plaintiff was not in fact
receiving anywhere close to “fair and equitable” consideration.
d) Defendant Appelsmith’s statement created an impression that Plaintiff’s
grievances were unreasonable and unfounded, and that Plaintiff had done
something wrong to cause it to be necessary for FaceCash to shut down while
other unlicensed money transmitters continued operating, which portrayed
Plaintiff in a false negative light.
e) Defendant Appelsmith’s politically correct statement is so clearly contradicted
by voluminous evidence as to be offensive to any rational person.
92. Third Statement Made by Defendant Appelsmith that Placed Plaintiff in a False
Light in the Public Eye
a) In his September 19, 2011 response, Defendant Appelsmith wrote,
“Irrespective of the final outcome, all branches of government have applied
due diligence to this situation…everyone has worked within their purview to
provide FaceCash with appropriate guidance, and as important…every effort
has been made to encourage sound business practices in the state.” Each part
of this statement is false.
b) Despite Defendant Appelsmith’s letter, on September 19, 2011, Plaintiff still
could not file an application for a license under the MTA due to ambiguity
surrounding the tangible net worth prerequisite caused by the DFI, reflecting
the fact that at least some “appropriate guidance” was severely lacking.
c) The “guidance” provided by Defendant Venchiarutti was neither professional
nor “appropriate.”
26Page 27 d) Plaintiff filed thirty-three formal complaints with DFI regarding active
unlicensed money transmitters, indicating that Defendants were anything but
concerned with encouraging “sound business practices,” unless Defendants
actually believed that the MTA did not encourage sound business practices.
f) Defendant Appelsmith’s statement created an impression that Plaintiff’s
grievances were unreasonable and unfounded, and that Plaintiff had done
something wrong to cause it to be necessary for FaceCash to shut down while
other unlicensed money transmitters continued operating, which portrays
Plaintiff in a false negative light.
g) Defendant Appelsmith’s politically correct statement is so clearly contradicted
by voluminous evidence as to be offensive to any rational person.
93. Fourth Statement Made by Defendant Appelsmith that Placed Plaintiff in a
False Light in the Public Eye
a) Defendant Appelsmith’s October 28, 2011 response (which was oddly
postmarked six days later, only after Plaintiff had filed twenty-seven
additional formal complaints with the DFI) contained two sentences: “As I
indicated to you in my letter last month, I have reviewed this matter closely
and am satisfied that the State’s regulators have handled it appropriately.
Although you are not satisfied with the result, it is one that is compelled by
statutory directives that the State is obligated to follow.” The second sentence
of this two sentence letter is false.
b) Defendant Appelsmith does not specify which “statutory directives” in
particular he refers to, but whatever they may be, the statement remains false.
The DFI is in fact permitted by Financial Code § 1806 to exempt any entity
27Page 28 from the requirements of the MTA so long as the Commissioner finds it in the
“public interest.” Certainly no legitimate statute could obligate Defendant
Venchiarutti to ridicule and insult prospective license applicants.
c) Defendant Appelsmith’s statement created an impression that Plaintiff’s
grievances were unreasonable and unfounded, and that Plaintiff had done
something wrong to cause it to be necessary for FaceCash to shut down while
other unlicensed money transmitters continued operating, which portrays
Plaintiff in a false negative light.
94. The total effect of Defendant Appelsmith’s statements was to disparage Plaintiff in
the public eye given the widespread interest in the substance of the State’s answers to Plaintiff’s
concerns.
95. After Mr. Greenspan wrote an essay highlighting as one of its main points the DFI’s
inconsistent enforcement of the MTA, several individuals wrote responses clearly indicating that
his reputation and that of Plaintiff had been deeply harmed, simply for Plaintiff’s desiring
impartial enforcement of the law.
FIFTH CLAIM
Violation of Plaintiff’s Fourteenth Amendment Due Process Rights (42 U.S.C. § 1983)
96. Plaintiff repeats and realleges each of the foregoing allegations in this Complaint.
97. Defendants have established customs, policies, patterns, and practices of enforcing
the MTA under color of law, and have deprived Plaintiff of its due process rights in violation of
the Fourteenth Amendment to the United States Constitution.
98. The MTA and all MTLs, in that they effectively extinguish a legally valid, vested
right to use of property, is facially unconstitutional as a violation of Plaintiff’s rights to due
process under the Fourteenth Amendment to the United States Constitution.
28Page 29 99. The restriction of money transmission by states is unreasonable and onerous in that it
illegitimately and arbitrarily singles out small entities and new entities wishing to conduct
interstate commerce and wishing to provide a conduit for others to conduct interstate commerce,
constituting a violation of Plaintiff’s right to Equal Protection of the laws pursuant to the
Fourteenth Amendment to the United States Constitution.
100.All conditions precedent to the bringing of this action have occurred or have been
exhausted.
101.Plaintiff has incurred and will incur costs for attorneys and other necessary fees and
costs which are recoverable in this action under the provisions of 42 U.S.C. § 1988.
102.Pursuant to 42 U.S.C. §§ 1983 and 1988, Plaintiff is entitled to declaratory relief and
a preliminary and permanent injunction invalidating and restraining enforcement of the
California MTA and all MTLs.
SIXTH CLAIM
Violation of the Commerce Clause
103.Plaintiff repeats and realleges each of the foregoing allegations in this Complaint.
104.The MTA and all MTLs violate the Commerce Clause of the United States
Constitution by directly regulating interstate and foreign commerce and purporting to regulate
conduct that occurs in other States and Nations.
105.The MTA and all MTLs violate the Commerce Clause by regulating, on its face and
in its practical effect, the channels of interstate and foreign commerce and the use of these
channels of interstate and foreign commerce.
106.By design and in practical effect, the MTLs impermissibly regulate conduct
occurring outside of their respective states by making it a crime to offer money transmission
services to entities with no connection to or presence in the local market.
29Page 30 107.Defendants have suppressed constitutionally protected interstate trade and commerce
in order to protect the narrow interests of a select few special interests, who in some cases
sponsored MTL legislation due to their perceived benefits.
108.Defendants are purporting to act within the scope of their authority under state law in
enforcing and implementing the MTA.
109.Defendants are liable to Plaintiff for proper redress under 42 U.S.C. § 1983 because
the MTA deprives Plaintiff of the rights, privileges, and immunities secured by the Commerce
Clause of the United States Constitution.
110.Plaintiff has no adequate remedy at law.
SEVENTH CLAIM
Violation of the Commerce Clause
111.Plaintiff repeats and realleges each of the foregoing allegations in this Complaint.
112.MTLs violate the Commerce Clause by imposing excessive and unreasonable
burdens on interstate and foreign commerce that are disproportionately large relative to the
purported local benefits of the MTLs, which are in many cases negative. The MTLs impose
significant burdens on Plaintiff (and other prospective and active money transmitters) in
connection with their conduct of interstate commerce, as well as burdens on consumers and
merchants wishing to use money transmitters to conduct interstate commerce.
113.Among other burdens imposed by MTLs, executives and directors of applicants for
licensure must have their fingerprints taken again and again and again and again in order to
provide various state regulators with data to conduct criminal background checks. Additionally,
each MTL requires its own surety bond of an arbitrary fixed amount not commensurate with an
applicant’s deposits on hand. In aggregate, the financial requirements for all of the MTLs
combined are so high that most businesses simply cannot afford to enter the industry without
30Page 31 immense amounts of capital, even if a business only plans to hold a single dollar on behalf of a
third party.
114.MTLs are an inappropriate manner in which to regulate money transmission in the
modern age. Today and for the foreseeable future, nationwide internet access and ubiquitous
mobile device usage combine to make it difficult, and at times impossible, to determine the true
physical location of a consumer wishing to pay for goods or services, constituting an
unreasonable and unnecessary burden on money transmitters that serves no consumer protection
or other purpose.
115.The local benefits of the MTLs, namely, protection of local consumers, are
practically zero, or negative given the local costs. Only registered MTLs that can afford to meet
the high financial burden of applying are covered by surety bonds, leaving the businesses posing
the highest risk to consumers, meaning those that are unregistered, completely uninsured.
Therefore, even with MTLs in place, consumers are still at risk if they happen to pick the
“wrong” money transmitter. Simultaneously, those money transmitters that are available in the
marketplace are more likely to be one of a handful of companies that can afford to meet the
requirements of all MTLs nationwide, leading to higher prices for consumers. In practice, the
MTLs as they are currently structured give consumers a choice between being scammed by
unlicensed thieves, or gouged by conglomerates wielding monopoly power.
116.The enormous size of each corporate entity possessing nationwide MTL licenses
dwarfs the protective ability of each surety bond, which would yield mere pennies on the dollar
in the event of a default. The MTLs are therefore not justified by any valid public welfare,
consumer protection, or pro-competitive purpose unrelated to economic protectionism.
117.Defendants are purporting to act within the scope of their authority under state law in
enforcing and implementing the MTLs.
31Page 32 118.The notion that each state’s currency might be valued differently was anticipated and
explicitly discouraged by the country’s founding fathers. In Federalist Paper No. 44, James
Madison wrote (emphasis added):
In addition to these persuasive considerations, it may be observed, that the same reasons
which show the necessity of denying to the States the power of regulating coin, prove with
equal force that they ought not to be at liberty to substitute a paper medium in the place of
coin. Had every State a right to regulate the value of its coin, there might be as many
different currencies as States, and thus the intercourse among them would be impeded;
retrospective alterations in its value might be made, and thus the citizens of other States be
injured, and animosities be kindled among the States themselves. The subjects of foreign
powers might suffer from the same cause, and hence the Union be discredited and embroiled
by the indiscretion of a single member. No one of these mischiefs is less incident to a power
in the States to emit paper money, than to coin gold or silver. The power to make any thing
but gold and silver a tender in payment of debts, is withdrawn from the States, on the same
principle with that of issuing a paper currency.
The wide discrepancies between the various requirements for money transmission licenses in
each state are clearly tantamount to each state’s ability to regulate the value of its own coin.
119.The combined net effect of the MTA and all MTLs is one of the states regulating
interstate commerce. With all such laws exempting banks from regulation, and banks lacking
any competitive downward pressure on pricing for money transmission services, consumers and
merchants suffer the consequences. Banks have therefore enjoyed a near-monopoly on payment
services within the United States, while less-risky money transmission services, which do not
make loans, have only been able to qualify for all of the licenses necessary to operate nationwide
on the rarest of occasions.
120.Defendants are liable to Plaintiff for proper redress under 42 U.S.C. § 1983 because
the MTLs deprive Plaintiff of the rights, privileges, and immunities secured by the Commerce
Clause of the United States Constitution.
121.Plaintiff has no adequate remedy at law.
RELIEF REQUESTED
WHEREFORE, Plaintiff respectfully requests the following relief:
32Page 33 A. A declaratory judgment stating that the MTLs, including the 2010 California Money
Transmission Act, violate the United States Constitution and are unenforceable;
B. A preliminary and permanent injunction enjoining the Defendants from implementing or
enforcing the MTLs, including the 2010 California Money Transmission Act;
C. Monetary damages in the amount of $25,000,000.00 for infringing upon Plaintiff’s exercise
of its ability to conduct interstate commerce, and for effecting the loss of Plaintiff’s entire
business, and for causing irreparable harm to Plaintiff’s brand, reputation and future
prospects;
D. General damages according to proof;
E. Special damages according to proof;
F. Punitive damages against Defendant Venchiarutti;
G. Plaintiff’s reasonable costs and expenses of this action, including attorneys’ fees, in
accordance with 42 U.S.C. § 1988 and other applicable law;
H. Such other and further relief as the Court deems just and proper.
DEMAND FOR JURY TRIAL
Pursuant to Federal Rule of Civil Procedure 38(b), Plaintiff demand a trial by jury in this
action of all issues so triable.
th
Respectfully submitted this 14 day of November, 2011.
Aaron Greenspan
Think Computer Corporation
3260 Hillview Avenue
Palo Alto, CA 94304-1226
Phone: +1 415 670 9350
Fax: +1 415 373 3959
E-Mail: legal@thinkcomputer.com
33Page 34 SCHEDULE A
Complaints Filed with the California DFI Regarding Unlicensed Money Transmitters
October 19, 2011
1.
2.
3.
4.
Academy of Art University
Pomona College
Stanford University
University of Southern California
October 26, 2011
5. Airbnb, Inc.
6. Facebook, Inc.
November 2, 2011
7. CheckPoint HR
8. Cimbal, Inc.
9. CompuPay, Inc.
10. Corduro, Inc.
11. Corporate Payroll Services
12. Dwolla, Inc.
13. Fidelity HR Services
14. GTM Payroll Services, Inc.
15. Interlogic Outsourcing, Inc.
16. Loyola Marymount University
17. Mobibucks
18. Netchex
19. Occidental College
20. Padgett Payroll Services
21. Paychex, Inc.
22. Paycom Payroll
23. PayCycle, Inc.
24. Paylocity Corporation
25. Paypro Corporation
26. Payroll People, Inc.
27. Santa Clara University
28. Sprint Nextel Corporation
29. TimePlus Payroll Services
30. University of San Diego
31. Verizon Communications, Inc.
32. Zaarly, Inc.
November 7, 2011
33. Clover Network, Inc.
34Page 35 SCHEDULE B
Money Transmission Laws (MTLs) and Related Contacts
Alabama Administrative Code, Chapter 830-X-7: Sale of Checks Act
JOSEPH P. BORG
Director, Alabama Securities Commission
State of Alabama
401 Adams Ave
Suite 280
Montgomery, AL 36104
ROBERT BENTLEY
Governor
State of Alabama
600 Dexter Avenue
Montgomery, AL 36130
LUTHER STRANGE
Attorney General
State of Alabama
501 Washington Avenue
Montgomery, AL 36104
Alaska Statutes, Chapter 06.55: Alaska Uniform Money Services Act
LORIE L. HOVANEC
Division Director, Department of Commerce, Community, and Economic Development,
Division of Banking and Securities
State of Alaska
550 West Seventh Avenue
Suite 1940
Anchorage, AK 99501
SEAN PARNELL
Governor
State of Alaska
Alaska State Capitol Building
Third Floor
Juneau, AK 99801
JOHN BURNS
Attorney General
State of Alaska
th
1031 W. 4 Avenue
Suite 200
Anchorage, AK 99501-1994
35Page 36 Arizona Revised Statues, Chapter 12, Article 1, 6-1201 to 6-1218: Transmitters of Money
LAUREN W. KINGRY
Director, Department of Financial Institutions
State of Arizona
2910 N. 44th Street
Suite 310
Phoenix, AZ 85018
JAN BREWER
Governor
State of Arizona
Executive Tower
1700 West Washington Street
Phoenix, AZ 85007
TOM HOME
Attorney General
State of Arizona
1275 West Washington Street
Phoenix, AZ 85007-2926
Arkansas Uniform Money Services Act
A. HEATH ABSHURE
Commissioner, Arkansas Securities Department
State of Arkansas
Heritage West Building, Suite 300
201 East Markham Street
Little Rock, AR 72201-1692
MIKE BEEBE
Governor
State of Arkansas
State Capitol Room 250
Little Rock, AR 72201
DUSTIN MCDANIEL
Attorney General
State of Arkansas
323 Center Street
Suite 200
Little Rock, AR 72201
California Financial Code, Chapter 14, Section 1800 – 1872: Money Transmission Act
TRACI STEVENS
Acting Secretary, Business, Transportation and Housing Agency
36Page 37 State of California
980 9th Street
Suite 2450
Sacramento, CA 95814-2719
WILLIAM HARAF
Commissioner, Department of Financial Institutions
State of California
45 Fremont Street
Suite 1700
San Francisco, CA 94105-2219
ROBERT VENCHIARUTTI
Deputy Commissioner, Department of Financial Institutions
State of California
45 Fremont Street
Suite 1700
San Francisco, CA 94105-2219
EDMUND G. BROWN, JR.
Governor
State of California
State Capitol
Suite 1173
Sacramento, CA 95814
JACOB A. APPELSMITH
Senior Advisor to the Governor
State of California
3927 Lennane Drive
Suite 100
Sacramento, CA 95834
KAMALA HARRIS
Attorney General
State of California
1300 "I" Street
Sacramento, CA 95814-2919
Colorado Title 12, Article 52: Money Transmitters Act
FRED J. JOSEPH
Banking and Securities Commissioner, Department of Regulatory Agencies Division of Banking
State of Colorado
1560 Broadway
Suite 900
Denver, CO 80202
37Page 38 JOHN HICKENLOOPER
Governor
State of Colorado
136 State Capitol
Denver, CO 80203-1792
JOHN SUTHERS
Attorney General
State of Colorado
1525 Sherman Street
Denver, CO 80203
Connecticut Laws, Chapter 668, Part V: Money Transmission Act
HOWARD F. PITKIN
Commissioner, Department of Banking
State of Connecticut
260 Constitution Plaza
Hartford, CT 06103-1800
DANNEL MALLOY
Governor
State of Connecticut
State Capitol
210 Capitol Avenue
Hartford, CT 06106
GEORGE JEPSEN
Attorney General
State of Connecticut
55 Elm Street
Hartford, CT 06106
Delaware Code, Title 5, Chapter 23: The Sale of Checks Act
ROBERT A. GLEN
State Bank Commissioner, Office of the State Bank Commissioner
State of Delaware
555 East Loockerman Street
Suite 210
Dover, DE 19901
JACK MARKELL
Governor
State of Delaware
Tatnall Building
William Penn Street, 2nd Floor
Dover, DE 19901
38Page 39 BEAU BIDEN
Attorney General
State of Delaware
102 W. Water Street
Dover, DE 19904
Florida Administrative Code, Chapter 69V-560: Money Transmitters
TERRY STRAUB
Director, Division of Finance, Office of Financial Regulation
State of Florida
200 E. Gaines Street
Tallahassee, FL 32399-0376
RICK SCOTT
Governor
State of Florida
The Capitol
400 S. Monroe Street
Tallahassee, FL 32399-0001
PAM BONDI
Attorney General
State of Florida
The Capitol PL-01
Tallahassee, FL 32399-1050
Georgia Code, Title 7, Chapter 1, Article 4: Sale of Checks or Money Orders
ROB BRASWELL
Commissioner, Department of Banking and Finance
State of Georgia
2990 Brandywine Road
Suite 200
Atlanta, GA 30341-5565
NATHAN DEAL
Governor
State of Georgia
203 State Capitol
Atlanta, GA 30334
SAM OLENS
Attorney General
State of Georgia
40 Capitol Square, SW
Atlanta, GA 30334
39Page 40 Hawaii Revised Statutes, Chapter 489D: Money Transmitters Act
IRIS IKEDA CATALANI
Commissioner, Department of Commerce & Consumer Affairs, Division of Financial Institutions
State of Hawaii
King Kalakaua Building
335 Merchant Street, Room 221
Honolulu, HI 96813
NEIL ABERCROMBIE
Govenor
State of Hawaii
Executive Chambers
State Capitol
Honolulu, HI 96813
DAVID M. LOUIE
Attorney General
State of Hawaii
425 Queen Street
Honolulu, HI 96813
Idaho Statutes, Chapter 26, Title 29: Idaho Money Transmitters Act
GAVIN M. GEE
Director, Idaho Department of Finance
State of Idaho
800 Park Boulevard
Suite 200
Boise, ID 83712
BUTCH OTTER
Governor
State of Idaho
700 W. Jefferson Street
Boise, ID 83702
LAWRENCE WASDEN
Attorney General
State of Idaho
700 W. Jefferson Street
Suite 210
Boise, ID 83702
Illinois Compiled Statutes, 205 ILCS 657/1: The Transmitters of Money Act
ROBERT E. MEZA
40Page 41 Division Director, Department of Financial & Professional Regulation, Division of Financial
Institutions
State of Illinois
320 West Washington Street
Springfield, IL 62786
PAT QUINN
Governor
State of Illinois
207 State House
Springfield, IL 62706
LISA MADIGAN
Attorney General
State of Illinois
500 South Second Street
Springfield, IL 62706
Indiana Code, Title 28, Chapter 4: Money Transmitters
RICHARD J. RICE
Chairman, Department of Financial Institutions
State of Indiana
30 South Meridian Street
Suite 300
Indianapolis, IN 46204
MITCH DANIELS
Governor
State of Indiana
Statehouse
Indianapolis, IN 46204-2797
GREG ZOELLER
Attorney General
State of Indiana
302 W. Washington Street
5th Floor
Indianapolis, IN 46204
Iowa Uniform Money Services Act
JAMES M. SCHIPPER
Superintendent, Division of Banking
State of Iowa
200 East Grand Avenue
Suite 300
Des Moines, IA 50309
41Page 42 TERRY BRANSTAD
Governor
State of Iowa
1007 East Grand Avenue
Des Moines, IA 50319
THOMAS JOHN MILLER
Attorney General
State of Iowa
1305 E. Walnut Street
Des Moines, IA 50319
Kansas Banking Law, Chapter 9, Article 5: Miscellaneous Provisions
ED SPLICHAL
Office of the State Bank Commissioner
State of Kansas
700 Jackson
Suite 300
Topeka, KS 66603
SAM BROWNBACK
Governor
State of Kansas
300 SW 10th Street
Topeka, KS 66612
DEREK SCHMIDT
Attorney General
State of Kansas
Memorial Hall, 2nd Floor
120 SW 10th Street
Topeka, KS 66612
Kentucky Revised Statutes, Chapter 286.11: Kentucky Money Transmitters Act of 2006
CHARLES A. VICE
Commissioner, Department of Financial Institutions
State of Kentucky
1025 Capital Center Drive
Suite 200
Frankfort, KY 40601
STEVE BESHEAR
Governor
State of Kentucky
700 Capitol Avenue
42Page 43 Suite 100
Frankfort, KY 40601
JACK CONWAY
Attorney General
State of Kentucky
700 Capitol Avenue
Suite 118
Frankfort, KY 40601-3449
Louisiana Statutes, Title 6, Chapter 13: The Sale of Checks and Money Transmission Act
JOHN DUCREST
Commissioner, Office of Financial Institutions
State of Lousiana
8660 United Plaza Boulevard
Second Floor
Baton Rouge, LA 70809-7024
BOBBY JINDAL
Governor
State of Louisiana
900 North 3rd Street
Baton Rouge, LA 70802
BUDDY CALDWELL
Attorney General
State of Louisiana
1885 North 3rd Street
6th Floor
Baton Rouge, LA 70802
Maine Laws, Title 32, Chapter 80, Subchapter 1: Money Transmitters Act
WILLIAM N. LUND
Superintendent, Department of Professional & Financial Regulation, Bureau of Consumer Credit
Protection
State of Maine
35 State House Station
Augusta, ME 04333
PAUL LEPAGE
Governor
State of Maine
1 State House Station
Augusta, ME 04333-0001
43Page 44 WILLIAM SCHNEIDER
Attorney General
State of Maine
6 State House Station
Augusta, ME 04333
Maryland Money Transmitters Act
MARK KAUFMAN
Commissioner, Division of Financial Regulation
State of Maryland
500 North Calvert Street
Suite 402
Baltimore, MD 21202
MARTIN O’MALLEY
Governor
State of Maryland
100 State Circle
Annapolis, MD 21401
DOUG GANSLER
Attorney General
State of Maryland
200 St. Paul Place
Baltimore, MD 21202
Michigan Compiled Laws, Section 487: Money Transmission Services Act
KEVIN CLINTON
Department of Licensing and Regulatory Affairs, Office of Finance and Insurance Regulation
State of Michigan
611 W Ottawa St
rd
3 Floor
Lansing, MI 48933-1070
RICK SNYDER
Governor
State of Michigan
George W. Romney Building
111 South Capitol Avenue
Lansing, MI 48909
BILL SCHUETTE
Attorney General
State of Michigan
G. Mennen Williams Building
7th Floor
525 W. Ottawa Street
44Page 45 Lansing, MI 48909
Minnesota Money Transmitters Act
MICHAEL ROTHMAN
Department of Commerce
State of Minnesota
85 7th Place East
Suite 500
St. Paul, MN 55101
MARK DAYTON
Govenor
State of Minnesota
130 State Capitol
75 Rev. Dr. Martin Luther King Jr. Boulevard
St. Paul, MN 55155
LORI SWANSON
Attorney General
State of Minnesota
1400 Bremer Tower
445 Minnesota Street
St. Paul, MN 55101
Mississippi Sale of Checks Act
THERESA BRASDY
Commissioner, Department of Banking and Consumer Finance
State of Mississippi
Woolfolk State Office Building
501 N. West Street
9th Floor, Suite A
Jackson, MS 39201
HALEY BARBOUR
Governor
State of Mississippi
400 High Street
Jackson, MS 39201
JIM HOOD
Attorney General
State of Mississippi
Walter Sillers Building
550 High Street
Suite 1200
Jackson, MS 39201
45Page 46 Missouri Sale of Checks Law
RICHARD J. WEAVER
Commissioner of Finance, Division of Finance
State of Missouri
Truman State Office Building
Room 630
Jefferson City, MO 65102
JAY NIXON
Governor
State of Missouri
201 W. Capitol Avenue
Suite 216
Jefferson City, MO 65101-1590
CHRIS KOSTER
Attorney General
State of Missouri
Supreme Court Building
207 W. High Street
Jefferson City, MO 65102
Nebraska Revised Statutes, Chapter 8, Article 10: Sale of Checks and Funds Transmission Act
JOHN MUNN
Director, Department of Banking and Finance
State of Nebraska
Commerce Court
1230 'O' Street, Suite 400
Lincoln, NE 68508-1402
DAVE HEINEMAN
Governor
State of Nebraska
1445 K Street
Suite 2316
Lincoln, NE 68508
JON BRUNING
Attorney General
State of Nebraska
2115 State Capitol
Lincoln, NE 68509
Nevada Revised Statutes, Chapter 671: Issuers Of Instruments For Transmission Or Payment Of
Money
46Page 47 TERRY JOHNSON
Director, Department of Business and Industry, Division of Financial Institutions
State of Nevada
2785 E. Desert Inn Road
Las Vegas, NV 89121
BRIAN SANDOVAL
Governor
State of Nevada
State Capitol Building
101 N. Carson Street
Carson City, NV 89701
CATHERINE CORTEZ MASTO
Attorney General
State of Nevada
100 North Carson Street
Carson City, NV 89701-4717
New Hampshire Revised Statutes, Chapter 399-G: Licensing of Money Transmitters
RONALD A. WILBUR
Commissioner, Banking Department
State of New Hampshire
53 Regional Drive
Suite 200
Concord, NH 03301
JOHN LYNCH
Governor
State of New Hampshire
State House
107 North Main Street
Concord, NH 03301
MICHAEL DELANEY
Attorney General
State of New Hampshire
33 Capitol Street
Concord, NH 03301
New Jersey Statutes, Title 17, Chapter 15C: New Jersey Money Transmitters Act
THOMAS B. CONSIDINE
Department of Banking and Insurance
State of New Jersey
20 West State Street
PO Box 325
47Page 48 Trenton, NJ 08625
CHRIS CHRISTIE
Governor
State of New Jersey
125 West State Street
Trenton, NJ 08625
PAULA DOW
Attorney General
State of New Jersey
Richard J. Hughes Justice Complex
25 Market Street
Trenton, NJ 08625
New York Banking Law, Article 13-B, Sections 640 - 652-B: Transmitters of Money
BENJAMIN M. LAWSKY
Department of Financial Services
State of New York
One State Street
New York, NY 10004-1511
ANDREW CUOMO
Governor
State of New York
State Capitol Building
Albany, NY 12224
ERIC SCHNEIDERMAN
Attorney General
State of New York
State Capitol Building
nd
2 Floor
Albany, NY 12224
North Carolina
JOSEPH A. SMITH, JR.
Commissioner of Banks
State of North Carolina
316 W. Edenton Street
Raleigh, NC 27603
BEVERLY PURDUE
Governor
State of North Carolina
20301 Mail Service Center
48Page 49 Raleigh, NC 27699-0301
ROY A. COOPER
Attorney General
State of North Carolina
9001 Mail Service Center
Raleigh, NC 27699-9001
North Dakota Money Transmitters Law
ROBERT J. ENTRINGER
Department of Financial Institutions
State of North Dakota
2000 Schafer Street
Suite G
Bismarck, ND 58501-1204
JACK DALRYMPLE
Governor
State of North Dakota
600 East Boulevard Avenue
Bismarck, ND 58505-0100
WAYNE STENEHJEM
Attorney General
State of North Dakota
600 E. Boulevard Avenue
Dept. 125
Bismarck, ND 58505
Ohio Revised Code, Chapter 1315: Transmitters Of Money; Check-Cashing Businesses
CHARLES J. DOLEZAL
Superintendent, Division of Financial Institutions
State of Ohio
77 South High Street, 21st Floor
Columbus, OH 43215-6120
JOHN KASICH
Governor
State of Ohio
Riffe Center
30th Floor
77 South High Street
Columbus, OH 43215-6117
MIKE DEWINE
Attorney General
49Page 50 State of Ohio
30 E. Broad Street
14th Floor
Columbus, OH 43215
Oklahoma Financial Transaction Reporting Act
MICK THOMPSON
Commissioner, Banking Department
State of Oklahoma
2900 North Lincoln Boulevard
Oklahoma City, OK 73105
MARY FALLIN
Governor
State of Oklahoma
State Capitol
2300 N. Lincoln Boulevard
Room 212
Oklahoma City, OK 73105
SCOTT PRUITT
Attorney General
State of Oklahoma
313 NE 21st Street
Oklahoma City, OK 73105
Oregon Money Transmitter Act
DAIVD C. TATMAN
Administrator, Department of Consumer & Business Services, Division of Finance and
Corporate Securities
State of Oregon
350 Winter St. NE
Room 410
Salem, OR 97301-3881
JOHN KITZHABER
Governor
State of Oregon
160 State Capitol
900 Court Street
Salem, Oregon 97301-4047
JOHN KROGER
Attorney General
State of Oregon
Oregon Department of Justice
50Page 51 1162 Court Street NE
Salem, OR 97301-4096
Pennsylvania Transmitting Money Act
GLENN E. MOYER
Secretary of Banking, Department of Banking
State of Pennsylvania
17 N Second Street
Suite 1300
Harrisburg, PA 17101-2290
TOM CORBETT
Governor
State of Pennsylvania
225 Main Capitol Building
Harrisburg, PA 17120
WILLIAM H. RYAN, JR.
Attorney General
State of Pennsylvania
Strawberry Square
16th Floor
Harrisburg, PA 17120
Rhode Island
PAUL MCGREEVY
Department of Business Regulation, Division of Banking & Securities Regulation
State of Rhode Island
1511 Pontiac Avenue
Cranston, RI 02920
LINCOLN D. CHAFEE
Governor
State of Rhode Island
222 State House
Providence, RI 02903
PETER KILMARTIN
Attorney General
State of Rhode Island
150 South Main Street
Providence, RI 02903
South Dakota Money Transmitter Act
51Page 52 BRET AFDAHL
Director, Department of Labor and Regulation, Division of Banking
State of South Dakota
27 ½ West Missouri Avenue
Pierre, SD 57501
DENNIS DAUGAARD
Governor
State of South Dakota
500 E Capitol Avenue
Pierre, SD 57501
MARTY JACKLEY
Attorney General
State of South Dakota
1302 E. Highway 14
Suite 1
Pierre, SD 57501-8501
Tennessee Money Transmission Law
GREG GONZALES
Commissioner, Department of Financial Institutions
State of Tennessee
414 Union Street
Suite 1000
Nashville, TN 37219
BILL HASLAM
Governor
State of Tennessee
State Capitol
st
1 Floor
Nashville, TN 37243
ROBERT E. COOPER, JR.
Attorney General
State of Tennessee
425 5th Avenue N.
Suite 2
Nashville, TN 37243-3400
Texas Money Services Business Law
CHARLES G. COOPER
Commissioner, Department of Banking
State of Texas
2601 N. Lamar Blvd
52Page 53 Austin, TX 78705
RICK PERRY
Governor
State of Texas
1100 San Jacinto
Austin, TX 78701
GREG ABBOTT
Attorney General
State of Texas
300 W. 15th Street
Austin, TX 78701
Utah Financial Institutions Law
G. EDWARD LEARY
Commissioner, Department of Financial Institutions
State of Utah
324 South State Street
Suite 201
Salt Lake City, UT 84111
GARY HERBERT
Governor
State of Utah
Utah State Capitol Complex
350 North State Street
Suite 200
Salt Lake City, UT 84114-2220
MARK SHURTLEFF
Attorney General
State of Utah
Utah State Capitol Complex
350 North State Street
Suite 230
Salt Lake City, UT 84114-2320
Vermont Statutes Annotated, Title 8, Chapter 79: Money Services Act
STEVE KIMBELL
Department of Banking, Insurance, Securities and Health Care Administration
State of Vermont
89 Main Street
Montpelier, VT 05620-3101
53Page 54 PETER SHUMLIN
Governor
State of Vermont
109 State Street
Pavilion
Montpelier, VT 05609
WILLIAM SORRELL
Attorney General
State of Vermont
109 State Street
Montpelier, VT 05609-1001
Virginia Code, Title 6.2, Chapter 19: Money Order Sellers and Money Transmitters
E. JOSEPH FACE, JR.
Commissioner, State Corporation Commission, Bureau of Financial Institutions
Commonwealth of Virginia
Tyler Building
th
8 Floor
1300 E. Main Street
Richmond, VA 23219
BOB MCDONNELL
Governor
Commonwealth of Virginia
Patrick Henry Building
3rd Floor
1111 East Broad Street
Richmond, VA 23219
KEN CUCCINELLI
Attorney General
Commonwealth of Virginia
900 East Main Street
Richmond, VA 23219
Washington, Chapter 19.230 RCW: Uniform Money Services Act
SCOTT JARVIS
Director, Department of Financial Institutions
State of Washington
150 Israel Road SW
Tumwater, WA 98501
CHRISTINE GREGOIRE
Governor
State of Washington
54Page 55 416 Sid Snyder Avenue SW
Suite 200
Olympia, WA 98504
ROB MCKENNA
Attorney General
State of Washington
1125 Washington Street SE
Olympia, WA 98504
Washington, D.C. Money Transmitters Law
ALBERT L. ELDER III
Interim Commissioner, Department of Banking and Financial Institutions
District of Columbia
1400 L Street, NW
Suite 400
Washington, DC 20005
VINCENT GRAY
Mayor
District of Columbia
1350 Pennsylvania Avenue, NW
Suite 316
Washington, DC 20004
IRVIN B. NATHAN
Attorney General
District of Columbia
441 4th Street, NW
Washington, DC 20001
West Virginia Issuance and Sale of Checks, Drafts and Money Orders Act
SARA M. CLINE
Commissioner, Division of Banking
State of West Virginia
One Players Club Drive
Suite 300
Charleston, WV 25311-1638
EARL RAY TOMBLIN
Governor
State of West Virginia
State Capitol
1900 Kanawha Boulevard, East
Charleston, WV 25305
55Page 56 DARRELL MCGRAW
Attorney General
State of West Virginia
State Capitol
Building 1, Room E-26
Charleston, WV 25305
Wisconsin
PETER BILDSTEN
Secretary, Department of Financial Institutions
State of Wisconsin
345 W Washington Avenue
Madison, WI 53703
SCOTT WALKER
Governor
State of Wisconsin
115 East State Capitol
Madison, WI 53702
J. B. VAN HOLLEN
Attorney General
State of Wisconsin
114 East State Capitol
Madison, WI 53702-7857
Wyoming Money Transmitter Act
JEFFREY C. VOGEL
Commissioner, Division of Banking
State of Wyoming
rd
Herschler Building, 3 Floor East
122 West 25th Street
Cheyenne, WY 82002
MATT MEAD
Governor
State of Wyoming
State Capitol
200 West 24th Street
Cheyenne, WY 82002-0010
GREGORY A. PHILLIPS
Attorney General
State of Wyoming
123 Capitol Building
200 W. 24th Street
56Page 57 Cheyenne, WY 82002
57Page 58 CERTIFICATE OF MAILING AND SERVICE
I certify that on November 14, 2011, a true copy of the foregoing COMPLAINT FOR
DECLARATORY AND INJUNCTIVE RELIEF AND JURY DEMAND is being served via
USPS Certified Mail and electronic mail to the following addresses:
TRACI STEVENS
Acting Secretary, Business, Transportation
and Housing Agency
State of California
980 9th Street
Suite 2450
Sacramento, CA 95814-2719
traci.stevens@bth.ca.gov
EDMUND G. BROWN, JR.
Governor
State of California
State Capitol
Suite 1173
Sacramento, CA 95814
nancy.mcfadden@gov.ca.gov
jim.humes@gov.ca.gov
WILLIAM HARAF
Commissioner, Department of Financial
Institutions
State of California
45 Fremont Street
Suite 1700
San Francisco, CA 94105-2219
william.haraf@dfi.ca.gov
JACOB A. APPELSMITH
Senior Advisor to the Governor
State of California
3927 Lennane Drive
Suite 100
Sacramento, CA 95834
jacob.appelsmith@abc.ca.gov
ROBERT VENCHIARUTTI
Deputy Commissioner, Department of
Financial Institutions
State of California
45 Fremont Street
Suite 1700
San Francisco, CA 94105-2219
rvenchiarutti@dfi.ca.gov
KAMALA HARRIS
Attorney General
State of California
1300 "I" Street
Sacramento, CA 95814-2919
kamala.harris@ag.ca.gov
By
Aaron Greenspan
President & CEO
Think Computer Corporation
3260 Hillview Avenue
Palo Alto, CA 94304-1226
legal@thinkcomputer.com
58
PDF Page 1
PlainSite Cover Page
PDF Page 2
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
THINK COMPUTER CORPORATION,
Plaintiff,
v.
ROBERT VENCHIARUTTI, in his official
capacity as Deputy Commissioner of the California
Department of Financial Institutions; WILLIAM
HARAF, in his official capacity as Commissioner
of the California Department of Financial
Institutions; TRACI STEVENS, in her official
capacity as Acting Secretary of the California
Business, Transportation and Housing Agency;
JACOB A. APPELSMITH, in his official capacity
as Senior Advisor to the Governor of the State of
California; EDMUND G. BROWN, JR., in his
official capacity as Governor of the State of
California; and KAMALA HARRIS, in her official
capacity as Attorney General of the State of
California,
Case No.: CV11-05496
COMPLAINT FOR
DECLARATORY AND
INJUNCTIVE RELIEF AND
JURY DEMAND
Defendants.
Plaintiff Think Computer Corporation hereby states as follows:
INTRODUCTION AND SUMMARY
1.
Each year, billions of dollars worth of retail transactions are processed through
electronic means via plastic debit and credit cards. These plastic cards have largely taken the
place of cash and coin in the United States, and their issuance by banks has become the source of
enormous controversy for a variety of reasons. Cards are expensive for merchants to process and
frequently levy onerous interest rates on those consumers who are unable to pay their bills in a
1
PDF Page 3
timely fashion. Yet despite all of the problems associated with plastic payment cards, there are
only four major issuers, and otherwise barely any meaningful competition exists.
2.
Money transmitters, non-bank entities that handle funds on behalf of third-parties on
a regular basis, are well-positioned to introduce products competitive with plastic cards, with one
caveat: they are currently regulated by a patchwork of state laws (“Money Transmission Laws”
or “MTLs”), that have been gradually introduced in almost every state since the mid-1960s.
These statutes initially came into being in response to specific money order scandals affecting
particular localities, until many years later, when large financial corporations realized that they
could also be effective tools used as barriers to entry, at which point they began to proliferate.
3.
This case arises from the efforts of a regulatory agency of the State of California,
namely the Department of Financial Institutions (DFI), to enforce the 2010 Money Transmission
Act (MTA), one of approximately forty-seven MTLs involving domestic money transmission.
The DFI, under the leadership of Defendant William Haraf, has repeatedly refused to divulge
public information obviously necessary to apply for a license with a reasonable chance of
approval. The DFI has further made false statements regarding Plaintiff; threatened to prosecute
Plaintiff and Plaintiff’s principals for operating as a money transmitter even in jurisdictions
outside of California where Plaintiff was otherwise legally permitted to do so; and enforced the
MTA on an arbitrary and capricious basis based on the “personal experience” of DFI staff,
including Defendant Robert Venchiarutti.
4.
Over a period of several months, Plaintiff’s attempts to resolve its differences with
the DFI ultimately involved requesting assistance from Defendant Traci Stevens, Acting
Secretary of the California Business, Transportation and Housing Agency (BTH) that oversees
DFI, and Defendant Edmund G. Brown, Jr., Governor of the State of California, who oversees
2
PDF Page 4
BTH. Plaintiff’s requests to the Governor for assistance were eventually delegated to and
summarily dismissed by Defendant Jacob A. Appelsmith, Senior Advisor to the Governor.
5.
All states, including the State of California, are bound by the United States
Constitution to refrain from issuing and regulating state-wide currencies, and to refrain from
regulating interstate commerce. Defendants have unlawfully attempted to do at least the latter by
arbitrarily restricting the flow of dollars into and out of California, and by specifically
prohibiting payment processors from conducting interstate commerce without meeting
requirements that are impossibly difficult to satisfy forty-seven times over for all but a very few
enormous organizations.
6.
Plaintiff, a private corporation, provided money transmission and stored value
services legally in the State of California through June 30, 2011, prior to a deadline established
by the MTA for existing money transmitters per California Financial Code § 1872 (the
“Compliance Deadline”). After the deadline, without the ability to file an application for
licensure with a reasonable chance of approval by the DFI, Plaintiff ceased operations in
California and nationwide. This caused damage to Plaintiff’s reputation, business operations,
competitive edge, and earnings.
7.
Many of Plaintiff’s competitors whose activities also clearly fell within the scope of
the MTA continued operating regardless, either unaware of or unconcerned about the new law
and the potential criminal penalties for violation. Plaintiff’s reputation was indisputably harmed
by the DFI’s arbitrary enforcement efforts when many individuals in the technology and finance
industries reasonably questioned what Plaintiff had done “wrong” to deserve regulatory scrutiny
from which Plaintiff’s many unlicensed competitors were effectively exempt.
3
PDF Page 5
8.
Consequently, Plaintiff eventually filed thirty-three formal complaints about
unlicensed money transmitters with the DFI (see attached Schedule A), to highlight the erratic
and arbitrary nature of its enforcement efforts.
9.
The inhibition of Plaintiff’s ability to conduct interstate commerce is a symptom of a
broken financial regulatory system that has been hijacked by expensive lobbyists, that uses the
phrase “consumer protection” as a thin veneer for supporting wealthy private interests, and that
cannot keep up with the pace of changing technology. The associated problems in California,
though exacerbated by the inept bungling of bureaucrats in that state, apply generally to all states
with MTLs. By policy and practice, the California DFI and all similar state regulatory
institutions have violated, and are violating, the rights of any non-bank entity seeking to act as a
conduit by which other parties can conduct interstate commerce. Such entities include thousands
of payroll processors, law firms, real estate agents, escrow services, private universities, and
technology companies.
10. To remedy these violations of administrative law and constitutional violations and
put an end to the ongoing harm caused by Defendants, Plaintiff Think Computer Corporation
seeks declaratory and injunctive relief invalidating the California MTA and all MTLs and
prohibiting their enforcement. Plaintiff further seeks monetary damages from the State of
California for the irreparable harm done to the company’s reputation, competitive edge, earnings,
and future potential.
JURISDICTION
11. This action raises questions under Article I, Section 8, Clause 3 (the “Commerce
Clause”) of the United States Constitution, as well as Article I, Section 10, Clause 1 of the
United States Constitution.
4
PDF Page 6
12. This Court has original jurisdiction over these federal claims pursuant to 28 U.S.C.
§§ 1331 and 1343, and has jurisdiction over state law and common law claims pursuant to the
doctrine of pendant jurisdiction.
13. This Court has authority to award the requested declaratory relief under 28 U.S.C. §
2201; the requested injunctive relief under 28 U.S.C. 1343(3); the requested damages under 28
U.S.C. 1343(3); and attorney’s fees under 42 U.S.C. § 1988.
VENUE
14. Venue is proper under 28 U.S.C. § 1391 in the Northern District of California
because a substantial part of the actions or omissions giving rise to this case occurred within this
District, and at least one Defendant resides or operates within this District.
THE PARTIES
Plaintiff
15. Plaintiff Think Computer Corporation (“Think”) is a privately-held Delaware
corporation with its headquarters located at 3260 Hillview Avenue, Palo Alto, CA 94304-1226
in Santa Clara County, in this District. Its President and CEO is Aaron Greenspan.
Defendants
16. Defendant Robert Venchiarutti is Deputy Commissioner, Money Transmitters of the
California DFI. He is responsible for the policies and procedures carried out by the DFI relating
to money transmission and stored value, including enforcement of the MTA. Defendant
Venchiarutti works at least part-time in the San Francisco office of the DFI, within this District.
He is sued in his official capacity.
17. Defendant William Haraf is Commissioner of the California DFI. He is responsible
for the policies and procedures carried out by the DFI, including enforcement of the MTA.
5
PDF Page 7
Defendant Haraf works at least part-time in the San Francisco office of the DFI, within this
District. He is sued in his official capacity.
18. Defendant Terri Stevens is Acting Secretary of the California Business,
Transportation and Housing Agency (BTH). She supervises the DFI and is responsible for
enforcement of the MTA. She is sued in her official capacity.
19. Defendant Edmund G. Brown, Jr. is Governor of the State of California. He
supervises the BTH and is responsible for enforcement of the MTA. He is sued in his official
capacity.
20. Defendant Kamala Harris is Attorney General of the State of California. Defendant
Harris (hereinafter, the “Attorney General”) is responsible for the enforcement of the MTA and
is sued in her official capacity.
FACTUAL BACKGROUND
A. The 2010 California Money Transmission Act
21. On August 20, 2010, the California General Assembly voted for passage of
Assembly Bill 2789, the Money Transmission Act. The MTA, sponsored exclusively by a
financial industry lobbying group called The Money Services Round Table (which counts several
multi-billion dollar corporations as its members) and written with the assistance of Defendant
Venchiarutti, combined three prior California laws regulating financial institutions into one. It
also established new requirements for entities wishing to transmit money domestically (i.e.
within the United States). Prior to the MTA, only money transmitters dealing in the international
transmission of funds had been regulated by California law.
22. Former California Governor Arnold Schwarzenegger signed the bill on September
30, 2010 and the MTA became law effective January 1, 2011, with a 180-day grace period
allowing existing, unlicensed money transmitters to continue operations until July 1, 2011, at
6
PDF Page 8
which point an application for a license was required to be on file with the DFI in order to legally
proceed with money transmission.
23. Congress’s prior passage of the USA PATRIOT Act made penalties for violating any
state money transmission law especially severe. § 373 of the USA PATRIOT Act modified 18
U.S.C. 1960 by broadening the meaning of an “unlicensed money transmitting business” to,
according to the Commonwealth of Massachusetts, “eliminate the need to prove that the business
knowingly operated without a license. In addition, the definition includes anyone who fails to
register as a money transmitter with FinCEN.”1
24. California is one of forty-six states (plus the District of Columbia and certain U.S.
territories) that enforce MTLs related to domestic money transmission and stored value (see
attached Schedule B). Each MTL requires the entity wishing to transmit money in that
jurisdiction to fill out completely different forms; pay different application fees on differing
bases; raise surety bonds of differing amounts in the absence of a federal insurance program for
money transmitters similar to the Federal Deposit Insurance Corporation (FDIC); meet different
minimum net worth and/or asset size requirements; provide fingerprints and data for criminal
background checks in differing formats; register with different state agencies unrelated to finance
for differing purposes; wait different lengths of time for approval; and post-licensure, to provide
different reports at different frequencies containing different data to different agencies.
25. Despite the existence of organizations such as the Money Transmitter Regulators
Association, of which Defendant Venchiarutti is Vice-President, and which counts most states
with MTLs as its members, there is absolutely no standardization between states in any regard
related to the regulation of money transmission.
1
http://www.mass.gov/?pageID=ocaterminal&L=4&L0=Home&L1=Business&L2=Banking+Industry+Services&L3
=Industry+Letters&sid=Eoca&b=terminalcontent&f=dob_patriot&csid=Eoca.
7
PDF Page 9
26. The United States Department of the Treasury does coordinate the registration of
money transmitters through its FinCEN division, but this function exists mainly as a data
collection mechanism to prevent fraud due to the requirements of the federal Bank Secrecy Act
(BSA).
27. The MTA’s specific requirements for new money transmitters wishing to hold and
transmit funds domestically or internationally are complex and among the most onerous in the
nation when compared with the requirements of most other states. The MTA requires $500,000
in “tangible net worth” (shareholder equity) at all times, in addition to a $250,000 surety bond
for companies engaging in money transmission, a $500,000 surety bond for companies providing
stored value products, a non-refundable $5,000 application fee, a criminal background check, a
business plan, pro-forma financial statements for three years, audited past financial statements,
the formal paper application, and a pre-application interview.
28. In contrast, many other states have different requirements. The State of Alabama
requires a $25,000 surety bond with its MTL application, a fee under $500, and no interview.
The State of Pennsylvania requires a $1,000,000 surety bond with its MTL application but has no
tangible net worth requirement. The State of Hawaii requires a $1,000 scalable surety bond with
its MTL application and prefers digital fingerprints, which the State of Louisiana disallows.
29. Banking is a close analog to money transmission, and on a relative basis, the state
regulatory regime for banks, managed by the parties enumerated in the attached Schedule B,
including Defendants, generally involves even more stringent financial prerequisites for
applicants wishing to obtain bank charters. There are two key differences, however. First, while
a bank could decide to apply for a charter in any given state, it could instead choose to apply for
a national charter, allowing it to operate in all fifty states without having to file fifty applications,
raise fifty times as much capital, and report to fifty separate regulators. Money transmitters have
8
PDF Page 10
no such option due to MTLs. Second, national charters are made possible by an insurance
network that covers every licensed institution nationwide, regardless of location, charter type or
asset size, in the form of FDIC insurance for banks or National Credit Union Administration
(NCUA) insurance for credit unions. These types of insurance work because premiums paid by
the insured parties cover each other. In contrast, each money transmitter’s premiums insure only
itself. Though bond underwriters are able to offset their risk by collecting bond premiums from
multiple entities, the risk to consumers remains the same, and the cost to bondholders (the money
transmitters) is enormous.
30. Due to the wildly different requirements for licensure, the MTA and all MTLs have
an effect equivalent to that of establishing intangible currencies on a state-by-state basis. In a
hypothetical purely digital society, one that the United States is quickly moving toward, currency
can be defined as a set of restrictions on information that is used to represent debts. The
equivalent of a state-issued currency in such a society is therefore a set of restrictions on
monetary transfers within each state by each state, which is functionally equivalent to the present
set of MTLs.
31. Though the apparatus for a federal regulator of money transmitters already exists in
the form of the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN),
its power is severely limited by state regulators. Despite nominal goals of consumer protection,
MTLs so restrict the competitive environment and so fragment the regulatory regime that
consumers are actually harmed by monopolistic business practices and regulatory arbitrariness to
an extent that vastly exceeds the extremely limited protection offered by surety bonds.
32. Investors who might support small corporations in their efforts to acquire licenses are
generally spooked by the regulatory uncertainty surrounding money transmission. The MTA
9
PDF Page 11
and all MTLs therefore have a chilling effect on competition in the payment processing market,
as well as other markets that involve money transmission.
33. The MTA restricts entities wishing to do business with California residents, and not
just entities physically located in California. Therefore, despite being a state law, the MTA’s
scope extends far beyond California’s borders, encompassing the entire nation. Even though
California law enforcement has no jurisdiction outside of the state, the combined influence of the
USA PATRIOT Act and the DFI’s policy of referring all offenders to the regional United States
Attorney’s Office means that the State of California effectively polices the entire country, as
does each state’s financial regulator. This, too, has a chilling effect on competition in the
financial sector.
B. Think’s Actions as a Money Transmitter Prior To Passage of the MTA
34. Plaintiff began researching, designing and investing in the FaceCash mobile payment
system (“FaceCash”) in late 2008, well before any domestic MTL had been proposed in
California. Plaintiff formally launched FaceCash in May, 2010. The FaceCash system had
several aims: first and foremost, to lower payment processing, or interchange, fees for businesses
small and large. In addition, FaceCash was designed to simplify the process of computing taxes
and accounting reports generally for merchants, and to make electronic receipts and coupons a
reality for consumers. The system achieved this through the use of Think’s proprietary software
and patent-pending technology. By the end of June, 2011, despite facing regulatory constraints
in the vast majority of the country that posed a problem for national retailers otherwise extremely
interested in the payment system, Think had signed up twenty-five merchants and approximately
500 consumers for FaceCash.
35. Working on a pre-paid debit model, FaceCash involved holding consumer deposits in
a pooled bank account until such time as a consumer requested a withdrawal from their given
10
PDF Page 12
FaceCash account, or the money was spent at a participating merchant. Due to the necessity of
holding consumer deposits for the model to succeed, Plaintiff’s activities fell within the scope of
the MTA.
36. On June 30, 2011, prior to the MTA’s compliance deadline, the risk posed to
consumers by Plaintiff’s money transmission activities was extremely minimal, if not zero. Up
until the deadline, Plaintiff’s average daily money transmission volume was close to zero as
Plaintiff had only successfully finished the merchant side of the product two days prior.
Plaintiff’s cash assets always exceeded its liabilities to FaceCash depositors by a significant
factor. By design, Plaintiff did not extend credit to FaceCash consumers, nor did Plaintiff make
loans as a bank might. Plaintiff also carefully tracked account balances and fraud rates (which
were minimal), meaning that even in the highly unlikely event of default Plaintiff could still
afford to refund every consumer’s funds.
37. No formal complaints were filed with any regulatory agency against Plaintiff,
including the DFI, prior to the Compliance Deadline or as of the date of this briefing. Nor has
Plaintiff ever been named as a defendant in any civil lawsuit, any criminal charge, or any legal
proceeding involving money transmission in any way.
38. Plaintiff contacted the DFI by telephone in mid-2010 to ensure that it was in
compliance with any applicable state laws. The call was short: Mr. Julio Prada informed
Plaintiff that no license was necessary for domestic money transmission and hung up.
39. Plaintiff next contacted the DFI by e-mail on April 1, 2011 to inquire as to the status
of money transmission law in California after reading an article suggesting that policies had
changed. Mr. Prada responded promptly indicating, “We now regulate domestic and stored
value money transmission activities (effective January 1, 2011),” and began arranging for the
11
PDF Page 13
mandatory pre-filing meeting to take place between Plaintiff and DFI. The DFI ultimately
scheduled the meeting for June 14, 2011, roughly two weeks before the Compliance Deadline.
40. Prior to the meeting, Plaintiff attempted to open a dialog between the DFI, members
of the California General Assembly, and Plaintiff regarding the extreme magnitude of the MTA’s
prerequisite filing requirements. Defendant Venchiarutti unilaterally quashed these efforts by
terminating a planned conference call, stating that the DFI had a practice of not communicating
with legislators via conference call.
41. On June 14, 2011, Plaintiff’s Chief Executive Officer, Mr. Aaron Greenspan, and
Mr. Christian Kalva (a/k/a Jerry Klein), a full-time contractor for Plaintiff, attended a mandatory
pre-interview meeting at the San Francisco offices of the DFI. Present at the interview from the
DFI were Defendant Venchiarutti and two DFI staff members: Mr. Julio Prada, and Mr. Omar
Shahin.
42. At considerable expense, Plaintiff provided the DFI with a copy of the company’s
audited 2010 financial statements ahead of the interview, per the DFI’s written requirements. In
person, Defendant Venchiarutti incorrectly denied that the DFI required audited financial
statements, but claimed to have reviewed them nonetheless. Unbeknownst to Plaintiff and the
DFI, these statements contained a serious error caused by the auditor that made Plaintiff appear
to have $145,000 less in tangible shareholder equity than it did in actuality on December 31,
2010. The auditor later issued re-stated financial statements for Plaintiff.
43. To the surprise of Plaintiff, the tenor of the interview was extremely hostile. After
Mr. Prada and Mr. Shahin briefly introduced themselves, Defendant Venchiarutti dominated the
conversation in a bullying, patronizing, unprofessional and condescending manner, generally not
conductive to the advancement of the license application process. Defendant Venchiarutti
frequently cut off Mr. Greenspan’s attempts to speak. Several specific statements made by
12
PDF Page 14
Defendant Venchiarutti in this pointed fashion altered Plaintiff’s impression of the DFI’s actual
policies toward licensure under the MTA:
a) Defendant Venchiarutti began by insisting that Plaintiff would need to raise at
least “$20 million” of capital, not $500,000 as stated in the MTA, with
venture capital being the implied source of funding, based on his “personal
experience,” which was that all money transmitters required at least “three
years” to achieve profitability.
b) In response to Plaintiff’s shock at the false assumptions embodied by
Defendant Venchiarutti’s opening statement, Defendant Venchiarutti asked
whether Plaintiff believed the meeting to be “a classroom exercise,” in a clear
reference to Mr. Greenspan’s and Mr. Klein’s relatively younger age.
c) As the meeting continued, Defendant Venchiarutti implied various figures as
the actual minimum amount of capital necessary to successfully apply for a
license, including “$1 million,” “$2 million,” and at one point, “$80 million.”
d) When Mr. Greenspan questioned Defendant Venchiarutti’s basis for such
figures and asked general questions about the MTA appropriate given the
purpose of the meeting, Defendant Venchiarutti falsely accused him of
expressing intent to violate the MTA, and exclaimed that he should, “choose
[his] words carefully in this room.” He proceeded to threaten to have Mr.
Greenspan incarcerated.
e) Defendant Venchiarutti stated “I don’t care if you have the greatest product in
the world!...” implying that Plaintiff would not be granted a license under any
circumstances. He also stated that he did not believe that Plaintiff could raise
the necessary capital to apply for a license, and that even if it did, the DFI
13
PDF Page 15
would “need” to conduct a thorough background check on all investors to
make sure that they were actually legitimate sources of funding.
f) Defendant Venchiarutti further suggested that Plantiff’s technology had to be
deficient since Plaintiff had not raised outside capital, an insulting statement
based on profoundly incorrect assumptions about technology and venture
capital investing in general and Plaintiff in particular.
g) Defendant Venchiarutti falsely suggested that Plaintiff was “already
insolvent” and that Plaintiff was unable to control its rate of spending.
Though both statements were demonstrably untrue, by this point Mr.
Greenspan decided not to volunteer any further information of any kind to
Defendant Venchiarutti.
h) Defendant Venchiarutti stated that for years (necessarily meaning prior to the
passage of the MTA), the DFI had an unwritten policy of not approving
applications filed by money transmission entities with tangible net worth less
than one million dollars.
i) In response to Mr. Greenspan’s repeated direct question as to whether or not
the DFI had received any formal complaints regarding FaceCash, Defendant
Venchiarutti falsely asserted that the DFI had received complaints from
“someone—I think it was your competitors complaining about you.”
Defendant Venchiarutti later admitted that the DFI had not actually received
any complaints about FaceCash to the best of his knowledge.
j) At the conclusion of the meeting, Defendant Venchiarutti refused to provide a
business card to Mr. Greenspan when asked, and stated that Plaintiff was still
welcome to apply for a license, if that was what Plaintiff really wanted to do.
14
PDF Page 16
The implication that Plaintiff’s application would be denied was
unmistakable.
44. Since the end of 2010, but prior to the June 14 interview, Think had raised
approximately $500,000 in additional funding from family members of Mr. Greenspan, placing
Plaintiff’s tangible shareholder equity well above the written statutory minimum of $500,000
established by the MTA. Updated financial statements reflecting the infusion of funding were
not yet available from Plaintiff’s auditors at the time of the June 14 interview, and given the
threat concerning extensive background checks on investors, Mr. Greenspan felt uncomfortable
disclosing such information to Defendant Venchiarutti for fear that it might somehow be used
against Plaintiff or Mr. Greenspan’s family.
45. Mr. Greenspan followed up with Defendant Venchiarutti via e-mail after the
meeting, and continued to have difficulty establishing the true minimum net worth required by
the DFI in order to apply for a license under the MTA.
46. Given that state MTL applications generally require the applicant to indicate if a
license has ever been rejected for any reason, on June 30, 2011 Mr. Greenspan decided that
Plaintiff could not run the likely risk of nationwide rejection, and opted to shut down FaceCash
in California and nationwide.
47. Mr. Greenspan enlisted the informal assistance of Ms. Eileen Newhall, Staff Director
of the California Senate Banking and Financial Institutions Committee, to try to ascertain the
DFI’s unwritten requirements. Despite repeated attempts to communicate with Defendant
Venchiarutti, Ms. Newhall was unsuccessful at achieving this goal.
48. Mr. Greenspan further requested formal assistance from Assemblyman Richard
Gordon, representing the 21st District, including Palo Alto, where Plaintiff is located and where
Mr. Greenspan resides. Assemblyman Gordon’s District Director, Mr. Jeremy Dennis, at first
15
PDF Page 17
attempted to establish a constructive dialog with Defendant Venchiarutti, and then with
Defendant Venchiarutti’s supervisor, Defendant Haraf. Mr. Dennis reported back to Mr.
Greenspan that Defendant Haraf had forwarded a voicemail left by Mr. Dennis intended only for
Defendant Haraf back to Defendant Venchiarutti, and that Defendant Venchiarutti had followed
up by leaving a threatening voicemail for Mr. Dennis instructing him never to call his boss again.
Mr. Dennis called this episode the worst communications breakdown he had seen in his career in
government, but eventually grew so frustrated at the lack of progress that he delivered an
ultimatum: that either Plaintiff could apply for a license without knowing the prerequisite
requirements, or proceed of its own accord without the assistance of the Assemblyman. When
Mr. Greenspan refused to do so on behalf of Plaintiff, citing the non-refundable $5,000
application fee and inter-linked nature of MTL license application processes, Mr. Dennis
unilaterally withdrew Assemblyman Gordon’s office from providing any further assistance to
Plaintiff.
49. Before withdrawing, Mr. Dennis put Mr. Greenspan in touch with DFI Senior
Counsel Tony Lehtonen. In his first e-mail communication with Plaintiff, Mr. Lehtonen wrote,
“My experience is that required levels are established only after a transmitter applicant’s
application.” Mr. Greenspan and Mr. Lehtonen subsequently exchanged several e-mails and
spoke on the phone several times. On September 12, 2011, Mr. Greenspan sent Mr. Lehtonen
several documents, including documents that had already been submitted to the DFI, and
Plaintiff’s re-stated audited financial statements. Mr. Greenspan also informed Mr. Lehtonen
that Plaintiff had received additional investment since the date of the audited financial statements
which resulted in Plaintiff’s net worth being well above the statutory threshold. Though Mr.
Lehtonen was unable to provide answers to any questions posed by Plaintiff during these calls, at
various points he did state the following:
16
PDF Page 18
a) He believed Mr. Greenspan’s concerns and tone to be reasonable and not as
extreme as what he had been led to believe by others at the DFI;
b) He had been told that money transmitters generally needed three years to
become profitable;
c) He could not remember the last time that the DFI had licensed a money
transmitter with only the $500,000 statutory minimum in tangible net worth;
d) He had not previously been aware of the documents submitted to the DFI by
Plaintiff;
e) It was possible that the DFI’s regulations had not kept pace with technological
developments;
f) The DFI would probably not actively investigate any unlicensed money
transmitters;
g) The DFI legal department was surprised by and confused by the need for the
domestic money transmission regulations embodied by the MTA, which many
DFI attorneys considered a waste of time and resources.
50. On October 17, 2011, when Mr. Greenspan called to inquire again as to the DFI’s
actual prerequisites for filing a license application under the MTA, Mr. Lehtonen told Mr.
Greenspan that he had been instructed that he was no longer allowed to speak any further with
him and immediately hung up.
51. As of the date of this filing, all efforts to clarify the basis for the MTA’s
requirements, as well as the actual requirements themselves, through telephone calls, e-mails,
and written letters to the DFI, Defendant Stevens of the BTH Agency, the Governor’s office,
members of both houses of the California legislature, and members of both houses of Congress,
have been unsuccessful.
17
PDF Page 19
C. DFI’s Arbitary Enforcement of the MTA and the Effects Thereof on Plaintiff
52. The MTA exempts certain classes of entities from the law’s requirements, but the list
of exemptions is not exhaustive, causing some institutions to violate the statute on a daily basis
(at least since July 1, 2011).
53. Private universities, for example, are not exempt from the MTA, but frequently issue
stored value instruments to students under names such as “Crimson Cash” (offered by Harvard
University), “Cardinal Dollars” (offered by Stanford University) and “TechCASH” (offered by
MIT) that can be used either on campus or to transmit money to area merchants via routine
purchases. Such money transmission systems are designed to temporarily eliminate the need for
debit and credit cards, protecting students from predatory lending practices frequently targeted at
youth with limited or non-existent credit history. These programs are extremely common
nationwide at institutions that enroll California residents, yet not a single institution of higher
education is registered in California as a money transmitter with the DFI, making university
presidents and trustees criminally liable.
54. Other types of entities regularly violate state money transmission statutes, including
the MTA. These institutions include:
a) Payroll processors, which draft funds on behalf of clients in advance of tax
and benefit deadlines;
b) Real estate agents, which handle funds for buyers and sellers of homes;
c) Law firms, which regularly collect funds from clients to forward to courts,
government agencies and adverse parties;
d) Construction companies, which use client funds to pay for materials and
equipment; and
e) Technology companies, which facilitate electronic payments.
18
PDF Page 20
55. News of the FaceCash shut down was widely publicized and regarded as an
important event in the technology industry, and the payments industry in particular. Plaintiff
immediately lost the actual and potential revenue streams from its established FaceCash
merchants, the ability to sign up California consumers for the service, and the standing to
realistically enter into partnership negotiations with device manufacturers and other key partners.
At least one prospective merchant cancelled his agreement to use Think software for purposes
aside from FaceCash directly due to the regulatory uncertainty surrounding the MTA. The news
clearly damaged Think’s reputation, and many individuals who learned of the events blamed
Think and its management for the interruption in service.
56. Due to the shut down, Plaintiff refunded over $40,000 to depositors, incurring
higher-than-average bank transfer fees as a result.
57. Directly due to the regulatory uncertainty surrounding the MTA and other MTLs,
Plaintiff was subsequently rejected as an investment opportunity by several prominent venture
capital firms, eliminating virtually the only source of funding large enough to realistically allow
Plaintiff to comply with the MTA.
58. Due to the effects of the MTA, one of Plaintiff’s key full-time software developers
resigned in late June, 2011, leaving the company without the individual who had designed
crucial parts of the FaceCash system software.
59. Due to the DFI’s interpretation of the MTA’s scope as being nationwide, Plaintiff
was unable to grow FaceCash to a national scale, leading to a loss of prospective revenues and
presenting a window of opportunity for Plaintiff’s competitors. Some of Plaintiff’s competitors
took advantage of this opportunity to conduct money transmission illegally without fear of being
noticed, putting Plaintiff at an even further disadvantage.
19
PDF Page 21
60. Due to Plaintiff’s forced inability to operate the FaceCash system without risking
criminal prosecution, FaceCash merchants were forced to once again pay higher per-transaction
fees to their original payment service providers.
61. With some prospective applicants such as Plaintiff, the DFI used criminal
prosecution as a threat not only when appropriate, but whenever questions of any kind regarding
its actions were raised. Yet with other prospective applicants, the DFI turned a blind eye, even
when entities were actively engaged in money transmission on a massive scale that would be
evident from reading any newspaper.
62. On October 13, 2011, three and a half months after FaceCash shut down, the DFI
relented and issued an order signed by Deputy Commissioner Robert Venchiarutti “exempting”
Plaintiff from the portion of the MTA that purported to regulate California companies activities
in states outside of California. The order did not however exempt Plaintiff from any of the
MTA’s requirements within California. Therefore, FaceCash remained shut down.
CLAIMS FOR RELIEF
FIRST CLAIM
Failure to Allow Review of Proposed California Regulations (1 CCR § 44)
63. Plaintiff repeats and realleges each of the foregoing allegations in this Complaint.
64. Defendants, acting under color of state law, policy and practice, have enacted
regulations that are vague, overbroad, arbitrary and obfuscatory with regard to the prerequisite
requirements necessary to obtain a license for money transmission in the State of California.
Defendants have conditioned the ability to obtain such a license on the subjective emotional
reaction of the examiner, and not on the requirements of the statute that Defendants are obligated
to enforce. After repeated requests from Plaintiff and members of the California legislature,
Defendants continue to refuse to disclose the real requirements to apply for a license.
20
PDF Page 22
65. The only publicly available written record of Defendants’ actual prerequisite
policies, far exceeding those written in the statue, is a single unattributed quotation contained
within an article entitled “Think Computer Ends Mobile Payments in California” in American
Banker, stating, “A department spokeswoman says the actual amount needed is ‘more than $1
million.’” However, American Banker is a trade publication owned and operated by
SourceMedia, Inc. and not an official publication of the DFI.
66. Defendants have established said regulations without the opportunity for appropriate
public discourse through a hearing and comment period as required by 1 CCR § 44.
67. Defendants have repeatedly failed to provide a copy of said regulations in writing,
despite insisting that the regulations represent a longstanding unwritten policy of the DFI.
68. Because of Defendants’ actions, Plaintiff has suffered and continues to suffer
irreparable harm that cannot be fully obviated by an award of monetary damages.
69. Plaintiff is entitled to damages in an amount determined by the Court and the
reasonable costs of this lawsuit, including its reasonable attorneys’ fees.
SECOND CLAIM
Arbitrary Enforcement of the Law in Violation of Due Process Rights Under the California
Constitution
70. Plaintiff repeats and realleges each of the foregoing allegations in this Complaint.
71. Article I, Section 7(a) of the California Constitution provides that a person may not
be deprived of liberty or property without due process of the law.
72. Defendants’ unwillingness to provide crucial, unprivileged information necessary for
Plaintiff to exercise its right to file an application for licensure under the MTA with a reasonable
chance of approval constitutes a violation of Plaintiff’s due process rights under the California
Constitution.
21
PDF Page 23
73. Defendants’ numerous false, misleading, careless and baseless statements intended to
dissuade Plaintiff from exercising its right to file an application for licensure under the MTA
with a reasonable chance of approval constitute a further violation of Plaintiff’s due process
rights under the California Constitution.
74. At least as early as October 17, 2011, Defendants’ sudden institution of a policy
refusing to allow further communication with Plaintiff constitutes a further violation of
Plaintiff’s due process rights under the California Constitution.
75. Defendants, acting under color of law and consumer protection, have selectively
enforced its vague, overly broad, and often unwritten regulations in a manner so arbitrary and
capricious that they are comfortable citing unwritten policy based on only their own “personal
experience” as necessary to justify any given application’s approval or rejection, with no
opportunity for public comment.
76. Because of Defendants’ actions, Plaintiff has suffered and continues to suffer
irreparable harm that cannot be fully obviated by an award of monetary damages.
77. Plaintiff is entitled to damages in an amount determined by the Court and the
reasonable costs of this lawsuit, including its reasonable attorneys’ fees.
THIRD CLAIM
Taking of Plaintiff’s Property in Violation of Due Process Rights Under the California
Constitution
78. Plaintiff repeats and realleges each of the foregoing allegations in this Complaint.
79. Article I, Section 7(a) of the California Constitution provides that a person may not
be deprived of liberty or property without due process of the law.
22
PDF Page 24
80. Prior to the enactment of the MTA, Plaintiff’s use of its computer systems and other
assets to route money on behalf of others fully complied with all federal and state licensing
requirements.
81. Plaintiff relied on this existing state of legal and regulatory affairs in purchasing,
designing, and maintaining its operations.
82. Plaintiff has a vested property right and constitutionally-protected interest in
continuing to utilize its assets in this manner without the unduly onerous restrictions imposed by
the State through the MTA, plainly aimed at extinguishing such use without exposing the State
or previously-licensed entities to legal repercussions.
83. The MTA is facially unconstitutional as a violation of the California Constitution’s
guarantees of due process, and has deprived Plaintiff of income attributable to this existing,
lawful use of property.
FOURTH CLAIM
False Light
84. Plaintiff repeats and realleges each of the foregoing allegations in this Complaint.
85. Plaintiff brings this cause of action pursuant to California Government Code §§ 815,
815.2 and 820.
86. On September 19, 2011, Defendant Appelsmith, in his capacity as Senior Advisor to
the Governor, responded to a letter sent by Plaintiff to Defendant Brown. Defendant Appelsmith
made several false statements in his response.
87. Plaintiff posted a link to a scanned digital image of Defendant Appelsmith’s written
response on the FaceCash web site to keep interested parties informed of FaceCash’s ambiguous
legal status due to the effects of the MTA. Consequently, many thousands of individuals read
Defendant Appelsmith’s response.
23
PDF Page 25
88. Defendant Appelsmith issued another written response dated October 28, 2011 in
reply to Plaintiff’s e-mail communications regarding the DFI’s arbitrary and capricious
enforcement practices. This written response was also scanned and made accessible from the
FaceCash web site.
89. Both of Defendant Appelsmith’s written responses placed Plaintiff in a false light in
the public eye.
90. First Statement Made by Defendant Appelsmith that Placed Plaintiff in a False
Light in the Public Eye
a) In his September 19, 2011 response, Defendant Appelsmith wrote, “I
understand you have been afforded another opportunity to meet with the
Department of Financial Institutions and the Department has assigned a
specific member of their staff to work with you directly.” The first part of this
statement is false and the second part of this statement is misleading.
b) Plaintiff, DFI and BTH personnel were scheduled to meet on September 14,
2011, until Mr. Greenspan inadvertently learned that that Defendant Stevens
expected Mr. Greenspan to appear in Sacramento on that day for a 9:00 A.M.
meeting, several hundred miles from Plaintiff’s headquarters, at Plaintiff’s
expense. Mr. Greenspan proposed a conference call at no expense to any of
the parties instead, to which Mr. Lehtonen at the DFI agreed. Defendant
Stevens instead cancelled the meeting and any potential conference call. After
the meeting was cancelled no additional opportunity to meet with BTH and/or
DFI was offered. The statement that “you have been afforded another
opportunity to meet with the Department of Financial Institutions” was and is
therefore false, and the implication that Plaintiff had ignored or was ignoring
24
PDF Page 26
an opportunity to resolve the situation, while continuing to write letters about
it, placed Plaintiff in a false negative light.
c) Though Mr. Lehtonen was available to discuss Plaintiff’s concerns with Mr.
Greenspan for a short period of time, the statement “the Department has
assigned a specific member of their staff to work with you directly”
necessarily implies an ongoing open line of communication with the specific
staff member. In fact, this open line of communication ceased when Mr.
Lehtonen hung up on Mr. Greenspan unprovoked and never spoke with him
again. Thus, the statement is misleading and creates a false implication that
Plaintiff’s concerns would actually be addressed by the DFI.
91. Second Statement Made by Defendant Appelsmith that Placed Plaintiff in a
False Light in the Public Eye
a) In his September 19, 2011 response, Defendant Appelsmith wrote, “Jointly,
everyone has been committed to making sure your company received fair and
equitable consideration under existing law.” This statement is false.
b) In the context of the letter, “everyone” refers to the DFI, the BTH Agency,
and the Governor’s office. Yet the hostile behavior of Defendant Venchiarutti
at the DFI, the indifferent written responses received from Defendant Stevens
at the BTH Agency, the indifferent verbal responses received from Mr. Adrian
Mata in the Governor’s office, and Defendant Appelsmith’s own written
response directly contradict the fanciful notion that anyone had any
commitment to making sure that Plaintiff received fair and equitable
consideration under the law.
25
PDF Page 27
c) Plaintiff filed thirty-three formal complaints with DFI regarding active
unlicensed money transmitters, indicating that Plaintiff was not in fact
receiving anywhere close to “fair and equitable” consideration.
d) Defendant Appelsmith’s statement created an impression that Plaintiff’s
grievances were unreasonable and unfounded, and that Plaintiff had done
something wrong to cause it to be necessary for FaceCash to shut down while
other unlicensed money transmitters continued operating, which portrayed
Plaintiff in a false negative light.
e) Defendant Appelsmith’s politically correct statement is so clearly contradicted
by voluminous evidence as to be offensive to any rational person.
92. Third Statement Made by Defendant Appelsmith that Placed Plaintiff in a False
Light in the Public Eye
a) In his September 19, 2011 response, Defendant Appelsmith wrote,
“Irrespective of the final outcome, all branches of government have applied
due diligence to this situation…everyone has worked within their purview to
provide FaceCash with appropriate guidance, and as important…every effort
has been made to encourage sound business practices in the state.” Each part
of this statement is false.
b) Despite Defendant Appelsmith’s letter, on September 19, 2011, Plaintiff still
could not file an application for a license under the MTA due to ambiguity
surrounding the tangible net worth prerequisite caused by the DFI, reflecting
the fact that at least some “appropriate guidance” was severely lacking.
c) The “guidance” provided by Defendant Venchiarutti was neither professional
nor “appropriate.”
26
PDF Page 28
d) Plaintiff filed thirty-three formal complaints with DFI regarding active
unlicensed money transmitters, indicating that Defendants were anything but
concerned with encouraging “sound business practices,” unless Defendants
actually believed that the MTA did not encourage sound business practices.
f) Defendant Appelsmith’s statement created an impression that Plaintiff’s
grievances were unreasonable and unfounded, and that Plaintiff had done
something wrong to cause it to be necessary for FaceCash to shut down while
other unlicensed money transmitters continued operating, which portrays
Plaintiff in a false negative light.
g) Defendant Appelsmith’s politically correct statement is so clearly contradicted
by voluminous evidence as to be offensive to any rational person.
93. Fourth Statement Made by Defendant Appelsmith that Placed Plaintiff in a
False Light in the Public Eye
a) Defendant Appelsmith’s October 28, 2011 response (which was oddly
postmarked six days later, only after Plaintiff had filed twenty-seven
additional formal complaints with the DFI) contained two sentences: “As I
indicated to you in my letter last month, I have reviewed this matter closely
and am satisfied that the State’s regulators have handled it appropriately.
Although you are not satisfied with the result, it is one that is compelled by
statutory directives that the State is obligated to follow.” The second sentence
of this two sentence letter is false.
b) Defendant Appelsmith does not specify which “statutory directives” in
particular he refers to, but whatever they may be, the statement remains false.
The DFI is in fact permitted by Financial Code § 1806 to exempt any entity
27
PDF Page 29
from the requirements of the MTA so long as the Commissioner finds it in the
“public interest.” Certainly no legitimate statute could obligate Defendant
Venchiarutti to ridicule and insult prospective license applicants.
c) Defendant Appelsmith’s statement created an impression that Plaintiff’s
grievances were unreasonable and unfounded, and that Plaintiff had done
something wrong to cause it to be necessary for FaceCash to shut down while
other unlicensed money transmitters continued operating, which portrays
Plaintiff in a false negative light.
94. The total effect of Defendant Appelsmith’s statements was to disparage Plaintiff in
the public eye given the widespread interest in the substance of the State’s answers to Plaintiff’s
concerns.
95. After Mr. Greenspan wrote an essay highlighting as one of its main points the DFI’s
inconsistent enforcement of the MTA, several individuals wrote responses clearly indicating that
his reputation and that of Plaintiff had been deeply harmed, simply for Plaintiff’s desiring
impartial enforcement of the law.
FIFTH CLAIM
Violation of Plaintiff’s Fourteenth Amendment Due Process Rights (42 U.S.C. § 1983)
96. Plaintiff repeats and realleges each of the foregoing allegations in this Complaint.
97. Defendants have established customs, policies, patterns, and practices of enforcing
the MTA under color of law, and have deprived Plaintiff of its due process rights in violation of
the Fourteenth Amendment to the United States Constitution.
98. The MTA and all MTLs, in that they effectively extinguish a legally valid, vested
right to use of property, is facially unconstitutional as a violation of Plaintiff’s rights to due
process under the Fourteenth Amendment to the United States Constitution.
28
PDF Page 30
99. The restriction of money transmission by states is unreasonable and onerous in that it
illegitimately and arbitrarily singles out small entities and new entities wishing to conduct
interstate commerce and wishing to provide a conduit for others to conduct interstate commerce,
constituting a violation of Plaintiff’s right to Equal Protection of the laws pursuant to the
Fourteenth Amendment to the United States Constitution.
100.All conditions precedent to the bringing of this action have occurred or have been
exhausted.
101.Plaintiff has incurred and will incur costs for attorneys and other necessary fees and
costs which are recoverable in this action under the provisions of 42 U.S.C. § 1988.
102.Pursuant to 42 U.S.C. §§ 1983 and 1988, Plaintiff is entitled to declaratory relief and
a preliminary and permanent injunction invalidating and restraining enforcement of the
California MTA and all MTLs.
SIXTH CLAIM
Violation of the Commerce Clause
103.Plaintiff repeats and realleges each of the foregoing allegations in this Complaint.
104.The MTA and all MTLs violate the Commerce Clause of the United States
Constitution by directly regulating interstate and foreign commerce and purporting to regulate
conduct that occurs in other States and Nations.
105.The MTA and all MTLs violate the Commerce Clause by regulating, on its face and
in its practical effect, the channels of interstate and foreign commerce and the use of these
channels of interstate and foreign commerce.
106.By design and in practical effect, the MTLs impermissibly regulate conduct
occurring outside of their respective states by making it a crime to offer money transmission
services to entities with no connection to or presence in the local market.
29
PDF Page 31
107.Defendants have suppressed constitutionally protected interstate trade and commerce
in order to protect the narrow interests of a select few special interests, who in some cases
sponsored MTL legislation due to their perceived benefits.
108.Defendants are purporting to act within the scope of their authority under state law in
enforcing and implementing the MTA.
109.Defendants are liable to Plaintiff for proper redress under 42 U.S.C. § 1983 because
the MTA deprives Plaintiff of the rights, privileges, and immunities secured by the Commerce
Clause of the United States Constitution.
110.Plaintiff has no adequate remedy at law.
SEVENTH CLAIM
Violation of the Commerce Clause
111.Plaintiff repeats and realleges each of the foregoing allegations in this Complaint.
112.MTLs violate the Commerce Clause by imposing excessive and unreasonable
burdens on interstate and foreign commerce that are disproportionately large relative to the
purported local benefits of the MTLs, which are in many cases negative. The MTLs impose
significant burdens on Plaintiff (and other prospective and active money transmitters) in
connection with their conduct of interstate commerce, as well as burdens on consumers and
merchants wishing to use money transmitters to conduct interstate commerce.
113.Among other burdens imposed by MTLs, executives and directors of applicants for
licensure must have their fingerprints taken again and again and again and again in order to
provide various state regulators with data to conduct criminal background checks. Additionally,
each MTL requires its own surety bond of an arbitrary fixed amount not commensurate with an
applicant’s deposits on hand. In aggregate, the financial requirements for all of the MTLs
combined are so high that most businesses simply cannot afford to enter the industry without
30
PDF Page 32
immense amounts of capital, even if a business only plans to hold a single dollar on behalf of a
third party.
114.MTLs are an inappropriate manner in which to regulate money transmission in the
modern age. Today and for the foreseeable future, nationwide internet access and ubiquitous
mobile device usage combine to make it difficult, and at times impossible, to determine the true
physical location of a consumer wishing to pay for goods or services, constituting an
unreasonable and unnecessary burden on money transmitters that serves no consumer protection
or other purpose.
115.The local benefits of the MTLs, namely, protection of local consumers, are
practically zero, or negative given the local costs. Only registered MTLs that can afford to meet
the high financial burden of applying are covered by surety bonds, leaving the businesses posing
the highest risk to consumers, meaning those that are unregistered, completely uninsured.
Therefore, even with MTLs in place, consumers are still at risk if they happen to pick the
“wrong” money transmitter. Simultaneously, those money transmitters that are available in the
marketplace are more likely to be one of a handful of companies that can afford to meet the
requirements of all MTLs nationwide, leading to higher prices for consumers. In practice, the
MTLs as they are currently structured give consumers a choice between being scammed by
unlicensed thieves, or gouged by conglomerates wielding monopoly power.
116.The enormous size of each corporate entity possessing nationwide MTL licenses
dwarfs the protective ability of each surety bond, which would yield mere pennies on the dollar
in the event of a default. The MTLs are therefore not justified by any valid public welfare,
consumer protection, or pro-competitive purpose unrelated to economic protectionism.
117.Defendants are purporting to act within the scope of their authority under state law in
enforcing and implementing the MTLs.
31
PDF Page 33
118.The notion that each state’s currency might be valued differently was anticipated and
explicitly discouraged by the country’s founding fathers. In Federalist Paper No. 44, James
Madison wrote (emphasis added):
In addition to these persuasive considerations, it may be observed, that the same reasons
which show the necessity of denying to the States the power of regulating coin, prove with
equal force that they ought not to be at liberty to substitute a paper medium in the place of
coin. Had every State a right to regulate the value of its coin, there might be as many
different currencies as States, and thus the intercourse among them would be impeded;
retrospective alterations in its value might be made, and thus the citizens of other States be
injured, and animosities be kindled among the States themselves. The subjects of foreign
powers might suffer from the same cause, and hence the Union be discredited and embroiled
by the indiscretion of a single member. No one of these mischiefs is less incident to a power
in the States to emit paper money, than to coin gold or silver. The power to make any thing
but gold and silver a tender in payment of debts, is withdrawn from the States, on the same
principle with that of issuing a paper currency.
The wide discrepancies between the various requirements for money transmission licenses in
each state are clearly tantamount to each state’s ability to regulate the value of its own coin.
119.The combined net effect of the MTA and all MTLs is one of the states regulating
interstate commerce. With all such laws exempting banks from regulation, and banks lacking
any competitive downward pressure on pricing for money transmission services, consumers and
merchants suffer the consequences. Banks have therefore enjoyed a near-monopoly on payment
services within the United States, while less-risky money transmission services, which do not
make loans, have only been able to qualify for all of the licenses necessary to operate nationwide
on the rarest of occasions.
120.Defendants are liable to Plaintiff for proper redress under 42 U.S.C. § 1983 because
the MTLs deprive Plaintiff of the rights, privileges, and immunities secured by the Commerce
Clause of the United States Constitution.
121.Plaintiff has no adequate remedy at law.
RELIEF REQUESTED
WHEREFORE, Plaintiff respectfully requests the following relief:
32
PDF Page 34
A. A declaratory judgment stating that the MTLs, including the 2010 California Money
Transmission Act, violate the United States Constitution and are unenforceable;
B. A preliminary and permanent injunction enjoining the Defendants from implementing or
enforcing the MTLs, including the 2010 California Money Transmission Act;
C. Monetary damages in the amount of $25,000,000.00 for infringing upon Plaintiff’s exercise
of its ability to conduct interstate commerce, and for effecting the loss of Plaintiff’s entire
business, and for causing irreparable harm to Plaintiff’s brand, reputation and future
prospects;
D. General damages according to proof;
E. Special damages according to proof;
F. Punitive damages against Defendant Venchiarutti;
G. Plaintiff’s reasonable costs and expenses of this action, including attorneys’ fees, in
accordance with 42 U.S.C. § 1988 and other applicable law;
H. Such other and further relief as the Court deems just and proper.
DEMAND FOR JURY TRIAL
Pursuant to Federal Rule of Civil Procedure 38(b), Plaintiff demand a trial by jury in this
action of all issues so triable.
th
Respectfully submitted this 14 day of November, 2011.
Aaron Greenspan
Think Computer Corporation
3260 Hillview Avenue
Palo Alto, CA 94304-1226
Phone: +1 415 670 9350
Fax: +1 415 373 3959
E-Mail: legal@thinkcomputer.com
33
PDF Page 35
SCHEDULE A
Complaints Filed with the California DFI Regarding Unlicensed Money Transmitters
October 19, 2011
1.
2.
3.
4.
Academy of Art University
Pomona College
Stanford University
University of Southern California
October 26, 2011
5. Airbnb, Inc.
6. Facebook, Inc.
November 2, 2011
7. CheckPoint HR
8. Cimbal, Inc.
9. CompuPay, Inc.
10. Corduro, Inc.
11. Corporate Payroll Services
12. Dwolla, Inc.
13. Fidelity HR Services
14. GTM Payroll Services, Inc.
15. Interlogic Outsourcing, Inc.
16. Loyola Marymount University
17. Mobibucks
18. Netchex
19. Occidental College
20. Padgett Payroll Services
21. Paychex, Inc.
22. Paycom Payroll
23. PayCycle, Inc.
24. Paylocity Corporation
25. Paypro Corporation
26. Payroll People, Inc.
27. Santa Clara University
28. Sprint Nextel Corporation
29. TimePlus Payroll Services
30. University of San Diego
31. Verizon Communications, Inc.
32. Zaarly, Inc.
November 7, 2011
33. Clover Network, Inc.
34
PDF Page 36
SCHEDULE B
Money Transmission Laws (MTLs) and Related Contacts
Alabama Administrative Code, Chapter 830-X-7: Sale of Checks Act
JOSEPH P. BORG
Director, Alabama Securities Commission
State of Alabama
401 Adams Ave
Suite 280
Montgomery, AL 36104
ROBERT BENTLEY
Governor
State of Alabama
600 Dexter Avenue
Montgomery, AL 36130
LUTHER STRANGE
Attorney General
State of Alabama
501 Washington Avenue
Montgomery, AL 36104
Alaska Statutes, Chapter 06.55: Alaska Uniform Money Services Act
LORIE L. HOVANEC
Division Director, Department of Commerce, Community, and Economic Development,
Division of Banking and Securities
State of Alaska
550 West Seventh Avenue
Suite 1940
Anchorage, AK 99501
SEAN PARNELL
Governor
State of Alaska
Alaska State Capitol Building
Third Floor
Juneau, AK 99801
JOHN BURNS
Attorney General
State of Alaska
th
1031 W. 4 Avenue
Suite 200
Anchorage, AK 99501-1994
35
PDF Page 37
Arizona Revised Statues, Chapter 12, Article 1, 6-1201 to 6-1218: Transmitters of Money
LAUREN W. KINGRY
Director, Department of Financial Institutions
State of Arizona
2910 N. 44th Street
Suite 310
Phoenix, AZ 85018
JAN BREWER
Governor
State of Arizona
Executive Tower
1700 West Washington Street
Phoenix, AZ 85007
TOM HOME
Attorney General
State of Arizona
1275 West Washington Street
Phoenix, AZ 85007-2926
Arkansas Uniform Money Services Act
A. HEATH ABSHURE
Commissioner, Arkansas Securities Department
State of Arkansas
Heritage West Building, Suite 300
201 East Markham Street
Little Rock, AR 72201-1692
MIKE BEEBE
Governor
State of Arkansas
State Capitol Room 250
Little Rock, AR 72201
DUSTIN MCDANIEL
Attorney General
State of Arkansas
323 Center Street
Suite 200
Little Rock, AR 72201
California Financial Code, Chapter 14, Section 1800 – 1872: Money Transmission Act
TRACI STEVENS
Acting Secretary, Business, Transportation and Housing Agency
36
PDF Page 38
State of California
980 9th Street
Suite 2450
Sacramento, CA 95814-2719
WILLIAM HARAF
Commissioner, Department of Financial Institutions
State of California
45 Fremont Street
Suite 1700
San Francisco, CA 94105-2219
ROBERT VENCHIARUTTI
Deputy Commissioner, Department of Financial Institutions
State of California
45 Fremont Street
Suite 1700
San Francisco, CA 94105-2219
EDMUND G. BROWN, JR.
Governor
State of California
State Capitol
Suite 1173
Sacramento, CA 95814
JACOB A. APPELSMITH
Senior Advisor to the Governor
State of California
3927 Lennane Drive
Suite 100
Sacramento, CA 95834
KAMALA HARRIS
Attorney General
State of California
1300 "I" Street
Sacramento, CA 95814-2919
Colorado Title 12, Article 52: Money Transmitters Act
FRED J. JOSEPH
Banking and Securities Commissioner, Department of Regulatory Agencies Division of Banking
State of Colorado
1560 Broadway
Suite 900
Denver, CO 80202
37
PDF Page 39
JOHN HICKENLOOPER
Governor
State of Colorado
136 State Capitol
Denver, CO 80203-1792
JOHN SUTHERS
Attorney General
State of Colorado
1525 Sherman Street
Denver, CO 80203
Connecticut Laws, Chapter 668, Part V: Money Transmission Act
HOWARD F. PITKIN
Commissioner, Department of Banking
State of Connecticut
260 Constitution Plaza
Hartford, CT 06103-1800
DANNEL MALLOY
Governor
State of Connecticut
State Capitol
210 Capitol Avenue
Hartford, CT 06106
GEORGE JEPSEN
Attorney General
State of Connecticut
55 Elm Street
Hartford, CT 06106
Delaware Code, Title 5, Chapter 23: The Sale of Checks Act
ROBERT A. GLEN
State Bank Commissioner, Office of the State Bank Commissioner
State of Delaware
555 East Loockerman Street
Suite 210
Dover, DE 19901
JACK MARKELL
Governor
State of Delaware
Tatnall Building
William Penn Street, 2nd Floor
Dover, DE 19901
38
PDF Page 40
BEAU BIDEN
Attorney General
State of Delaware
102 W. Water Street
Dover, DE 19904
Florida Administrative Code, Chapter 69V-560: Money Transmitters
TERRY STRAUB
Director, Division of Finance, Office of Financial Regulation
State of Florida
200 E. Gaines Street
Tallahassee, FL 32399-0376
RICK SCOTT
Governor
State of Florida
The Capitol
400 S. Monroe Street
Tallahassee, FL 32399-0001
PAM BONDI
Attorney General
State of Florida
The Capitol PL-01
Tallahassee, FL 32399-1050
Georgia Code, Title 7, Chapter 1, Article 4: Sale of Checks or Money Orders
ROB BRASWELL
Commissioner, Department of Banking and Finance
State of Georgia
2990 Brandywine Road
Suite 200
Atlanta, GA 30341-5565
NATHAN DEAL
Governor
State of Georgia
203 State Capitol
Atlanta, GA 30334
SAM OLENS
Attorney General
State of Georgia
40 Capitol Square, SW
Atlanta, GA 30334
39
PDF Page 41
Hawaii Revised Statutes, Chapter 489D: Money Transmitters Act
IRIS IKEDA CATALANI
Commissioner, Department of Commerce & Consumer Affairs, Division of Financial Institutions
State of Hawaii
King Kalakaua Building
335 Merchant Street, Room 221
Honolulu, HI 96813
NEIL ABERCROMBIE
Govenor
State of Hawaii
Executive Chambers
State Capitol
Honolulu, HI 96813
DAVID M. LOUIE
Attorney General
State of Hawaii
425 Queen Street
Honolulu, HI 96813
Idaho Statutes, Chapter 26, Title 29: Idaho Money Transmitters Act
GAVIN M. GEE
Director, Idaho Department of Finance
State of Idaho
800 Park Boulevard
Suite 200
Boise, ID 83712
BUTCH OTTER
Governor
State of Idaho
700 W. Jefferson Street
Boise, ID 83702
LAWRENCE WASDEN
Attorney General
State of Idaho
700 W. Jefferson Street
Suite 210
Boise, ID 83702
Illinois Compiled Statutes, 205 ILCS 657/1: The Transmitters of Money Act
ROBERT E. MEZA
40
PDF Page 42
Division Director, Department of Financial & Professional Regulation, Division of Financial
Institutions
State of Illinois
320 West Washington Street
Springfield, IL 62786
PAT QUINN
Governor
State of Illinois
207 State House
Springfield, IL 62706
LISA MADIGAN
Attorney General
State of Illinois
500 South Second Street
Springfield, IL 62706
Indiana Code, Title 28, Chapter 4: Money Transmitters
RICHARD J. RICE
Chairman, Department of Financial Institutions
State of Indiana
30 South Meridian Street
Suite 300
Indianapolis, IN 46204
MITCH DANIELS
Governor
State of Indiana
Statehouse
Indianapolis, IN 46204-2797
GREG ZOELLER
Attorney General
State of Indiana
302 W. Washington Street
5th Floor
Indianapolis, IN 46204
Iowa Uniform Money Services Act
JAMES M. SCHIPPER
Superintendent, Division of Banking
State of Iowa
200 East Grand Avenue
Suite 300
Des Moines, IA 50309
41
PDF Page 43
TERRY BRANSTAD
Governor
State of Iowa
1007 East Grand Avenue
Des Moines, IA 50319
THOMAS JOHN MILLER
Attorney General
State of Iowa
1305 E. Walnut Street
Des Moines, IA 50319
Kansas Banking Law, Chapter 9, Article 5: Miscellaneous Provisions
ED SPLICHAL
Office of the State Bank Commissioner
State of Kansas
700 Jackson
Suite 300
Topeka, KS 66603
SAM BROWNBACK
Governor
State of Kansas
300 SW 10th Street
Topeka, KS 66612
DEREK SCHMIDT
Attorney General
State of Kansas
Memorial Hall, 2nd Floor
120 SW 10th Street
Topeka, KS 66612
Kentucky Revised Statutes, Chapter 286.11: Kentucky Money Transmitters Act of 2006
CHARLES A. VICE
Commissioner, Department of Financial Institutions
State of Kentucky
1025 Capital Center Drive
Suite 200
Frankfort, KY 40601
STEVE BESHEAR
Governor
State of Kentucky
700 Capitol Avenue
42
PDF Page 44
Suite 100
Frankfort, KY 40601
JACK CONWAY
Attorney General
State of Kentucky
700 Capitol Avenue
Suite 118
Frankfort, KY 40601-3449
Louisiana Statutes, Title 6, Chapter 13: The Sale of Checks and Money Transmission Act
JOHN DUCREST
Commissioner, Office of Financial Institutions
State of Lousiana
8660 United Plaza Boulevard
Second Floor
Baton Rouge, LA 70809-7024
BOBBY JINDAL
Governor
State of Louisiana
900 North 3rd Street
Baton Rouge, LA 70802
BUDDY CALDWELL
Attorney General
State of Louisiana
1885 North 3rd Street
6th Floor
Baton Rouge, LA 70802
Maine Laws, Title 32, Chapter 80, Subchapter 1: Money Transmitters Act
WILLIAM N. LUND
Superintendent, Department of Professional & Financial Regulation, Bureau of Consumer Credit
Protection
State of Maine
35 State House Station
Augusta, ME 04333
PAUL LEPAGE
Governor
State of Maine
1 State House Station
Augusta, ME 04333-0001
43
PDF Page 45
WILLIAM SCHNEIDER
Attorney General
State of Maine
6 State House Station
Augusta, ME 04333
Maryland Money Transmitters Act
MARK KAUFMAN
Commissioner, Division of Financial Regulation
State of Maryland
500 North Calvert Street
Suite 402
Baltimore, MD 21202
MARTIN O’MALLEY
Governor
State of Maryland
100 State Circle
Annapolis, MD 21401
DOUG GANSLER
Attorney General
State of Maryland
200 St. Paul Place
Baltimore, MD 21202
Michigan Compiled Laws, Section 487: Money Transmission Services Act
KEVIN CLINTON
Department of Licensing and Regulatory Affairs, Office of Finance and Insurance Regulation
State of Michigan
611 W Ottawa St
rd
3 Floor
Lansing, MI 48933-1070
RICK SNYDER
Governor
State of Michigan
George W. Romney Building
111 South Capitol Avenue
Lansing, MI 48909
BILL SCHUETTE
Attorney General
State of Michigan
G. Mennen Williams Building
7th Floor
525 W. Ottawa Street
44
PDF Page 46
Lansing, MI 48909
Minnesota Money Transmitters Act
MICHAEL ROTHMAN
Department of Commerce
State of Minnesota
85 7th Place East
Suite 500
St. Paul, MN 55101
MARK DAYTON
Govenor
State of Minnesota
130 State Capitol
75 Rev. Dr. Martin Luther King Jr. Boulevard
St. Paul, MN 55155
LORI SWANSON
Attorney General
State of Minnesota
1400 Bremer Tower
445 Minnesota Street
St. Paul, MN 55101
Mississippi Sale of Checks Act
THERESA BRASDY
Commissioner, Department of Banking and Consumer Finance
State of Mississippi
Woolfolk State Office Building
501 N. West Street
9th Floor, Suite A
Jackson, MS 39201
HALEY BARBOUR
Governor
State of Mississippi
400 High Street
Jackson, MS 39201
JIM HOOD
Attorney General
State of Mississippi
Walter Sillers Building
550 High Street
Suite 1200
Jackson, MS 39201
45
PDF Page 47
Missouri Sale of Checks Law
RICHARD J. WEAVER
Commissioner of Finance, Division of Finance
State of Missouri
Truman State Office Building
Room 630
Jefferson City, MO 65102
JAY NIXON
Governor
State of Missouri
201 W. Capitol Avenue
Suite 216
Jefferson City, MO 65101-1590
CHRIS KOSTER
Attorney General
State of Missouri
Supreme Court Building
207 W. High Street
Jefferson City, MO 65102
Nebraska Revised Statutes, Chapter 8, Article 10: Sale of Checks and Funds Transmission Act
JOHN MUNN
Director, Department of Banking and Finance
State of Nebraska
Commerce Court
1230 'O' Street, Suite 400
Lincoln, NE 68508-1402
DAVE HEINEMAN
Governor
State of Nebraska
1445 K Street
Suite 2316
Lincoln, NE 68508
JON BRUNING
Attorney General
State of Nebraska
2115 State Capitol
Lincoln, NE 68509
Nevada Revised Statutes, Chapter 671: Issuers Of Instruments For Transmission Or Payment Of
Money
46
PDF Page 48
TERRY JOHNSON
Director, Department of Business and Industry, Division of Financial Institutions
State of Nevada
2785 E. Desert Inn Road
Las Vegas, NV 89121
BRIAN SANDOVAL
Governor
State of Nevada
State Capitol Building
101 N. Carson Street
Carson City, NV 89701
CATHERINE CORTEZ MASTO
Attorney General
State of Nevada
100 North Carson Street
Carson City, NV 89701-4717
New Hampshire Revised Statutes, Chapter 399-G: Licensing of Money Transmitters
RONALD A. WILBUR
Commissioner, Banking Department
State of New Hampshire
53 Regional Drive
Suite 200
Concord, NH 03301
JOHN LYNCH
Governor
State of New Hampshire
State House
107 North Main Street
Concord, NH 03301
MICHAEL DELANEY
Attorney General
State of New Hampshire
33 Capitol Street
Concord, NH 03301
New Jersey Statutes, Title 17, Chapter 15C: New Jersey Money Transmitters Act
THOMAS B. CONSIDINE
Department of Banking and Insurance
State of New Jersey
20 West State Street
PO Box 325
47
PDF Page 49
Trenton, NJ 08625
CHRIS CHRISTIE
Governor
State of New Jersey
125 West State Street
Trenton, NJ 08625
PAULA DOW
Attorney General
State of New Jersey
Richard J. Hughes Justice Complex
25 Market Street
Trenton, NJ 08625
New York Banking Law, Article 13-B, Sections 640 - 652-B: Transmitters of Money
BENJAMIN M. LAWSKY
Department of Financial Services
State of New York
One State Street
New York, NY 10004-1511
ANDREW CUOMO
Governor
State of New York
State Capitol Building
Albany, NY 12224
ERIC SCHNEIDERMAN
Attorney General
State of New York
State Capitol Building
nd
2 Floor
Albany, NY 12224
North Carolina
JOSEPH A. SMITH, JR.
Commissioner of Banks
State of North Carolina
316 W. Edenton Street
Raleigh, NC 27603
BEVERLY PURDUE
Governor
State of North Carolina
20301 Mail Service Center
48
PDF Page 50
Raleigh, NC 27699-0301
ROY A. COOPER
Attorney General
State of North Carolina
9001 Mail Service Center
Raleigh, NC 27699-9001
North Dakota Money Transmitters Law
ROBERT J. ENTRINGER
Department of Financial Institutions
State of North Dakota
2000 Schafer Street
Suite G
Bismarck, ND 58501-1204
JACK DALRYMPLE
Governor
State of North Dakota
600 East Boulevard Avenue
Bismarck, ND 58505-0100
WAYNE STENEHJEM
Attorney General
State of North Dakota
600 E. Boulevard Avenue
Dept. 125
Bismarck, ND 58505
Ohio Revised Code, Chapter 1315: Transmitters Of Money; Check-Cashing Businesses
CHARLES J. DOLEZAL
Superintendent, Division of Financial Institutions
State of Ohio
77 South High Street, 21st Floor
Columbus, OH 43215-6120
JOHN KASICH
Governor
State of Ohio
Riffe Center
30th Floor
77 South High Street
Columbus, OH 43215-6117
MIKE DEWINE
Attorney General
49
PDF Page 51
State of Ohio
30 E. Broad Street
14th Floor
Columbus, OH 43215
Oklahoma Financial Transaction Reporting Act
MICK THOMPSON
Commissioner, Banking Department
State of Oklahoma
2900 North Lincoln Boulevard
Oklahoma City, OK 73105
MARY FALLIN
Governor
State of Oklahoma
State Capitol
2300 N. Lincoln Boulevard
Room 212
Oklahoma City, OK 73105
SCOTT PRUITT
Attorney General
State of Oklahoma
313 NE 21st Street
Oklahoma City, OK 73105
Oregon Money Transmitter Act
DAIVD C. TATMAN
Administrator, Department of Consumer & Business Services, Division of Finance and
Corporate Securities
State of Oregon
350 Winter St. NE
Room 410
Salem, OR 97301-3881
JOHN KITZHABER
Governor
State of Oregon
160 State Capitol
900 Court Street
Salem, Oregon 97301-4047
JOHN KROGER
Attorney General
State of Oregon
Oregon Department of Justice
50
PDF Page 52
1162 Court Street NE
Salem, OR 97301-4096
Pennsylvania Transmitting Money Act
GLENN E. MOYER
Secretary of Banking, Department of Banking
State of Pennsylvania
17 N Second Street
Suite 1300
Harrisburg, PA 17101-2290
TOM CORBETT
Governor
State of Pennsylvania
225 Main Capitol Building
Harrisburg, PA 17120
WILLIAM H. RYAN, JR.
Attorney General
State of Pennsylvania
Strawberry Square
16th Floor
Harrisburg, PA 17120
Rhode Island
PAUL MCGREEVY
Department of Business Regulation, Division of Banking & Securities Regulation
State of Rhode Island
1511 Pontiac Avenue
Cranston, RI 02920
LINCOLN D. CHAFEE
Governor
State of Rhode Island
222 State House
Providence, RI 02903
PETER KILMARTIN
Attorney General
State of Rhode Island
150 South Main Street
Providence, RI 02903
South Dakota Money Transmitter Act
51
PDF Page 53
BRET AFDAHL
Director, Department of Labor and Regulation, Division of Banking
State of South Dakota
27 ½ West Missouri Avenue
Pierre, SD 57501
DENNIS DAUGAARD
Governor
State of South Dakota
500 E Capitol Avenue
Pierre, SD 57501
MARTY JACKLEY
Attorney General
State of South Dakota
1302 E. Highway 14
Suite 1
Pierre, SD 57501-8501
Tennessee Money Transmission Law
GREG GONZALES
Commissioner, Department of Financial Institutions
State of Tennessee
414 Union Street
Suite 1000
Nashville, TN 37219
BILL HASLAM
Governor
State of Tennessee
State Capitol
st
1 Floor
Nashville, TN 37243
ROBERT E. COOPER, JR.
Attorney General
State of Tennessee
425 5th Avenue N.
Suite 2
Nashville, TN 37243-3400
Texas Money Services Business Law
CHARLES G. COOPER
Commissioner, Department of Banking
State of Texas
2601 N. Lamar Blvd
52
PDF Page 54
Austin, TX 78705
RICK PERRY
Governor
State of Texas
1100 San Jacinto
Austin, TX 78701
GREG ABBOTT
Attorney General
State of Texas
300 W. 15th Street
Austin, TX 78701
Utah Financial Institutions Law
G. EDWARD LEARY
Commissioner, Department of Financial Institutions
State of Utah
324 South State Street
Suite 201
Salt Lake City, UT 84111
GARY HERBERT
Governor
State of Utah
Utah State Capitol Complex
350 North State Street
Suite 200
Salt Lake City, UT 84114-2220
MARK SHURTLEFF
Attorney General
State of Utah
Utah State Capitol Complex
350 North State Street
Suite 230
Salt Lake City, UT 84114-2320
Vermont Statutes Annotated, Title 8, Chapter 79: Money Services Act
STEVE KIMBELL
Department of Banking, Insurance, Securities and Health Care Administration
State of Vermont
89 Main Street
Montpelier, VT 05620-3101
53
PDF Page 55
PETER SHUMLIN
Governor
State of Vermont
109 State Street
Pavilion
Montpelier, VT 05609
WILLIAM SORRELL
Attorney General
State of Vermont
109 State Street
Montpelier, VT 05609-1001
Virginia Code, Title 6.2, Chapter 19: Money Order Sellers and Money Transmitters
E. JOSEPH FACE, JR.
Commissioner, State Corporation Commission, Bureau of Financial Institutions
Commonwealth of Virginia
Tyler Building
th
8 Floor
1300 E. Main Street
Richmond, VA 23219
BOB MCDONNELL
Governor
Commonwealth of Virginia
Patrick Henry Building
3rd Floor
1111 East Broad Street
Richmond, VA 23219
KEN CUCCINELLI
Attorney General
Commonwealth of Virginia
900 East Main Street
Richmond, VA 23219
Washington, Chapter 19.230 RCW: Uniform Money Services Act
SCOTT JARVIS
Director, Department of Financial Institutions
State of Washington
150 Israel Road SW
Tumwater, WA 98501
CHRISTINE GREGOIRE
Governor
State of Washington
54
PDF Page 56
416 Sid Snyder Avenue SW
Suite 200
Olympia, WA 98504
ROB MCKENNA
Attorney General
State of Washington
1125 Washington Street SE
Olympia, WA 98504
Washington, D.C. Money Transmitters Law
ALBERT L. ELDER III
Interim Commissioner, Department of Banking and Financial Institutions
District of Columbia
1400 L Street, NW
Suite 400
Washington, DC 20005
VINCENT GRAY
Mayor
District of Columbia
1350 Pennsylvania Avenue, NW
Suite 316
Washington, DC 20004
IRVIN B. NATHAN
Attorney General
District of Columbia
441 4th Street, NW
Washington, DC 20001
West Virginia Issuance and Sale of Checks, Drafts and Money Orders Act
SARA M. CLINE
Commissioner, Division of Banking
State of West Virginia
One Players Club Drive
Suite 300
Charleston, WV 25311-1638
EARL RAY TOMBLIN
Governor
State of West Virginia
State Capitol
1900 Kanawha Boulevard, East
Charleston, WV 25305
55
PDF Page 57
DARRELL MCGRAW
Attorney General
State of West Virginia
State Capitol
Building 1, Room E-26
Charleston, WV 25305
Wisconsin
PETER BILDSTEN
Secretary, Department of Financial Institutions
State of Wisconsin
345 W Washington Avenue
Madison, WI 53703
SCOTT WALKER
Governor
State of Wisconsin
115 East State Capitol
Madison, WI 53702
J. B. VAN HOLLEN
Attorney General
State of Wisconsin
114 East State Capitol
Madison, WI 53702-7857
Wyoming Money Transmitter Act
JEFFREY C. VOGEL
Commissioner, Division of Banking
State of Wyoming
rd
Herschler Building, 3 Floor East
122 West 25th Street
Cheyenne, WY 82002
MATT MEAD
Governor
State of Wyoming
State Capitol
200 West 24th Street
Cheyenne, WY 82002-0010
GREGORY A. PHILLIPS
Attorney General
State of Wyoming
123 Capitol Building
200 W. 24th Street
56
PDF Page 58
Cheyenne, WY 82002
57
PDF Page 59
CERTIFICATE OF MAILING AND SERVICE
I certify that on November 14, 2011, a true copy of the foregoing COMPLAINT FOR
DECLARATORY AND INJUNCTIVE RELIEF AND JURY DEMAND is being served via
USPS Certified Mail and electronic mail to the following addresses:
TRACI STEVENS
Acting Secretary, Business, Transportation
and Housing Agency
State of California
980 9th Street
Suite 2450
Sacramento, CA 95814-2719
traci.stevens@bth.ca.gov
EDMUND G. BROWN, JR.
Governor
State of California
State Capitol
Suite 1173
Sacramento, CA 95814
nancy.mcfadden@gov.ca.gov
jim.humes@gov.ca.gov
WILLIAM HARAF
Commissioner, Department of Financial
Institutions
State of California
45 Fremont Street
Suite 1700
San Francisco, CA 94105-2219
william.haraf@dfi.ca.gov
JACOB A. APPELSMITH
Senior Advisor to the Governor
State of California
3927 Lennane Drive
Suite 100
Sacramento, CA 95834
jacob.appelsmith@abc.ca.gov
ROBERT VENCHIARUTTI
Deputy Commissioner, Department of
Financial Institutions
State of California
45 Fremont Street
Suite 1700
San Francisco, CA 94105-2219
rvenchiarutti@dfi.ca.gov
KAMALA HARRIS
Attorney General
State of California
1300 "I" Street
Sacramento, CA 95814-2919
kamala.harris@ag.ca.gov
By
Aaron Greenspan
President & CEO
Think Computer Corporation
3260 Hillview Avenue
Palo Alto, CA 94304-1226
legal@thinkcomputer.com
58
Third party AI contribution in government documents
Possible
Document content is reproduced directly from government sources. Think Computer Corporation does not generate, alter, annotate, or summarize documents using artificial intelligence. Some filings in our database may themselves contain AI-generated content submitted by third parties to government agencies.
Back to 
