Court Moves Navy Federal & Wells Fargo $3.6 Million Lawsuit to Mediation

A federal mediator for the U.S. Court of Appeals for the Fourth Circuit in Virginia is exploring any potential opportunities to settle a lawsuit involving Navy Federal Credit Union and Wells Fargo, and a highly decorated retired veteran who was swindled out of $3.6 million before he died.

Janine Williamson of Tacoma, Wash., who is the administrator of the estate of the late U.S. Navy Commander Larry W. Cook, sued Navy Federal and Wells Fargo for negligence. In May, U.S. District Court Judge Claude M. Hilton in Alexandria, Va., threw out her lawsuit after Navy Federal and Wells Fargo filed motions to dismiss the case, which attracted national media attention.

In June, Williamson (whose previous last name was Satterfield) filed a motion based on new evidence and other legal grounds, which sought to reinstate the lawsuit so that it can be heard and decided by a jury. In August, however, Judge Hilton denied that motion, which Williamson is appealing.

The Appeals Court moved the case to the Office of the Circuit Mediator as required by a federal rule that all civil and agency cases are first reviewed by a mediator to resolve procedural issues to prevent unnecessary motions or delays, to clarify the main issues of the appeal and to determine any potential for a settlement.

The first mediation session was held on Oct. 27, but there was no settlement reached.

“Both sides are at an impasse,” Williamson said in a prepared statement.

A second mediation session is scheduled for Nov. 27.

“Our members are always our first priority, and we handle all member transactions with great care,” a Navy Federal spokesperson said. “Out of respect for the jurisdiction of the court, we have no further comment.”

Wells Fargo’s lawyers did not respond to CU Times‘ request for comment.

The multimillion-dollar fraud scheme that victimized Cook began on Oct. 6, 2020 and lasted up to April 20, 2021, the day before his death at age 76. In just six months, the retired nuclear submarine commander and a member of the $168 billion Navy Federal since the 1970s, sent 75 international wire transfers totaling $3,608,700 to unknown persons at two banks in Thailand. One wire was sent through Wells Fargo. For an unknown reason, the bank declined to send Cmdr. Cook’s second international wire. Most of the wire transfers were in the amount of $49,500 because any amount above that would have been required to be reported to Thailand’s government.

Williamson’s four legal claims were dismissed in her lawsuit, including her key negligence allegation. She claimed Navy Federal failed to protect the veteran even after the credit union reported him to Fairfax County Adult Protective Services (APS) because the international wires indicated possible elder financial exploitation.

But Judge Hilton agreed with arguments made by Navy Federal attorneys that Virginia’s Uniform Commercial Code does not impose an obligation on the credit union to have shielded Cook from the criminal conduct of third-party scammers or to have refused to process the transactions he directed the credit union to initiate merely because it had a concern the circumstances were suspicious.

Williamson’s filings with the Appeals Court, however, indicated her lawyers intend to argue several legal issues, including whether the Virginia Uniform Commercial Code covers the transactions involved in this case and whether the district court should have reopened the case to allow the introduction of new evidence that surfaced after widespread media coverage of the case.

That new evidence included an affidavit of Sean C. Gray, a former employee of APS who worked with Navy Federal on the Cook case. Gray said after speaking with Cook he believed that the military veteran did not seem to understand what was going on because he was unable to say what the wire transfers were for or even identify the people who received the wire transfers.

Although Gray said he informed Navy Federal that it was his belief that Cook was incapacitated, the credit union’s lawyers dismissed the new evidence arguing Gray’s affidavit contains improper opinion evidence and lacks foundation.