What do Wells Fargo and John Dillinger have in Common?

[Averageman]

Wells Fargo has seemed to have broken more than a few laws with this; I'm not hearing about jail time for any of this.
Any guess why?

http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/index.html

Everyone hates paying bank fees. But imagine paying fees on a ghost account you didn't even sign up for.
That's exactly what happened to Wells Fargo customers nationwide.

On Thursday, federal regulators said Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts -- without their customers knowing it -- since 2011.

Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees over the last few years related to the shady behavior. Employees went so far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.

Related: Who owns Wells Fargo? You, me and Warren Buffett

The scope of the scandal is shocking. An analysis conducted by a consulting firm hired by Wells Fargo concluded that bank employees opened over 1.5 million deposit accounts that may not have been authorized.

http://www.nytimes.com/2016/09/10/business/dealbook/wells-fargo-apologizes-but-doesnt-admit-misconduct.html?_r=0

Wells Fargo was flowing with regrets on Friday, taking out ads in nearly a dozen newspapers saying the bank took “full responsibility” for creating sham bank accounts without its customers’ permission.
The bank’s chief executive officer, John Stumpf, even called one prominent Democrat in Congress to express his willingness to assume personal responsibility for the mess. The bank fired at least 5,300 employees and refunded millions of dollars to customers.
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.

http://www.wsj.com/articles/next-test-for-wells-fargo-its-reputation-1473462195

A $185 million fine is small change for Wells Fargo & Co., which had profit last year of almost $23 billion. But the reputational blow from claims of “widespread illegal” sales practices could prove costly.

[wildcard600]

#coporatelivesmatter

[Outlander Systems]

#two-tiered-legal-system

[Sensei]

I never worked any identity theft crimes in my brief LE career, but this seems like it would fall under Section 1028 of the US criminal code: https://www.law.cornell.edu/uscode/text/18/1028

Maybe there are some 1811's out there who could chime in and let me know if I'm off base.

[Averageman]

http://www.blacklistednews.com/Major_Problems_Announced_At_One_Of_The_Largest_Too_Big_To_Fail_Banks_In_The_United_States/54010/0/38/38/Y/M.html

Do you remember when our politicians promised to do something about the “too big to fail” banks? Well, they didn’t, and now the chickens are coming home to roost. On Thursday, it was announced that one of those “too big to fail” banks, Wells Fargo, has been slapped with 185 million dollars in penalties. It turns out that for years their employees had been opening millions of bank and credit card accounts for customers without even telling them. The goal was to meet sales goals, and customers were hit by surprise fees that they never intended to pay. Some employees actually created false email addresses and false PIN numbers to sign customers up for accounts. It was fraud on a scale that is hard to imagine, and now Wells Fargo finds itself embroiled in a major crisis.
There are six banks in America that basically dwarf all of the other banks – JPMorgan Chase, Citibank, Bank of America, Wells Fargo, Morgan Stanley and Goldman Sachs. If a single one of those banks were to fail, it would be a catastrophe of unprecedented proportions for our financial system. So we need these banks to be healthy and running well. That is why what we just learned about Wells Fargo is so concerning…

So, we as investors have been screwed in a scheme in which the Banks have told those in charge of the money to get new investors.
They, when unable to find new accounts have decided to pillage your account to make ends meet.
No one ia going to jail over this, they are afraid to let the news slip about the pressure applied, which is as we called it in the Military a "Catch me **** Me Moment."
As long as I didn't get caught the game was good, now that it is exposed, well, no ones going to jail.

And the Law?
Well as Sensei has linked;
https://www.law.cornell.edu/uscode/text/18/1028
(7)knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, or in connection with, any unlawful activity that constitutes a violation of Federal law, or that constitutes a felony under any applicable State or local law; or
(8)knowingly traffics in false or actual authentication features for use in false identification documents, document-making implements, or means of identification;
shall be punished as provided in subsection (b) of this section.
(2)except as provided in paragraphs (3) and (4), a fine under this title or imprisonment for not more than 5 years, or both, if the offense is—
(A)any other production, transfer, or use of a means of identification, an identification document,,[1] authentication feature, or a false identification document; or
(B)an offense under paragraph (3) or (7) of such subsection;
(2)the term “document-making implement” means any implement, impression, template, computer file, computer disc, electronic device, or computer hardware or software, that is specifically configured or primarily used for making an identification document, a false identification document, or another document-making implement;"
(5)the term “false authentication feature” means an authentication feature that—
(A)is genuine in origin, but, without the authorization of the issuing authority, has been tampered with or altered for purposes of deceit;

Well if you used a Computer to commit this crime,......That's about five to ten.
But what will we see?
Too Big to Fail and Too Big to Jail, I would guess.

[SteyrAUG]

Remember when "people" used to rob "banks"?

[Moose-Knuckle]

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
– Henry Ford

[HKGuns]

#CreditUnions

[_Stormin_]

#CreditUnions
This was employees scamming a volume sales based incentive system to inflate their checks, or to keep their jobs due to goals they couldn't hit otherwise. Trust me, most of the local credit unions has the same sales volume based sales incentive systems that people can manipulate. Whether that's to hit goals and get paid, or to hit numbers and keep their jobs, it's out there and WF isn't the only one. The credit union's being some white knight is a total myth. Dishonest people can find their way into any organization.

[wilson1911]

So the people get robbed and the gov makes a huge profit ?

[austinN4]

This was employees scamming a volume sales based incentive system to inflate their checks, or to keep their jobs due to goals they couldn't hit otherwise. Trust me, most of the local credit unions has the same sales volume based sales incentive systems that people can manipulate. Whether that's to hit goals and get paid, or to hit numbers and keep their jobs, it's out there and WF isn't the only one. The credit union's being some white knight is a total myth. Dishonest people can find their way into any organization.

This is my read also. If any laws were broken it was by the dishonest employees. It has not been reported that WF asked for, encouraged, or required the scheme. Stupid overly aggressive goals maybe, but so far stupid isn't against the law. People just love to hate the banks, except, of course, when they want the banks to do something for them such a car or house loan.

[Averageman]

This is my read also. If any laws were broken it was by the dishonest employees. It has not been reported that WF asked for, encouraged, or required the scheme. Stupid overly aggressive goals maybe, but so far stupid isn't against the law. People just love to hate the banks, except, of course, when they want the banks to do something for them such a car or house loan.

Well here's the thing. I jump through hoops to get a loan and pay an interest rate, qualify and make a down payment. That's a simple business deal.
What they do with their incentives is their business, that's how they bring in new accounts.
This however was theft on a grand scale.
They get away with paying the money back and letting some people go and the .gov gets millions in fines. The consumer well, they might get their money back, but the rest will be swept under the rug.

[HKGuns]

This was employees scamming a volume sales based incentive system to inflate their checks, or to keep their jobs due to goals they couldn't hit otherwise. Trust me, most of the local credit unions has the same sales volume based sales incentive systems that people can manipulate. Whether that's to hit goals and get paid, or to hit numbers and keep their jobs, it's out there and WF isn't the only one. The credit union's being some white knight is a total myth. Dishonest people can find their way into any organization.

#NotPubliclytraded

[Averageman]

Wherever there are financial institutions working on a system where bonus's and possible loss of employment ride on the opening of new accounts or other financial transactions you open the system up to fraud.
It's that simple.

[austinN4]

This however was theft on a grand scale.
By the dishonest employees.


They get away with paying the money back and letting some people go and the .gov gets millions in fines. The consumer well, they might get their money back, but the rest will be swept under the rug.
I thought the CEO said all customers would be made whole, no? If true, the only losers here are WF itself and its shareholders.

And what is being swept under the rug? The dishonest employees are getting fired.

[austinN4]

Wherever there are financial institutions working on a system where bonus's and possible loss of employment ride on the opening of new accounts or other financial transactions you open the system up to fraud.

Just about all banks, S&Ls and CUs are. Doesn't matter if they are public companies or not. Yes, WF should have had better systems in place to avoid this, which is why they are getting fined by their regulators.

[Averageman]

By the dishonest employees.
I thought the CEO said all customers would be made whole, no? If true, the only losers here are WF itself and its shareholders.
And what is being swept under the rug? The dishonest employees are getting fired.

I'm wondering who will do the accounting for all of that?
I'm just guessing that if there is a loophole that allowed this to go on, it's not the easiest to find right away by the average account holder and will the burden of proof be on the consumer rather than the Bank?
Getting Fired should be the least of their punishments, jail should be mandatory.

[Averageman]

Just about all banks, S&Ls and CUs are. Doesn't matter if they are public companies or not. Yes, WF should have had better systems in place to avoid this, which is why they are getting fined by their regulators.

The crime didn't happen with the money of the regulators.
The money was stolen from account holders by fraud. The regulators are going to look at the problem from their perspective and not so much that of the consumer.
Its a payday for the .gov, a time to make some headlines for the regulators, a shameful moment for the Bank and employees but likely as not a punch in the nutz for the guys who got screwed.
If your money was caught in this shell game, so likely were some overdraft fines and your credit score and you may likely have to show the bank exactly where and when they took your money.

[Sensei]

By the dishonest employees.


I thought the CEO said all customers would be made whole, no? If true, the only losers here are WF itself and its shareholders.

And what is being swept under the rug? The dishonest employees are getting fired.

At first glance to someone who is not an expert in these matters, the employee's actions seem to be both dishonest and illegal. I'm still curious as to how much criminal exposure some of these employees have when they falsified documentation to open these accounts. I'm not saying that they should or will be indicted, but my gut tells me there is some noticeable exposure. There is also the issue of customers having their credit scores impacted by these zombie accounts. Several customers complained that the accounts were delinquent or assessed fees that impacted their credit scores. I'm not sure how the bank is going to make these customers whole.

FWIW, my wife is a Wells Fargo employee, but not directly involved in consumer banking. All of her team is talking about this over the past 3 days - all are ashamed for the institution.

[austinN4]

I'm wondering who will do the accounting for all of that?

I'd be surprised if bank didn't get a C&D order. Everyone will be doing the accounting - internal accounting and audit, external accounts and audit, regulators, etc.


I'm just guessing that if there is a loophole that allowed this to go on, it's not the easiest to find right away by the average account holder and will the burden of proof be on the consumer rather than the Bank?

Don't know the details, but it seems to that if money was taken out of my account to open a new account that I didn't ask for, I would report it to the bank right away. Don't know the time frame, but finally someone in the bank, accountants or regulators notices there are way to many of these being reported and it gets the investigation rolling.


Getting Fired should be the least of their punishments, jail should be mandatory.

You'll get no disagreement from me.


At first glance to someone who is not an expert in these matters, the employee's actions seem to be both dishonest and illegal.

Both, absolutely!

[austinN4]

I haven't followed the details of this fiasco, but just found this:

http://money.cnn.com/2016/09/09/investing/wells-fargo-ceo-john-stumpf-scandal-berkshire-hathaway-warren-buffett/

"The suit claims that employees engaged in "unlawful and fraudulent conduct, including opening customer accounts and issuing credit cards without authorization" and that the bank "has known about and encouraged these practices for years."

If that last part proves true, I would expect some of the top executives to lose their jobs and possibly even face criminal charges.

[The_War_Wagon]

#coporatelivesmatter

#TOObigtoFAIL!

[Averageman]

I haven't followed the details of this fiasco, but just found this:

http://money.cnn.com/2016/09/09/investing/wells-fargo-ceo-john-stumpf-scandal-berkshire-hathaway-warren-buffett/

"The suit claims that employees engaged in "unlawful and fraudulent conduct, including opening customer accounts and issuing credit cards without authorization" and that the bank "has known about and encouraged these practices for years."

If that last part proves true, I would expect some of the top executives to lose their jobs and possibly even face criminal charges.

Thanks for posting that link;

CEO John Stumpf made $19.3 million in compensation in 2015. That makes him one of the top-paid bankers in the United States as he has been for years, along with these others: JPMorgan Chase (JPM)'s Jamie Dimon, Bank of America (BAC)'s Brian Moynihan and Lloyd Blankfein of Goldman Sachs (GS).
Eric Schiffer, a management consultant with more than 600,000 followers on Twitter, tweeted that Stumpf should be held accountable.
Stumpf, and his predecessor Dick Kovacevich, are well-known in banking circles for leading the bank's efforts to cross-sell, or get customers to sign up for more and more accounts, with Wells Fargo.

That made it very clear where "The Buck Stops

[Outlander Systems]

I can't wait until banks ban cash, and implement negative interest rates.

[boltcatch]

So the people get robbed and the gov makes a huge profit ?

It's even worse.

For years now the .gov has been cutting deals where the fine gets reduced - say, 50 mil instead of 100 mil - if they give the entire amount to some designated third party - which, of course, will be some lefty pet cause that is politically active. That money ends up in Dem political coffers, or in the pockets of paid protesters and "community organizers".

It's a simple shakedown, whether the violation was real or not.

[_Stormin_]

#NotPubliclytraded

#ThatHasNothingToDoWithThis

#HashTagsDontWorkInBBCode

[HKGuns]

#Wanttobet

[_Stormin_]

Well, I've posted actual logical explanations of why dishonest people manipulated a system to make money. You've posted nothing. I'm pretty confident that there is no need to "bet" anything. They terminated 2% of their global workforce due to this one. It's all SCALE and people don't have the sense to realize that the local credit union or even a *gasp* LOCAL BANK could terminate 2% of it's workforce for dishonest practices and NOBODY WOULD NOTICE BECAUSE IT WOULD BE LIKE SEVEN PEOPLE, and that's at a big one.

There are dishonest people in all walks of life. Some of those people find their way into consumer finance, many because you can actually make a really decent amount of money working 8-6 Monday to Friday, with every holiday off. Some of those people realize that they can make much more money if they don't bother with "morals" and "ethics" getting in their way. Usually internal controls weed these people out very quickly. Sometimes there is an institutional problem, and the greed spreads like a cancer... I have spent almost a decade in the very field we are referencing (granted, more on the investment side of things, but consumer financial services) and knowing people at every bank and credit union I've dealt with, I'd confidently say that I'm pretty damned close to what one might call an SME on what goes on in consumer financial services. 98% of Wells' work force is still going to work tomorrow morning because they're good, honest, hard-working people.

[austinN4]

http://www.bloomberg.com/news/articles/2016-09-14/stumpf-the-mr-clean-of-banking-finds-himself-mired-in-scandal

Stumpf, the Mr. Clean of Banking, Finds Himself Mired in Scandal


**********************************************************************

http://www.bloomberg.com/news/articles/2016-09-14/how-sales-targets-encourage-wrongdoing-inside-america-s-companies

How Sales Targets Encourage Wrongdoing Inside America’s Companies
The Wells Fargo bank account scandal is just the tip of a very old iceberg.

[Eurodriver]

Wells Fargo story time: I opened a WF account <2 months ago. I am moving and use a local CU but needed a national bank for when I'm no longer near my CU. I opened a checking account only. About a month ago I closed on some vacant recreational land, and wired the proceeds to the title company from this WF account. They tried hard, during the wire transfer, to get me to open a savings account. I said no. I do not even have a debit card with WF. It is strictly temporary to hold my cash/receive direct deposits til I get settled elsewhere.

Well, the wire got "lost" and the title company was asking me where it was. This was on a Wednesday. I called the WF Wire Services line and asked for the Federal Reference #. Home boy on the phone said "I don't know what that is, but can I recommend some additional banking products WF can assist you with?"

:angry: "Mother****er, you work in wire transfer services and you can't find my expensive wire transfer but you're trying to get me to buy more stuff with you guys?" I hung up. I received calls from WF on Thursday, Friday, and Saturday offering me banking products.

Finally the wire showed up on Monday, and then I promptly closed my WF account. Or did I? :mad:

[Averageman]

Wells Fargo story time: I opened a WF account <2 months ago. I am moving and use a local CU but needed a national bank for when I'm no longer near my CU. I opened a checking account only. About a month ago I closed on some vacant recreational land, and wired the proceeds to the title company from this WF account. They tried hard, during the wire transfer, to get me to open a savings account. I said no. I do not even have a debit card with WF. It is strictly temporary to hold my cash/receive direct deposits til I get settled elsewhere.

Well, the wire got "lost" and the title company was asking me where it was. This was on a Wednesday. I called the WF Wire Services line and asked for the Federal Reference #. Home boy on the phone said "I don't know what that is, but can I recommend some additional banking products WF can assist you with?"

:angry: "Mother****er, you work in wire transfer services and you can't find my expensive wire transfer but you're trying to get me to buy more stuff with you guys?" I hung up. I received calls from WF on Thursday, Friday, and Saturday offering me banking products.

Finally the wire showed up on Monday, and then I promptly closed my WF account. Or did I? :mad:

There is a point when incompetency can start costing you money. How would Wells Fargo have reimbursed you had the deal fell through because they just didn't act with a sense of urgency to get the money from you and to the seller?
The Consumer has little recourse for restitution when the .gov say's someone is to big to fail.
I will believe Wells Fargo has had some pressure applied when I begin to see a full accounting of what happened, what charges they are facing and an audit by both the .gov and a private accounting firm with a deep knowledge base on how these crimes are committed.

[austinN4]

The Consumer has little recourse for restitution when the .gov say's someone is to big to fail.

As in dealing with any other business, your recourse is via civil suit if you have been financially harmed.

[titsonritz]

Wells Fargo gets hit where it hurts (http://www.msn.com/en-us/money/companies/wells-fargo-gets-hit-where-it-hurts/ar-BBw93kN?li=BBmkt5R&ocid=spartandhp) :haha:

[Averageman]

Wells Fargo gets hit where it hurts (http://www.msn.com/en-us/money/companies/wells-fargo-gets-hit-where-it-hurts/ar-BBw93kN?li=BBmkt5R&ocid=spartandhp) :haha:

From that article;
Shares of Wells Fargo dropped $1.58, or 3.3%, to $46.96 Tuesday after the bank continues to be in damage-control mode connected with its settlement with the Consumer Financial Protection Bureau. The fine is only a tiny fraction of the company's annual profit. But the stock declines brings the market value of Wells Fargo down to $236.9 billion, a 21% decline from its nearly $300 billion value in mid-July.

Hmmm, I'm guessing fines, not so much, screwing account holders not so much, but losing 60 Billion for participating in some Malarkey to falsify some new accounts?
Yeah, a bunch of higher up's will be looking for new jobs.