Wells Fargo pays $72.6 million to resolve Justice Department claims it defrauded currency customers
The Banksters are at it again
One cannot help but wonder why Wells Fargo Bank has any customers left at all. Among their settlements for screwing over their customers, this latest fraud is yet another, added to:
- 126 financial offenses, totaling $15,948,637,160 (a whisper less than $16 billion) in fines
- 3 competition-related offenses, totaling $3,148,000,000
- 2 government-contracting-related offenses, totaling $1,204,046,786
- 28 consumer-protection-related offenses, totaling $767,880,813
- 53 employment-related offenses, totaling $609,495,960
- 7 mortgage abuses, totaling $5,625,783,671
- 16 banking violations, totaling $3,950,832,386
- 7 toxic securities abuses, totaling $3,637,750,000
- 1 fraud case settled for $3,000,000,000
- 82 investor protection violations, settled for $2,487,362,735
…and a partridge in a pear tree.
The mystery is, why settle with no admission of guilt and no jail time?
Who knows? We can only speculate. But one thing for sure is that none of it goes unnoticed among the public and the rule of law we are so proud of in America wilts on the branch when this sort of nonsense goes unpunished.
According to a 2017 article in The New Yorker magazine, prosecution of white-collar crime is at a twenty-year low.
“In the summer of 2012, a subcommittee of the U.S. Senate released a report so brimming with international intrigue that it read like an airport paperback. Senate investigators had spent a year looking into the London-based banking group HSBC, and discovered that it was awash in skulduggery. According to the three-hundred-and-thirty-four-page report, the bank had laundered billions of dollars for Mexican drug cartels, and violated sanctions by covertly doing business with pariah states. HSBC had helped a Saudi bank with links to Al Qaeda transfer money into the United States. Mexico’s Sinaloa cartel, which is responsible for tens of thousands of murders, deposited so much drug money in the bank that the cartel designed special cash boxes to fit HSBC’s teller windows. On a law-enforcement wiretap, one drug lord extolled the bank as “the place to launder money.”
Wow, that sounds pretty serious. I read last week that a black guy got sent to prison for life for shoplifting a scarf. Laundering billions for drug cartels ought to put HSBC bankers up in front of a firing-squad by comparison.
I wonder how that worked out.
Senator Carl Levin, who headed the investigation, declared, “This is something that people knew was going on at that bank.” Half a dozen HSBC executives were summoned to Capitol Hill for a ritual display of chastisement. Stuart Gulliver, the bank’s C.E.O., said that he was “profoundly sorry.” Another executive, who had been in charge of compliance, announced during his testimony that he would resign. Few observers would have described the banking sector as a hotbed of ethical compunction, but even by the jaundiced standards of the industry HSBC’s transgressions were extreme. Lanny Breuer, a senior official at the Department of Justice, promised that HSBC would be “held accountable.”
I’m profoundly sorry, Judge, for laundering all those billions, so please don’t send me to the slammer.
Fear not, the Department of Justice is on the case
What Breuer delivered, however, was the sort of velvet accountability to which large banks have grown accustomed: no criminal charges were filed, and no executives or employees were prosecuted for trafficking in dirty money. Instead, HSBC pledged to clean up its institutional culture, and to pay a fine of nearly two billion dollars: a penalty that sounded hefty but was only the equivalent of four weeks’ profit for the bank.
A headline in the Guardian tartly distilled the absurdity: “HSBC ‘Sorry’ for Aiding Mexican Drug Lords, Rogue States and Terrorists.”
(New Yorker) As Jesse Eisinger, a reporter for ProPublica, explains in a new book, “The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives” (Simon & Schuster), a financial crisis has traditionally been followed by a legal crackdown, because a market contraction reveals all the wishful accounting and outright fraud that were hidden when the going was good. In Warren Buffett’s memorable formulation, “You only find out who is swimming naked when the tide goes out.”
When the law no longer applies…
…everyone breaks it. Far worse than that, every ordinary citizen loses his respect and even a traffic stop becomes an absurd argument about fairness and equity.
As another example, almost every salaried worker in America has his taxes withheld by his employer. Why? Because they can, ever since the government Current Tax Payment Act of 1943.
That’s for us little guys. The Big Hitters, the guys who don’t bother to stop at signs the rest of us obey, are paid a nominal (sometimes one dollar) salary. Bezos and Zuckerberg and such get their billions as increases in the price of stock owned, bonuses or stock-options—none of which are subject to withholding.
Just as the wealthy offshored their businesses—leaving their former employees stranded as consumers rather than producers—they offshored their wealth.
There’s a stop-sign at the end of my street
As long as we all agree to stop, no one gets killed. Once my neighbors begin to drive through it, I am tempted as well and pretty soon no one is stopping anymore.
You get my drift.
The current CEO of Wells Fargo needs to go to jail
It’s his civic duty to go and the judicial duty of the Department of Justice to send him there.
Bernie Madoff went to prison for life after being found guilty of a Ponzi scheme that was small-potatoes compared to the crimes of Wells Fargo.
Madoff died in prison.
I do not wish the CEO of Wells Fargo to die in prison, but I wish him to go there. I haven’t even bothered to look up his name. There have been a number of them since the bank’s reputation disappeared down the drain and they are probably decent men who love their children and don’t normally cheat at cards.
But trust me, a two-year sentence in a federal prison and banishment from the banking community for life would stop all this nonsense in its tracks.
Would Jamie Dimon at JP Morgan or Linda Hudson at Bank of America take that risk? I think not. Bernie Madoff dying in prison no doubt put a chill in the hearts of those contemplating Ponzi schemes.
It’s long past time to raise some hairs on the backs of the necks of America’s banksters. Elizabeth Warren agrees with me and there’s something to be said for that.
Image Credit: NYTimes.com