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Archive for the ‘Wachovia’ Category
Sigh: Reading Retention Anyone? (Wachovia, Money and Drugs)
April 3rd, 2011 | 
Author:
From The Guardian:
On 10 April 2006, a DC-9 jet landed in the port city of Ciudad del Carmen, on the Gulf of Mexico, as the sun was setting. Mexican soldiers, waiting to intercept it, found 128 cases packed with 5.7 tons of cocaine, valued at $100m. But something else – more important and far-reaching – was discovered in the paper trail behind the purchase of the plane by the Sinaloa narco-trafficking cartel.
During a 22-month investigation by agents from the US Drug Enforcement Administration, the Internal Revenue Service and others, it emerged that the cocaine smugglers had bought the plane with money they had laundered through one of the biggest banks in the United States: Wachovia, now part of the giant Wells Fargo.
I’ve gotten at least a dozen emails over the last couple of days frantically asking me to cover this story. Naked Capitalism said:
If this news story does not prove that banks are effectively above the law, I don’t know what does. The Guardian, in an account yet to be picked up anywhere in the US media (per Google News as of this posting, hat tip readers May S and Swedish Lex) reports that Wachovia was at the heart of one of the world’s biggest money laundering operations, moving $378.4 billion into dollar-based accounts from Mexican casas de cambio, which are currency exchange firms. While these transfers took place over a period of years, the article notes that it equals 1/3 of Mexican GDP. And the resolution?
Oh really? Not picked up anywhere in the United States eh?
Shall we set the wayback machine?
Gee, it’s not enough to steal from ordinary Americans, it’s not enough to rip off state and city governments, it’s not enough to rig bids in the municipal bond markets, we must sit still while these institutions literally make possible funding criminal gangs that are committing murder.
There’s a name for this folks.
Dateline: The Market Ticker, June 29th, 2010
The Market Ticker did cover this story in detail - nearly a year ago.
The real question is why this wasn’t picked up by everyone last year, why it wasn’t run into the ground, and why only now, when the deferred prosecution agreement expired, are people talking about it.
That’s right – now the media will cover it, including The Guardian!
Mish covered this story in July, incidentally, so it wasn’t like The Market Ticker was the only site that was talking about it.
I have one question for everyone, and it’s a really important question that bears on exactly how we have gotten to be where we are – that is, where “certain special people and institutions” can do damn near anything they want – law or no law:
How’d we get beyond the deferred prosecution boundary before all these supposed journalists “discovered” this story, when in fact not only did I report on it nearly a year ago but so did a few others. Now we have people profess, for the first time, to see that this is “proof that banks are effectively above the law.”
Wouldn’t the below have been an interesting question for Yves to ask Timmy Geither during her audience at Treasury in August of 2010 - with many other bloggers present?
“How do you defend not attempt to convict Wachovia or any of the bank officers for alleged money laundering on behalf of Mexican drug cartels in the amount of nearly $400 billion – money that we know was used, directly and indirectly, to slaughter both Mexican citizens and Americans? In what form or fashion is it in the public interest to not only allow a tiny fine of less than one tenth of one percent of the loot so-transferred to be paid but to refuse to criminally try the institution and every officer and employee involved in this offense?“
Now that would have been worth being a fly on the wall for.
Of course you wouldn’t exactly make the Christmas list if you asked such a question, and you might not have been invited at all had you ran the story and asked this question before hand…. right?
PS: I’d still like to see that question asked. Hell will freeze first.
Posted in Banks, Corruption, Debt, Economic Crisis, Economy, Financial System, Fraud, Government, Mexico, Money, Wachovia, Wells Fargo | 
Tags: Crime, Drug Cartels, Naked Capitalism, Timothy Geithner, Yves Smith | 
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Bank of America, Wachovia Employees Received Up to $55,000 in Bribes
The newest twist in a long-running federal mortgage fraud case was revealed Thursday as a “Bank Bribery Scheme,” in which prosecutors said three Bank of America or Wachovia employees pulled in bribes of as much as $55,000.
Federal prosecutors announced the scheme as they unsealed indictments against 10 more defendants in the serpentine case, part of a broader federal crackdown on mortgage fraud.
The nationwide “Operation Stolen Dreams” has involved 1,215 criminal defendants, including 485 arrests, officials said Thursday in Washington. Losses are estimated at more than $2.3 billion.
The FBI is working more than 3,000 mortgage fraud cases, almost twice as many as two years ago. Fraud helped fuel the nation’s foreclosure crisis.
“Mortgage fraud ruins lives, destroys families and devastates whole communities…,” Attorney General Eric Holder said.
In Charlotte, prosecutors showcased Operation Wax House, which has now produced charges against 35 people since the first in November 2008.
Of those 35, 25 had previously agreed to plead guilty, including 10 in the last week.
The latest defendants have been indicted, indicating they do not have plea deals.
From the beginning, prosecutors have said the mortgage fraud involved seven pricey subdivisions in Union and Mecklenburg counties. The investigation has touched every step of the mortgage process. Defendants include a real estate agent, an appraiser, a builder, buyers, mortgage brokers and attorneys.
Prosecutors have said the victims were banks that loaned money for the homes.
Thursday’s court documents detail allegations of nearly $11 million in fraudulent deals for eight Waxhaw houses, all forced into foreclosure or distressed sale at a steep loss.
Participants in the fraud agreed to buy homes at one price from builders, arranged buyers at a higher price and then lied to get mortgages at the higher level, according to court documents. Prices were generally inflated by $200,000 to $500,000. At closing, the difference between the two prices was shared by fraud participants.
The deals occurred mainly during 2006 and 2007.
Prosecutors have identified five “cells” of fraudsters. Thursday’s charges involve participants in Cell No. 2.
Each of the 10 is charged with at least one count of bank fraud or bank bribery, each of which carries a maximum prison sentence of 30 years. In addition, each is charged with at least one count of mortgage fraud conspiracy or bank bribery conspiracy, which each call for a maximum sentence of 5 years. Other charges include perjury, identity theft and money laundering.
At least five of the new defendants were connected to the “Bank Bribery Scheme,” which took place from September 2007 through January 2008, the filing said.
In those cases, mortgage fraud participants and unidentified others paid bribes of $4,000 to $55,000 to three bank employees and others for false letters of credit. The documents, typically used by businesses, can be used for such activities as obtaining other financing or guaranteeing payment for goods.
Landrick O.A. McClain, 47 of Silver Spring, Md., is described as the “leader and primary financier” of the scheme. He owned a Washington financial services firm, Credit Risk Re Limited. As of Thursday, an arrest warrant was pending for him.
Ericka L. Flood, also known as Ericka Lomick, 35, of Charlotte, is described as a go-between for McClain, the bank employees and others.
She also is called a promoter in the fraud case and was a mortgage broker for several Charlotte companies. She controlled the Kashmir Group, which was allegedly used to receive money from the scam. For example, in one sale, Kashmir allegedly received $409,000.
Flood, like the bank employees, was released on bond with the condition she not work in the banking, financial services and mortgage industries.
McClain, Flood and unidentified others allegedly paid bribes to the indicted bank employees, who are no longer with the banks. They are:
Jamilia N. Brown, 29, Charlotte. Brown, was an assistant branch manager for Bank of America’s Cotswold branch and allegedly accepted a bribe of $55,000 for a fake letter of credit.
Vic F. Henson, whose maiden name was Vic F. Gray, 41, Charlotte. Henson was a Bank of America branch manager in Charlotte who allegedly participated in both the mortgage fraud and bribery schemes. Henson allegedly received two bribes totaling $38,000. She also arranged to “falsely verify” a deposit for a “fraudulent loan application for a buyer whose identity was stolen” and used to apply for loans, according to documents.
Bonnie S. Ramey, 43, Charlotte. Ramey worked at a Wachovia branch in the Ballantyne area and allegedly accepted a bribe of $9,000 in cash for producing a bogus letter of credit from the bank. The $468.5 million letter of credit was issued “as a guarantee that a Swiss entity would carry out certain contractual obligations in Iceland.” The relation to the mortgage fraud is not explained. The bank couldn’t immediately comment on the alleged transaction.
Anne Tompkins, U.S. attorney for North Carolina’s Western District, which includes Charlotte, noted the wide impact of mortgage fraud and pledged that “investigating and prosecuting these cases will continue to be a top priority for this office.”
Posted in Bank of America, banking fraud, Banks, Corruption, Financial System, Fraud, Mortgage Fraud, Mortgage Loans, Wachovia |
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Can I have a loan and an equity investment to allow me to boost my bonuses to about $20 million?
From Bloomberg, Citigroup Stock Sale Discount Prompts Treasury to Delay Disposal of Stake :
Dec. 17 (Bloomberg) — Citigroup Inc.,
the last of the four largest U.S. banks to seek funds to exit a
taxpayer bailout, raised $17 billion by selling stock for a price so
low that the U.S. delayed plans to shrink its one-third stake in the
lender.Citigroup sold 5.4 billion shares at
$3.15 apiece, less than the $3.25 the government paid when it acquired
its stake in September. The New York-based bank said the Treasury won’t
sell any of its shares for at least 90 days.Investors demanded a bigger discount from Citigroup than Bank of America Corp. or Wells Fargo & Co.,
which together raised more than $31 billion this month to exit the
Troubled Asset Relief Program. Wells Fargo, which trumped Citigroup’s
bid to buy Wachovia Corp. last year, leapfrogged its rival by
completing a $12.25 billion share sale Dec. 15. JPMorgan Chase &
Co. repaid $25 billion in June.“The market cast its vote and they’re low down on the ballot,” said Douglas Ciocca,
a managing director at Renaissance Financial Corp. in Leawood, Kansas.
“Citigroup needs to show steps to reinstall the quality of the brand.”With
the sale, Citigroup’s common shares outstanding increased to 28.3
billion. That’s up from 22.9 billion as of Sept. 30 and 5 billion at
the end of 2007.“More shares outstanding means less value per share,” said Edward Najarian,
an analyst at International Strategy and Investment Group in New York,
who has a “hold” rating on the shares. “The whole structure of their
deal to pay back TARP wasn’t very good for common shareholders and that
is being reflected in the pricing.”
I think
one of the most important points are being missed. Most of these banks
swore that they didn’t need TARP. Despite this, in order to return it,
they must go back out to the capital markets. Why do you have to hit
the market to return a loan that you said you didn’t need, unless you
needed it? This obvious lie has went unchallenged.
It gets
worse. Citi is diluting the hell out of it shareholders, as well as all
of the other TARP banks that are selling shares. Some may even be
taking on debt. They are doing this primarily to gain the freedom to
declare bonuses at higher rates despite uncertain credit condition
surrounding the toxic assets that caused the problem in the first
place. Why in the world would any lender or shareholder agree to
dilution and/or higher debt service “primarily” to pay higher bonuses
to employees in the highest compensated (as a percent of net revenue)
industry in the world???
Imagine if you ran this business, you
have rocky times during a recession with revenues in nearly all aspects
of your business down save the blatant risk taking of trading, and you
go to your bank and say I need a big loan so I can pay myself a $20
million bonus increase.
Do you think Citibank would give you this
loan? They expect it from their shareholders. The same goes for
Goldman, JPM, BAC, etc.
Also from Bloomberg: Weak Banks Should Face Curbs on Bonuses, Dividends, Basel Regulator Says
Dec. 17 (Bloomberg) — Global regulators urged national
authorities to limit bonus and dividend payments by banks with
weakened capital safety nets as part of proposals to reduce
risks to the financial system.Banks should increase the quality of the capital they hold
to cope with losses, the Basel Committee on Banking Supervision
said in a report on bank capital and liquidity published today.
Banks with depleted capital buffers shouldn’t use predictions of
recovery to justify generous dividends to investors and
employees, the committee said.Global regulators have been wrestling with plans to
increase supervision of banks following the worst economic
crisis since World War II. The Group of 20 Nations agreed in
April that banks should be required to hold more and better
quality capital to reduce risks to the financial system.“It’s not acceptable for banks which have depleted their
capital buffers to try and use the distribution of capital as a
way to signal their financial strength,” the committee’s
statement said. “The proposed framework will reduce the
discretion of banks which have depleted their capital buffers to
further reduce them through generous distributions of
earnings.”
It’s amazing that this even needs to be said.
Posted in America, Bailout, Bank of America, Banks, Bloomberg, Bonuses, Capital Markets, CITI, Citibank, Citigroup, Corruption, Debt, Economic Crisis, Economy, Financial System, JPM, JPMorgan, JPMorgan Chase, losses, Markets, Recession, Revenue, risk, TARP, Treasury, Wachovia, war, Wells Fargo |
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