Look Who 'Has Stolen IDs and Fake Tax Returns'.. What's a Little Bank Fraud Between Friends, Anyway?

Did HSBC Bank Knowingly Launder Billions in Drug Money?

Making fraudulent loans to corporate accounts that existed in name only was a key part of an alleged money-laundering scheme by the global bank HSBC, according to a whistleblower who has provided WND with more than 1,000 pages of evidence.

The evidence includes customer account ledgers for dozens of companies through which the financial institution was laundering money each month, charges John Cruz, a former relationship manager for the bank’s southern New York region.

“A bank employee would first set up a bogus corporate account using a stolen corporate identification and the required personal identification to set up the account,” the whistleblower explained. “The loan request would go to HSBC underwriting in Buffalo and the loan would get approved, often on the basis of fraudulent tax returns and fraudulent documentation to support the loan.”

The series of articles on HSBC already has caused fallout for this reporter and for WND, which saw one of the articles temporarily blocked when HSBC filed a complaint with an Internet provider that turned out to be unwarranted. PayPal and American Express also have been implicated in the bank fraud.

HSBC reportedly is under investigation by a U.S. Senate committee, and WND has provided material to federal investigators.

Cruz said the scheme relied on corporate and personal information selected by identity theft to give the fraudulent account a sufficiently good credit history to justify the loan, even though all the supporting documentation, including tax returns, was fraudulent.

“Even when these fraudulent loans were declined, HSBC employees in on the scheme would simply call senior bank executives to have the loans approved, thereby effectively by-passing underwriting.

Exhibit 1 is a HSBC list of fraudulent bank loans made by various employees, all of whom used the same bogus USER ID here redacted as 433***36. All customer and bank employee information has been redacted from this report to respect privacy restrictions.

Each line item in Exhibit 1 represents a different loan made to a different fraudulent company.

Cruz noted that all of the Social Security numbers are legitimate numbers used by the HSBC identity thieves to establish the account.

“None of companies listed were functioning companies, and the loan files lacked critical documentation including source of repayment,” Cruz said.

The whole point was to steal hundreds of millions, if not billions of dollars from HSBC itself, Cruz alleged, through the fraudulent loans drawn from bank income. As a result, the net earnings of the bank were depressed and the loan loss transferred to the shareholders once the loans defaulted.

“Once the loans were made, checking accounts were established by HSBC employees for the fraudulent corporations, and the loan proceeds were transferred into the corporate accounts,” he explained. “Once the loan funds were in the fraudulent corporate accounts, HSBC employees in on the scheme could wire the money out of the accounts to locations not recorded in the account bank statements.”

Exhibit 2 is another HSBC internal bank record documenting fraudulent loans. The user ID of the bank employee making the loans is again 433***86, a number multiple bank employees utilized when setting up bogus corporate accounts for fraudulent loans.

Exhibit 2: HSBC internal report documenting alleged fraudulent loan activity

Every time Cruz saw suspicious loan activity, he reported it – through emails, faxes and telephone calls.

When he realized his reports with senior management and bank security were being ignored, Cruz began wearing a wire so he could record conversations with bank employees in which the discussions confirmed their awareness of the fraudulent activity and their unwillingness to do anything to stop it.

He also began printing out reports documenting fraudulent loans and keeping a record of his emails that he could remove from the bank location for safekeeping.

Exhibit 3 is a memo Cruz wrote in his attorney’s office shortly before he was terminated by HSBC, to be sent to his direct management supervisor at HSBC.

In the memo, Cruz explained the methodology in which fraudulent loans were being created by HSBC employees. He also detailed his efforts to bring the information to bank security officers.

The names of the bank officers discussed in the memo have been redacted to respect privacy.

Exhibit 3: John Cruz memo to HSBC bank management

“The only result of the memo was that the bank took disciplinary action against me,” Cruz said. “I reported the fraud, and I was reprimanded for not bringing in more business. I was told that my job was not to report fraud, but to bring in more business. Since I refused to bring in new business from fraudulent accounts, I marked myself for termination.”

In February 2010, Cruz was terminated from HSBC for poor job performance; he had been at HSBC since January 2008.

After leaving the bank, Cruz attempted through his attorney to turn his information over to the Department of Homeland Security.

“DHS didn’t even respond,” he said. “We didn’t get as much as a letter from DHS, despite the repeated calls and emails my attorney made to DHS in the attempt to get their attention.”

Cruz has no idea how much money went through HSBC in fraudulent loan activity. The amount that he observed and was not able to print out ran into the billions of dollars, he estimates.

“Every day I went to work, I began to wonder how many fraudulent accounts I would find that day,” he said. “But every time I found something suspicious, the reaction I got from bank management and bank security was, ‘Shut up and do your job.’”

Article by Jerome R. Corsi, a Harvard Ph.D., and a WND senior staff reporter. He has authored many books, including No. 1 N.Y. Times best-sellers "The Obama Nation" and "Unfit for Command." Corsi's latest book is "Where's the REAL Birth Certificate?"

Homeowners Foreclose On Bank Of America. Sweet Justice! (VIDEO)

Let's hope this is the beginning of a trend! Let Big Banks know that they are subject to the same rules as the rest of us and maybe they will start to play fair. 

Wake Up America.. We CAN slay the giants 

  

Sweet Justice! 

That's how foreclosure defense attorney Todd Allen described the feeling of going to a Bank of America branch in Naples, Fla. to seize their assets.

Faced with a pair of sheriff's deputies locking down his building, the branch manager capitulated and handed over a check for $2,534. The sum was to cover Allen's fees from a case where he represented clients that the bank had tried to foreclose on -- despite the fact that they paid for their home in cash.

According to the News-Press in Fort Myers, Bank of America opened their case against Warren and Maureen Nyergers in February of 2010 and voluntarily dropped it two months later, but never coughed up for the couple's legal fees as ordered by a judge.

Sheriff's deputies, movers, and the Nyergers' attorney went to the bank and foreclosed on it. The attorney gave instructions to to remove desks, computers, copiers, filing cabinets and any cash in the teller's drawers.

After about an hour of being locked out of the bank, the bank manager handed the attorney a check for the legal fees.

The foreclosure nightmare started when Warren and Maureen Nyerges paid cash for a home owned by Bank of American in the Golden Gate Estates. They never had a mortgage whatsoever. But, the bank fouled it up and wound up issuing a foreclosure through their attorney.

The couple took their case to court and after a year and a half nightmare the foreclosure was dropped. A Collier County judge said Bank of America has to pay the couple's $2,534 legal fees for the error. After more than five months the bank still hadn't paid up. So, the homeowners' attorney did just what the bank would do to get their money, legally seize their assets.

"I instructed the deputy to go in and take desks, computers, copiers, filing cabinets, including cash in the drawers," Attorney Todd Allen told WINK News.

Outside the Bank of America on Davis Boulevard, several deputies stood by with movers ready to start hauling out the bank's office supplies and furniture.

Inside, the homeowners' attorney was locked out of the bank manager's office by deputies while the bank manger tried to figure out what to do.

Allen says the manager was visibly shaken, "Having two Sheriff's deputies sitting across your desk, and a lawyer standing behind them, demanding whatever assets are in the bank can be intimidating. But, so is having your home foreclosed on when it wasn't right."

After about an hour the bank finally cut a check to satisfy the debt, and no furniture was taken. A representative for Bank of America issued a statement saying they are sorry for the delay in issuing funds. They claim the original request went to an outside attorney who is no longer in business.

As for Allen, he calls this a symptom of a larger problem he sees often in the courts, where banks don't perform their due diligence on foreclosure cases. "As a foreclosure defense attorney this is sweet justice."

Click here to see video

Article courtesy of Wink News 

Stingy Megabanks Swimming in Cash and Loaning Less Than Ever

After receiving billions in TARP money from YOU, these crooked megabanks now have enough "F**k You Money" to show Americans how they really feel. If Congress would have bailed out the public, the bankers would not have needed the bailout. And taxpayers would have been the ones telling the banks, F**K U!

Wake Up America! You are being SCREWED!!

If the megabanks are so big on lending, why do their loan books keep shrinking?

The biggest U.S. banks tell us they have spent the past quarter writing loans, renewing credit lines and generally being upstanding economic citizens. Bank of America (BAC) says it provided consumers and businesses with $144 billion in credit in the first quarter, Wells Fargo (WFC) ponied up $151 billion and JPMorgan Chase (JPM), swinging for the PR fences, claims to have lent out an improbable-looking $450 billion.

Yet loan balances actually shrank from a year ago at all three banks in the first quarter, just as they did at their old pal Citi (C). This at a time when the too-big-to-fail four are being drenched with new deposits (see chart).

All told, average loans outstanding at  the fearsome four dropped 7% from a year earlier – a decline of $210 billion -- even as deposits rose 5%.

If this is what the bailed-out captains of the financial sector call supporting the recovery, no wonder the economy is going nowhere fast.

The banks, of course, protest that there are good reasons that their loan balances are dropping even as they wrap themselves in the flag of credit extension.

Good customers aren't exactly banging down the door demanding loans, they say, and won't till the recovery really gets rolling. And making loans for the sake of it doesn't pay off, as we may have learned during the financial meltdown.

"We got to where we are today by making good loans and making sound credit decisions," Wells Fargo's chief financial officer, Tim Sloan, said in an interview Wednesday.

And yes, even with all that shrinkage there are pockets of loan growth at the banks. JPMorgan Chase says loans to midsize companies rose every month last year, and Wells points to strength in auto dealer and commercial lending, along with the oft-questioned commercial real estate sector. 

"We love that business," says Sloan.

But mostly, loans are shrinking. That's partly because banks must put the worst mistakes of the bubble era in the rearview mirror, by taking losses on bad loans and letting other low-quality portfolios run off. Both those moves lead to lower loans outstanding.

All four banks are taking their lumps on that front. BofA is running off loans from the beyond-lax Angelo Mozilo era at Countrywide, JPMorgan is dealing with the sales-at-any-cost (see a shining example, below right) mindset of Kerry Killinger & Co. at Washington Mutual, and Wells Fargo is trying to rid itself of the worst Pick-a-Pay dross it picked up in its acquisition of Wachovia. Citi, of course, has its own issues.

Still, it's clear the banks are not lending quite as freely as their press release claims would have you believe. And the declines are all the more striking because they come when the banks, like their perk-addicted CEOs, are swimming in cash.

Average deposits at the four biggest banks rose by $154 billion over the past year, with Bank of America breaking $1 trillion in deposits for the first time and JPMorgan falling just $4 billion short of that mark.

As a result, all the big banks now have at least $1.06 in deposits for every dollar in loans outstanding. At this time a year ago, only JPMorgan was above $1 in deposits for each dollar in loans.

There is something to be said for banks having a lot of cash on hand, of course. As everyone but Dick Fuld learned from the crisis, running out of money makes it hard to persuade others of your firm's franchise value. And of course it is hard to grow a business without reaching out to new users.

"We are glad to have a highly liquid balance sheet," says Sloan. "Deposit growth gives us a chance to bring in new customers and cross-sell our products."

Given the banks' penchant for cooking up rosy-looking credit creation numbers at a time when their loan books are actually shrinking, maybe those products should come with a grain of salt.

Article by Colin Bar, CNN Fortune

Bofa CEO: Owners Shouldn't Look At Home As An Asset

The CEO of Bank of America, one of the banks culpable for the housing bust, now tells Americans that their homes are not worthy of being considered an asset, but rather a "...great place to live."

Wake Up America!! 

You CAN do something about this mess you're in if you will only take hold of your rights and exercise them. Vote out the villainous traitors who allow these bankers free reign to destroy our economy!

  

Homeowners may need to look elsewhere for long-term investment returns as housing prices in some areas may not rebound long-term, Bank of America Corp Chief Executive Officer Brian Moynihan said on Tuesday.

Moynihan, CEO of the largest U.S. bank, said at a state attorneys general summit that low population growth in some regions of the country indicated that prices might not rise in the wake of the worst financial crisis since the Great Depression.

"It's sobering to think, but some people shouldn't be thinking of (their home) as an asset," Moynihan said at the 2011 National Association of Attorneys General conference. "They should be thinking of it as a great place to live."

Moynihan said the long-term average annual rise in post-war U.S. home prices of 4 percent owed much to the explosion in domestic population and, in more recent times, the relaxation of credit standards across the mortgage industry.

"The reality is that the population is not expected to grow the way it did post World War I and World War II," he said.

Moynihan noted an Ohio customers' complaint that his 100-year-old home was valued at $50,000. The home, Moynihan said, would be valued as "some multiples of that figure" if it were located elsewhere, but stagnant population levels in the state are driving demand and home prices lower.

The conference included many of the state attorneys general currently engaged in negotiations with BofA and other lenders about a broad settlement to allegations that the industry cut corners on foreclosures.

Moynihan said during his prepared remarks that he had spoken with the attorneys general about industry issues, but declined to comment further about the discussions.

Article by Joe Rauch, CNN

Bank Fraud: The Perfect No-Prosecution Crime

   

US: State Attorney Generals are investigating 'Foreclosuregate' but no prosecutions for wrongdoing are being considered. The focus, instead, is on how to keep homeowners in their homes and how to keep the banks in business.  

In the aftermath of the S&L fraud of the 1980s, there were over a thousand felony convictions. The recent mortgage fraud is 40 times greater but NO convictions, not even investigations. The above cartoon explains it all.

Did you know that in the aftermath of the Savings and Loan (Thrifts) scandal there were more than a thousand felony convictions of financial elites?  The cost of the wrongdoing associated with the rip-off and closure of nearly 800 Thrifts cost taxpayers more than $160 billion.  

The current sub-prime/mortgage-backed security scandal is 40 times bigger according to Economics professor William Black.  That means the size of the crime is $6.4 trillion by my calculation.  Can you guess how many indictments there have been on financial elites who created this enormous mortgage crisis mess?  Zero, none, nada, zip.  Yes, not one single prosecution or conviction has been started of achieved.

That is simply outrageous considering the width and breadth of the many crimes committed.  There was “rampant” mortgage fraud in the loan application process according to the FBI as far back as 2004.  (Click here to see one of many stories of the FBI warning of mortgage fraud) is being used to wrongfully remove homeowners from their property.  That is foreclosure fraud. 

There was real estate document fraud when the original Promissory Notes and loan documents were “lost.”  The Promissory Notes were required to create tens of thousands of mortgage-backed securities (MBS).  No “note,” no security.  That is security fraud.  No security means the special IRS tax treatments for the MBS’s were fraudulently obtained.  That is IRS tax fraud.  Because there were no documents, the rating agencies fraudulently made up triple “A” ratings for the securities.  When the whole mess blew up, big banks hired foreclosure mill law firms to create forged documents. That phony paperwork was and is being used to wrongfully remove homeowners from their property.  That is foreclosure fraud.

It appears the entire mortgage/securitization industry is one giant criminal enterprise.  And yet, last Wednesday, Housing and Urban Development Secretary Shaun Donovan said, “We have not found any evidence at this point of systemic issues in the underlying legal or other documents that have been reviewed.”  

What!  Well, look a little harder Mr. HUD Secretary.  (Click here for the complete Reuters story with Donovan’s quote.) Donovan did say the foreclosure fiasco is “shameful,” but that is not the same as a criminal prosecution now is it?  Where is U.S. Attorney General Eric Holder in all of this?  

I guess he’s busy planning a lawsuit to stop California from making pot smoking a misdemeanor.  Holder is probably also very busy with continuing legal actions against Arizona’s immigration law.  I guess trillions of dollars in mortgage and securities fraud is just not enough of a legal priority for America!

All 50 State Attorneys General are looking into what is now being called “Foreclosuregate.”  Iowa AG, Tom Miller, is leading the investigation for the 50 states.  His focus, according to a recent Washington Post story, is “preventable foreclosures“–ones in which small changes might keep the homeowners in their home – benefits all parties involved. The borrower keeps the house. The servicer continues to collect fees, and the investors receive more income than a foreclosure would bring. The community has one less deserted home.” Miller’s office also says, “This is a public policy issue.”  (Click here to see the complete Wa Po story.)

When did State AG’s become public policy negotiators for the banks?  Where are the criminal prosecutions?  This is a sham and an outrage perpetrated by state governments.  Who are they protecting?  I say it’s really the banks’ and investors’ income stream.

It sure doesn’t look like the FBI is going to prosecute any of the “rampant” mortgage fraud any time soon, according to Professor Black.  At the end of September on the Dylan Ratigan Show, he said, “We know that the FBI has formed what it calls a partnership with the Mortgage Bankers Association.  Now, that’s a trade association of the perps, and guess what the trade association said: ‘Hey we’re the victims.  You know none of the bad stuff happened because the lenders wanted to engage in this fraud,’ and the FBI believed them if you can believe that!”

Black is not just some angry academic.  Besides being a Professor of Economics at the University of Missouri KC, he is also a former bank regulator and an expert in crimes committed by CEO’s.  He thinks Treasury Secretary Tim Geithner and Attorney General Eric Holder should be fired so real regulators can get to work on prosecutions of crime throughout the entire industry.  And get this, just last week, Black adamantly claimed that “major frauds continue,” at all the big banks.  

Again, Black said, “80% of the loans were fraudulent.” He also said in this segment (but wasn’t included in the clip) that, “securitized mortgage instruments are all fraudulent.” That means trillions of dollars in MBS’s are worthless!  Foreclosuregate is a gargantuan financial mess, and federal and state regulators have not found a single crime in all of this to prosecute?  Clearly, the U.S. government and both political parties are shielding the perpetrators.  

Oh wait!  The SEC did fine Angelo Mozilo, the former head of Countrywide Financial Corp., $67.5 million in penalties to settle civil fraud and insider-trading charges.  Mozilo ripped-off hundreds of millions of dollars, and he pays a fine that amounts to a parking ticket for a man of his wealth?   Is that the same as a criminal prosecution?  I don’t think so!!  (Click here for more on the Mozilo story from The WSJ.)

So, if you are or have been committing document, tax, security, rating or foreclosure fraud, you don’t have a thing to worry about.  Keep doing what you’ve been doing because you are committing “the perfect no prosecution crime.”  

According to the financial elites, these crimes are essential to keep the American economy running smoothly. 

Courtesy of USAWatchdog.com