Massive Fraud Scheme

No Will Go to Jail Over Wells Fargo’s Massive Fraud Scheme

Daily Intelligencer, Sept 9, 2016

In the last few years, Wells Fargo Bank employees committed serious crimes. That’s the clear takeaway from the Consumer Finance Protection Bureau’s announcement that it is levying its largest-ever fine against the bank. Wells Fargo will have to pay out $100 million to the CFPB, plus $85 million to other authorities, for a pattern of fraud, dating back to 2011, in which its employees opened up a vast number of new checking and credit accounts without account holders’ consent or knowledge.

Naturally, those 1.5 million checking accounts and half a million credit cards caused giant headaches for the consumers who didn’t sign up for them: In addition to the fact that they were charged overdraft and maintenance fees, some customers also dealt with — and, surely, are currently dealing with — significant hits to their credit scores as a result of not staying current on accounts they didn’t even know they had. They’ll likely have difficulty securing home and car loans at reasonable rates for years to come, simply because their bank decided to defraud them. This was criminal activity on a massive scale, and it is going to have lingering effects on innocent people.

 

Will anyone go to jail for this? The fine, after all, makes for a good headline but is actually something of a pittance: $185 million is just 3.3 percent of the $5.6 billion in net income Wells Fargo pulled in in the second quarter of this year. And whatever monetary penalties were assessed, there’s a strong case to be made, here as anywhere else, that individuals who engage in fraud should, well, be prosecuted for committing fraud.

 

The depressing answer is that it’s quite unlikely anyone will face criminal sanctions for Wells Fargo’s scheme. While the CFPB has left that door open, the Department of Justice is very unlikely, if recent history is any guide, to walk through it. The DoJ is the agency that matters here, since the CPFD itself doesn’t have the power to launch criminal investigations, but can refer its cases to the DoJ for further investigation and potential prosecution.

 

There are many recent instances of banks engaging in massive criminal activity, and coming away only with monetary punishments.

 

To take just a handful of them: In 2012, Standard Chartered was found to have violated the U.S.’s economics sanctions by moving hundreds of billions of dollars for Iran, and settled for $330 million. In 2012, federal investigators found that HSBC had, as the Times put it, “transferred billions of dollars for nations under United States sanctions, enabled Mexican drug cartels to launder tainted money through the American financial system, and worked closely with Saudi Arabian banks linked to terrorist organizations.” HSBC paid $1.92 billion. Then there was Barclays in 2010 — a fine of $298 million for illegal dealings with Cuba, Iran, Libya, Sudan, and Myanmar (before reluctantly approving the settlement, the judge in that case called it a “sweetheart deal”). Also, Credit Suisse in 2009: it settled for $536 million in connection with similar charges.

 

In many of these cases, the banks entered into what are called deferred prosecution agreements, with the DoJ effectively saying, “We have what we need to issue indictments right now, but if you make certain reforms, and pay a fine, we’ll table and eventually drop the charges.” Each scandal is different, but they share one commonality, other than the massive sums of money involved. Not one single individual spent a single day in jail for the criminal activity that justified those monetary penalties.

 

The US is mired in a double standard of justice when it comes to crimes committed by banks. If you or I failed to pay our federal income taxes, we could and would be indicted and convicted for a felony. But if you’re working for a big bank and you engage in a huge, massive fraud scheme that generated hundreds of millions of dollars of criminal proceeds over an extended period of time, no one goes to jail.

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Правительство США жестоко нарушало мои права человека при проведении кампании террора, которая заставила меня покинуть свою родину и получить политическое убежище в СССР. См. книгу «Безмолвный террор — История политических гонений на семью в США» — «Silent Terror: One family’s history of political persecution in the United States» — http://arnoldlockshin.wordpress.com

Правительство США еще нарушает мои права, в течении более 12 лет отказывается от выплаты причитающейся мне пенсии по старости. Властители США воруют пенсию!! Всё это — ещё доказательство, что настоящий действующий закон в США — Закон джунглей.

ФСБ — Федеральная служба «безопасности» России — вслед за позорным, предавшим страну предшественником КГБ, выполняет приказы секретного, кровавого хозяина (boss) — американского ЦРУ (CIA). Среди таких «задач» — запретить меня выступать в СМИ и не пропускать отправленных мне комментариев. А это далеко не всё…

Арнольд Локшин, политэмигрант из США

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