Friday, October 21, 2016

Lions Hunting Zebras

Wells Fargo Targeted Most Vulnerable Customers In Scam:

Mexican immigrants who speak little English. Older adults with memory problems. College students opening their first bank accounts. Small-business owners with several lines of credit.

These were some of the customers whom bankers at Wells Fargo, trying to meet steep sales goals and avoid being fired, targeted for unauthorized or unnecessary accounts, according to legal filings and statements from former bank employees.

“The analogy I use was that it was like lions hunting zebras,” said Kevin Pham, a former Wells Fargo employee in San Jose, Calif., who saw it happening at the branch where he worked. “They would look for the weakest, the ones that would put up the least resistance.”

At a branch in Scottsdale, Ariz., members of a local Native American community would arrive like clockwork every three months with checks for their share of the community’s casino revenue. It was then, said Ricky M. Hansen Jr., a former branch manager there, that some bankers would try to dupe them into opening unnecessary accounts laden with fees.

In California, it was people with identification cards issued by Mexican consulates. The absence of a Social Security number made it simpler for Wells Fargo employees to open fraudulent accounts in those customers’ names. Wells Fargo is one of the few major banks to permit accounts to be opened without Social Security numbers.

And in Illinois, one former teller described watching in frustration as older customers fell prey.
“We had customers of all ages, but the elderly ones would at times be targeted, because they don’t ask many questions about fees and such,” Brandi Baker, who worked at a branch in Galesburg, Ill., said in an interview.
Good times. Nothing says integrity and quality banking like ripping off minorities, the elderly, non-English speakers, college students, and the disabled. And for those of you wondering "how could something like this happen at such a venerable institution like Wells Fargo?" I refer you to this study which found there are more psychopath CEO's and upper management on Wall Street and in Big Banking than there are in prison.

Firing these people (as Stumpf and others have now been let go via their golden parachutes) does nothing to make restitution to the victims of this massive fraud, nor does anything to prevent it from happening again. 

However, if we could move a significant percentage of the upper management of Wells Fargo into a maximum security prison, and move the current sociopaths in prison out, society would be demonstrably safer.

Wednesday, October 12, 2016

Liability And Abuses Of Power

Case Accusing Bush Officials Heads To SCOTUS:

The Supreme Court agreed on Tuesday to decide whether high-ranking George W. Bush administration officials — including John Ashcroft, the former attorney general, and Robert S. Mueller III, the former F.B.I. director — may be held liable for policies adopted after the Sept. 11 attacks.

The case began as a class action in 2002 filed by immigrants, most of them Muslim, over policies and practices that swept hundreds of people into the Metropolitan Detention Center in Brooklyn on immigration violations in the weeks after the attacks. The plaintiffs said they had been subjected to beatings, humiliating searches and other abuses.

The roundups drew criticism from the inspector general of the Justice Department, who in 2003 issued reports saying that the government had made little or no effort to distinguish between genuine suspects and Muslim immigrants with minor visa violations.
Ironic. For years I've lectured in 3150 and written about the abuses that took place in the days and weeks following 9/11 to deaf ears. Most students are either incredulous or in total darkness about the mass roundups which occurred between 9/11/01 and the end of that month.

Now this case promises to shed more light and pin the tail on the ass that was the overreaction of high ranking Bush admin officials in those days and weeks following. And guess who (not surprisingly) is against the immigrants and their lawsuit? 
In its petition seeking Supreme Court review, the Obama administration urged the justices to put an end to the litigation.

“The Court of Appeals concluded,” the petition said, “that the nation’s highest ranking law enforcement officers — a former attorney general of the United States and former director of the F.B.I. — may be subjected to the demands of litigation and potential liability for compensatory and even punitive damages in their individual capacities because they could conceivably have learned about and condoned the allegedly improper ways in which their undisputedly constitutional policies were being implemented by lower-level officials during an unprecedented national security crisis.”
Cowards. Say what you will about the Obama administration in its final days now, but it has been damn consistent for the past 8 years on the issue of the War on Terror, GITMO, and the egregious abuses of government officials during the Bush years: "it's better to look forward than it is looking backwards." 

The lead plaintiff's lawyer speaks for me on this one.
Rachel Meeropol, a lawyer with the Center for Constitutional Rights, which represents the plaintiffs, said the cases, Ashcroft v. Turkmen, No. 15-1359 and two others, involved fundamental principles.

“No one is above the law,” she said. “To suggest that the most powerful people in our nation should escape liability when they violate clearly established law defies the most fundamental principle of our legal system.”

Should be an interesting argument and decision, given a depleted court already and two justices already recusing themselves. The case is Ashcroft v. Turkmen (2017).

Friday, October 7, 2016

Incarceration and Voting Disenfranchisement (part 6 million)

Why 10% of Florida Population Can't Vote In November:

One of every 40 American adults cannot vote in November’s election because of state laws that bar people with past felony convictions from casting ballots. Experts say racial disparities in sentencing have had a disproportionate effect on the voting rights of blacks and Hispanics.

A report by the Sentencing Project, a nonprofit organization focused on criminal justice reform, estimates that 6.1 million Americans will not be allowed to vote next month because of these laws.

State laws that bar voting vary widely. Three swing states — Florida, Iowa and Virginia — have some of the harshest laws; they impose a lifetime voting ban on felons, although their voting rights can be restored on a case-by-case basis by a governor or a court. On the other end of the spectrum, Maine and Vermont place no restrictions on people with felony convictions, allowing them to vote while incarcerated.
“The message that comes across to them is: Yes, you have all the responsibilities of a citizen now, but you’re basically still a second-class citizen because we are not permitting you to be engaged in the political process," said Christopher Uggen, lead author of the report and a professor at the University of Minnesota.
If you delve into the Sentencing Project's report a little deeper (co-authored, incidentally, by a colleague of mine Sarah Shannon), you'll see how this troubling trend is simply getting worse. Even though we've been talking about criminal justice and sentencing reform for five years now (if not longer) these are the kinds of "invisible punishments" Michael Welch talked about 20 years ago...the kinds of things which impose a "civil death" upon a population that has already "done the crime, done the time."

And the fact that the states in question with the highest disenfranchisement rates, and with the most onerous conditions for voting reinstatement, also have the highest minority and poor populations is beyond mere correlation. Simply put, voting disenfranchisement is the Poll Tax's ugly stepchild.
African American disenfranchisement rates in Kentucky,Tennessee, and Virginia now exceed 20 percent of the adult voting age population. Whereas only 9 states disenfranchised at least 5 percent of their African American adult citizens in 1980, 23 states do so today.
It's a grim reminder that despite all the punishment reform happy talk, more than 6 million of our fellow citizens will be denied participation in the election coming up in November. And while it's trendy and hip to claim political alienation, or "disgust with both parties," or "there ain't a dime's worth of difference between any of them," voter apathy is still fundamentally a choice.

Imagine wanting to participate in the electoral process and simply NOT being allowed to. Your ironic "disgruntlement" might look rather silly in comparison.

Tuesday, September 27, 2016

Violent Crime Up, Property And Overall Crime Down In 2015

Check the inflammatory headline in the Times today:

U.S. Murders Surged in 2015.

The country’s murder rate jumped more last year than it had in nearly half a century, newly released federal crime data showed, although the number of homicides remained far below the levels of the 1980s and ’90s.
The data, part of an annual report released on Monday by the F.B.I., showed that the murder rate rose 10.8 percent across the United States in 2015, part of a nearly 4 percent increase in violent crime.

Fueling the surge in murders was street violence in a handful of major cities, notably Baltimore, Chicago, St. Louis, Washington, D.C., and Milwaukee, where most of the victims were young African-American males. The F.B.I. reported that guns were used in nearly three-quarters of the nation’s 15,696 murders during 2015.
To put this in perspective, the "surge" was from 14,000 homicides to 15,000 homicides. Yes, an additional thousand homicides is troubling, but in comparison, the number of murders in 1987 was more than 25,000. And that's not controlling for population. The fact remains, homicide rates remain at their lowest levels since the 1960's, and overall crime fell again for the 14th consecutive year.
The murder rate last year was far below the levels of 30 to 40 years ago, when violent crime, fueled partly by gang violence during the crack cocaine epidemic, reached a peak. The overall 3.9 percent increase in violent crime in 2015 was lower than levels from five and 10 years ago, the F.B.I. said.

“It is important to remember that while crime did increase over all last year, 2015 still represented the third-lowest year for violent crime in the past two decades,” Attorney General Loretta E. Lynch said Monday.

By contrast, property crimes fell 2.6 percent in 2015, according to the F.B.I. data.
Also, while Rape (+6%), Robbery (+1.4%) and Aggravated Assault (+5%) were all up, these are well within the range of reporting deviations. Meaning, victims may simply be reporting their victimizations at higher rates, rather than actual incidences of these crimes increasing. 

Nonetheless, any increase in violence is problematic. Let's just hope the issue doesn't become politicized (although based on the first presidential candidate debate last night, I suspect it's too late for that).

As always, go to the horse's mouth for the facts: Crime in the United States, 2015

UPDATE: Here's a good analysis on why "whether crime is up or down" is a matter of interpretation with official statistics.

Tuesday, September 20, 2016

Wells Fargo Don Takes Heat

Senators Grill Stumpf Over Role In Fraud:
The chief executive of Wells Fargo — where bankers opened secret and unauthorized credit card and deposit accounts for customers for at least five years in an attempt to meet sales goals — told a Senate panel Tuesday morning that the illegal activity might have gone on even longer and that no senior executives had been fired as a result.

Senators on both sides of the aisle expressed anger and indignation at the chief executive, John G. Stumpf, with several lawmakers calling for him to give back some of his rich compensation.
Watch Sen. Warren's grilling of the Don, er, CEO Stumpf, and pay attention to the verbiage. Clearly, someone on her staff has been reading my blog and/or taking my classes.

Ha can deposit my royalties via direct deposit, Senator. As I wrote earlier, the only way to prevent this kind of massive, mob-like fraud in Big Banking is to start sending these Wall Street sociopaths to the Big House. Because that's exactly where the lowly teller who pocketed a Benjamin would be headed.

Here's a fuller 9 minute version. I particularly enjoy the way she deploys the term "scam" repeatedly, not to mention the looks on the faces of the two dopes seated behind the don, er, CEO:

Sadly, this is probably as far as this stuff will ever get re: justice. You can tell from the dumb look on his face he knows he's gotten away with it. Just like they always do.

UPDATE: Rumors of a class-action lawsuit brought by hundreds of the low-level street guys, er, Wells employees who were fired in this, may be coming true.
The bank’s chief executive, John Stumpf, has often stated his goal that each Wells customer should have at least eight accounts with the company. That aggressive target has made the bank’s stock a darling on Wall Street, the lawsuit notes.

On Monday, a federal lawsuit with analogous claims was filed in the United States District Court for the Central District of California, seeking to create a class of current and former Wells employees across the country who had similar experiences.

“These are the people who have been left holding the bag,” said Jonathan Delshad, the lawyer representing the workers in both suits. “It was a revolving door. If you weren’t willing to engage in these types of illegal practices, they just booted you out the door and replaced you.”
I guess Don Stumpf wasn't the sharpest tool in the shed after all. Anyone running a criminal enterprise knows the first thing you stress with the street guys/underlings is Omerta: silence at the risk of death. 

Looks like the Wells Family might be singing like canaries.

Thursday, September 15, 2016

Wells Fargo & The Golden Parachute

Following up on my post last week "Big Bank, Big Criminal," comes another eye-popping coda to the story: the executive in charge of the division where the massive, 5,000+ employee fraud and looting of Wells Fargo's customers (this blog author among them) occurred, will receive more than $125 million in early retirement benefits. For realz.

In connection with the “widespread illegal practices,” Wells Fargo has also fired 5,300 employees and managers, with one notable exception: the executive in charge.

Instead of bearing any responsibility for this scandal, Carrie Tolstedt, the divisional senior vice president for community banking who supervised the 6,000 retail branches where the wrongdoing took place, is retiring, taking with her millions in stock and options.

Wells Fargo was aware of the problems in the division when Ms. Tolstedt announced her retirement on July 12. The bank’s sales practices have been under regulatory scrutiny since at least November. 
Further, the bank itself has been working to identify the affected customers and complicit employees.

Despite knowing about the widespread misconduct on her watch, Wells Fargo gave Ms. Tolstedt a glowing farewell. John Stumpf, the chief executive, called her a “role model for responsible leadership” and “a standard-bearer of our culture.”
Stop laughing...they're both "standard-bearers" of a Wells Fargo culture that willingly endorses fraud, identity theft, and the looting its own customers. And check the golden parachute she'll receive:
Her compensation — more than $27 million over the last three years — has never been dinged as a result of these problems. Further, Ms. Tolstedt continues to be employed at the bank through the end of the year. She stepped down only from her division role — getting out of the hot seat just weeks before the regulatory settlement was announced.

So, as in most banking scandals, lower- and midlevel employees face repercussions, but senior executives are whisked out of harm’s way, with their reputations and full stock awards intact. For Ms. Tolstedt, that could be as much as $125 million.
::crickets chirping::

Isn't that just like the mob? The underboss starts drawing too much scrutiny, so you just make her Capo di Capi Re and allow her to retire emeritus? I wonder how the 5,300 picciottos (or street guys) who got whacked feel about this? 

Until these golden parachutes turn into golden leg irons and handcuffs, and we start seeing senior execs frog-marched out the front doors of Wells Fargo HQ, these kinds of massive, Big Bank, white-collar ripoffs will continue. 

Paging Cesare Beccaria...come in Cesare...

Friday, September 9, 2016

Big Bank, Big Criminal

Wells Fargo Fined $185 Million For Fraud:

For years, Wells Fargo employees secretly issued credit cards without a customer’s consent. They created fake email accounts to sign up customers for online banking services. They set up sham accounts that customers learned about only after they started accumulating fees.
On Thursday, these illegal banking practices cost Wells Fargo $185 million in fines, including a $100 million penalty from the Consumer Financial Protection Bureau, the largest such penalty the agency has issued.

Federal banking regulators said the practices, which date back to 2011, reflected serious flaws in the internal culture and oversight at Wells Fargo, one of the nation’s largest banks. The bank has fired at least 5,300 employees who were involved.

In all, Wells Fargo employees opened roughly 1.5 million bank accounts and applied for 565,000 credit cards that may not have been authorized by customers, the regulators said in a news conference. The bank has 40 million retail customers.
Including the author of this blog, who is now busy running credit reports to see how many accounts were fraudulently opened in my name over the past few years. 

While the depth and length of the fraud is both astonishing (five years?) and not (it's Big Banking, who's really surprised?), the lack of criminal culpability is more troubling.

Not only were the 5,300 employees terminated, as opposed to arrested and jailed, but not one single upper level management or senior executive was even disciplined.
Banking regulators said the widespread nature of the illegal behavior showed that the bank lacked the necessary controls and oversight of its employees. Ensuring that large banks have tight controls has been one of the central preoccupations of banking regulators after the mortgage crisis.

Wells said the employees who were terminated included managers and other workers. A bank spokeswoman declined to say whether any senior executives had been reprimanded or fired in the scandal.
LOL. Like these 5,300 people were operating in a vacuum, with no senior executives being aware what over FIVE THOUSAND EMPLOYEES were doing on their behalf.

This is why "settling" these cases in civil court, rather than prosecuting these cretins in criminal court, perverts the rule of law itself. Put it this way, if you stole someone's identity and illegally opened and closed accounts under their name and got caught, you'd end up doing 10-20 years at the cross-bar Hilton, no questions asked. 

These people? Terminated, hands washed, case closed. And worse is how upper management escapes culpability by paying the fine.

Let's pedestrianize it further for a moment: imagine the mob carrying out a variety of shakedowns, loan sharking and money laundering. When people start complaining, the don fires a handful of street guys, claiming he had no idea they were doing such a thing. Not only do the wise guys escape criminal punishment completely, the family then pays a fine to the district attorney to make amends for the "confusion" and trouble, and the case simply goes away.

No, that's not "far-fetched." It's totally analogous to what the dons/senior execs at Wells Fargo got away with here. 

Nice to know, more than 8 years since the financial meltdown started via the greatest ripoff ever perpetrated by Wall Street, that absolutely nothing has changed in the world of big banking. When prison is taken off the table, this stuff will continue ad nauseum in perpetuity.

Meanwhile, I'm applying for my refund and think I'll just withhold next month's mortgage payment. Y'know, till we can "figure out what the hell is going on." Ha ha...

Btw, that picture above? I took it from the Wells Fargo website "annual employee retreat."

UPDATE: As this article points out, the most egregious part of the "settlement" is that the sociopath executives who run Wells Fargo didn't even have to admit wrongdoing.
But with its banking regulators, Wells Fargo was not as contrite. The bank agreed to pay $185 million in fines and hire an independent consultant to review its sales practices, but it was able to settle the investigation into the questionable accounts without officially admitting to any of the suspected misconduct.

It was classic Wall Street. Since the financial crisis, regulators have brought dozens of cases against banks and other financial firms, hitting them with tens of billions of dollars in fines and requiring the companies to overhaul their business practices. But frequently, regulatory cases are settled without a bank having to admit doing anything wrong.
"Classic Wall Street" indeed. Another victory for big bank thugs and the Keystone regulators who enable them.