Wells Fargo to Pay $3 BILLION for Faking Accounts

Now it’s time to drill the investigation further — faking loan accounts in which the debtor owes no money to WFB either directly as owner or servicer or indirectly through other conduits or companies.

THIS JUST ONE EXAMPLE AMONG HUNDREDS WHERE THE MEGABANKS HAVE USED THEIR SHEER SIZE TO COMMIT ILLEGAL ACTS THAT WOULD PUT THE AVERAGE JOE IN JAIL. Here is Wells Fargo screwing both their own investors and their own customers over many years involving millions of accounts. The intended result was to artificially inflate the value of their stock trading on the stock market.

Just like inflating appraisals to get consumers to sign on the bottom line because the bank was no longer at risk and had everything to gain in trading and issuing derivatives based on the mortgages of unsuspecting consumers while selling fraudulent securities to unsuspecting investors.

If you go back to my articles starting in 2006, I said that a true investigation would reveal that both investors and borrowers were screwed in the same way. In both cases neither borrowers nor investors got what they bargained for. In both cases the borrowers and investors lost money. In both cases the bank made money on the way up and on the way down because they knew the appraisals were false and the terms could not be performed by borrowers whose income was less than the reset payments after the teaser period.

Such an investigation will yield very high results. And it will throw a light on Chase claiming WAMU loans, OneWest Claiming IndyMac loans etc. These all involve the fake creation of loan accounts in which the name of a Bank is used to hide the fact that there is no lender and no financial institution involved. It’s all about getting revenue from what is falsely presented as foreclosures. 

https://www.nytimes.com/2020/02/21/business/wells-fargo-settlement.html

From 2002 to 2016, employees used fraud to meet impossible sales goals. They opened millions of accounts in customers’ names without their knowledge, signed unwitting account holders up for credit cards and bill payment programs, created fake personal identification numbers, forged signatures and even secretly transferred customers’ money.

“This case illustrates a complete failure of leadership at multiple levels within the bank,” Nick Hanna, U.S. attorney for the Central District of California, said in a statement. “Wells Fargo traded its hard-earned reputation for short-term profits, and harmed untold numbers of customers along the way.”

As part of its agreement with the S.E.C., the bank will set up a $500 million fund to compensate investors who suffered when Wells Fargo failed to inform them that its community banking business was not as strong as the fake accounts made it seem. The money is included in the $3 billion settlement total.

 

Special note to stock watchers: If this ever catches up with the major banks and many smaller ventures like OneWest the liabilities could wipe them out of existence.

 

 

8 Responses

  1. Charles Reed – you don’t understand — the government doesn’t care. They NEED to save the banks to survive. 3 billion slap on the wrist – like a time out for a three year old.

  2. The Independent Foreclosure Review Board determined that Wells illegally foreclosed on the WAMU Fed Gov loans it was mortgage servicing. The OCC & Fed Reserve Bank eliminated the “No Standing” making the victims seek other avenues to get back the properties!

  3. PUT THE AVERAGE JOE IN JAIL- for the rest of his life

    Not bankers, nope

  4. You know – one thing about the financial crisis investors is whether they were stupid or greedy These investors wanted low and middle income victims to pay high interest rates for their pensions. Really ?? That makes zero sense. But the investors were bailed out. They got their principal back – they just lost a high rate of return that they wanted the low/middle income victims to pay for their retirement security. Hmmm. The victims either lost homes or are abused in courts.

  5. Agree with everything you state. My real question is… OK… the US. Govt. (or an Agency of it… in this case I believe it’s the SEC, but in previous cases I believe the FBI & the OCC also have allegedly received $millions). So let’s “follow the money”.

    In this case the SEC gets $3 Billion and has to set aside $500 million to pay back investors.

    The real “victims” seem to AGAIN be getting NOTHING.

    Am I mistaken in believing that it’s “We the People’s” money that pays the salaries, the rents on the buildings, the electric and other utilities for, buys the cars used for their transportation gives them tax breaks for their clothing and probably (along with all those paid Holidays & better Health Care than WTP get) buys their shoeshines and haircuts too for ALL the employee’s of the entire SEC?

    If “We the People” are paying for their everything they can possibly need to do their “JOB”… then what’s up with the SEC STEALING $2.5 Billion from us? Where is it going?

    And I have this question for EVERY fine and penalty the Banks have allegedly paid since FOREVER… or are they all actually just invented cover up stories that are supposed to make “we the People” think that our Legal Industry is actually doing “their Job” when in fact it’s all just smoke and mirrors and the Judges and Lawyers are getting Rich, the Govt. Employee’s are getting Rich and “We the People” are once again just getting screwed? Where’s the money? “We the People pay massive amounts of taxes just for computer systems that are supposed to be being used to track these things. Where’s the damn moneyu? It certainly isn’t coming off of our National Debt.

  6. Neil your analogy of the fake accounts that Wells Fraudgo is being fined for, as opposed to the mortgage accounts with which they did the same thing, is a great analogy, and driven home in such a short, concise post.
    Nice work !

  7. So, they are going to compensate the “investors”? What about the consumers, where they ruined their credit, damaged their reputations and stole their money? The same business, over and over. When is someone going to held liable for our losses? How is it the people injured are never meaningfully included in these settlements? This defies every legal principle…logic.

  8. Paid for 10 years until WF came in out of nowhere as Servicer and started paying property taxes which were paid directly by us at the time. They were able to get the corrupt clowns wearing a robe to go along with their theft and stole the townhouse and 100k in equity. 1000x12x10= $120,000 plus $50,000 deposit in 1999 = $170,000 paid on $175,000 purchase in 10 years. Never late. And Yet house still stolen. No one would stop the theft and listen to the facts. So, Just in case why anyone still wonders why I laugh at this country as being free. Just a Bunch of cowards afraid to stand up and fight the Banksters. Especially the lawyers. And John Stumpf I haven’t forgotten your name !!

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