[GJM] An incredible fraud........and an on-going fraud???

[robert searle]

Dear All,

      I have heard rumours, and perhaps others also
that thieves (working with bank insiders presumably)
have been take very small amounts of money from
various transactions, and accounts. Obviously, if this
happens on a daily basis the resulting funds can
become huge over a short period of time. Naturally
enough, the customers of the banks, and the banks
themselves hardly notice a thing..because the amounts
are very small!!! This I suspect goes on, and on..and
even if it becomes known little can be done about it.

Ofcourse, if banks are not the culprit, or party to
some fraud (as with the above to a large
extent)anything which is untowards is usually dealt
with internally with zero publicity...otherwise
clients would start to wonder, and may withdraw their
money!!!

R.Searle.



--- Rodney Shakespeare
<rodney.shakespeare1 at btinternet.com> wrote:

> 
> Dear All,
> 
> The article below was posted on the gang8 list.
> 
> The developing global financial crisis is certain to
> reveal fraud after fraud but this one is incredible
> -- the Wachovia Bank bank (USA's fourth largest
> bank)  knew, and knew on a large scale, what was
> going on for years but chose to let the fraud
> continue because the Bank was making a lot of money
> out of it!
> 
> Articles often try to get the big news up at the top
> of an article --but  the detail of this one one
> seems to get worse and worse as you read on down.
> 
> Rodney Shakespeare
> ----------------------
> 
> 
> Papers Show Wachovia Knew of Thefts
> By CHARLES DUHIGG
> New York Times: February 6, 2008
> Last spring, Wachovia bank was accused in a lawsuit
> of allowing fraudulent
> telemarketers to use the bank¹s accounts to steal
> millions of dollars from
> unsuspecting victims. When asked about the suit,
> bank executives said they
> had been unaware of the thefts.
> 
> Enlarge This Image
> 
> But newly released documents from that lawsuit now
> show that Wachovia had
> long known about allegations of fraud and that the
> bank, in fact, solicited
> business from companies it knew had been accused of
> telemarketing crimes.
> 
> Internal Wachovia e-mail, for example, show that
> high-ranking employees at
> the nation¹s fourth-largest bank frequently warned
> colleagues about
> telemarketing frauds routed through its accounts.
> 
> Documents also show that Wachovia was alerted by
> other banks and federal
> agencies about ongoing deceptions, but that it
> continued to provide banking
> services to multiple companies that helped steal as
> much as $400 million
> from unsuspecting victims.
> 
> ³YIKES!!!!² wrote one Wachovia executive in 2005,
> warning colleagues that an
> account used by telemarketers had drawn 4,500
> complaints in just two months.
> ³DOUBLE YIKES!!!!² she added. ³There is more, but
> nothing more that I want
> to put into a note.²
> 
> However, Wachovia continued processing fraudulent
> transactions for that
> account and others, partly because the bank charged
> fraud artists a large
> fee every time a victim spotted a bogus transaction
> and demanded their money
> back. One company alone paid Wachovia about $1.5
> million over 11 months,
> according to investigators.
> 
> ³We are making a ton of money from them,² wrote
> Linda Pera, a Wachovia
> executive, in 2005 about a company that was later
> accused by federal
> prosecutors of helping steal up to $142 million.
> 
> Ms. Pera left Wachovia in 2006, and could not be
> located.
> 
> Lawyers pursuing the lawsuit against Wachovia, which
> was filed in a
> Pennsylvania federal court on behalf of a woman
> named Mary Faloney and other
> apparent victims, have asked a judge to declare the
> case a class action,
> which could expand it to as many as 500,000
> plaintiffs.
> 
> The lawsuit alleges that Wachovia accepted
> fraudulent, unsigned checks that
> withdrew funds from the accounts of victims, often
> elderly. Wachovia
> forwarded those checks to other banks that were
> unaware of the frauds, which
> in turn sent money to the swindlers.
> 
> A judge is expected to rule on the class action
> request by this summer.
> Wachovia, in court filings, has denied the suit¹s
> allegations. The company
> declined to comment on the pending litigation.
> 
> However, Wachovia¹s senior vice president for risk
> management, Alan Chudoba,
> said that the bank introduced reforms aimed at
> telemarketing frauds last
> summer. Those changes, which came about after an
> article in The New York
> Times last May reported that thieves had used
> Wachovia accounts, include
> greater scrutiny of accounts used by telemarketers
> and stronger fraud
> protections.
> 
> In a statement, Wachovia said: ³Earning the trust of
> our customers is at the
> heart of what we do every day and we regret this
> situation occurred. We took
> this issue very seriously, and senior management,
> led by C.E.O. Ken
> Thompson, was actively involved in directing
> aggressive steps to correct the
> processes related to this situation. We are
> confident that the changes we¹ve
> implemented will help protect our customers.²
> 
> Some advocates cautiously applaud the bank¹s
> efforts.
> 
> ³This could be very good news for millions of
> consumers,² said Kathleen
> Keest with the Center for Responsible Lending, a
> group working to eliminate
> abusive financial practices.
> 
> ³But reforms tend to happen quickly in the light of
> publicity, followed by
> backsliding when the spotlight fades,² Ms. Keest
> added.
> 
> One of the lawyers handing the Pennsylvania suit
> said Wachovia should do
> more. ³I don¹t understand why, like other banks,
> Wachovia simply doesn¹t
> have a policy to avoid any business related to
> telemarketers,² said Howard
> Langer, of the firm Langer, Grogan and Diver.
> 
> A Wachovia spokeswoman said the bank was not
> currently working with any
> telemarketers, would review any future clients who
> do work with
> telemarketers, and would reject any client solely
> focused on telemarketing.
> 
> In the last three years, government agencies have
> sued several companies
> accused of routing telemarketing thefts through at
> least nine banks,
> including Wachovia, the largest company named in
> those lawsuits.
> 
> However, Wachovia and most other banks accused of
> involvement in similar
> frauds have never been publicly fined or prosecuted
> by federal regulators
> for aiding telemarketing criminals.
> 
> So some victims have turned to private lawsuits.
> 
> The Pennsylvania suit against Wachovia alleges that
> the bank¹s involvement
> with telemarketing thefts dates to October 2003,
> when Wachovia was warned by
> another bank that a Wachovia client named AmeriNet
> had tried to process more
> than $100,000 in improper withdrawals.
> 
> AmeriNet was a ³payment processor,² a company that
> creates unsigned checks
> on behalf of telemarketers to withdraw funds
> automatically from customer
> accounts. Such checks, once widely used by
> businesses collecting monthly
> fees, are legal if customers approve the
> transactions.
> 
> However, a Wachovia executive wrote to colleagues,
> evidence suggested
> AmeriNet was creating unapproved checks.
> 
> ³Keep in mind historically, telemarketing is an easy
> way to money launder
> and commit fraud. To knowingly bank a customer who
> is perpetrating fraud
> places the bank at great exposure,² wrote that
> executive, Tim Brady,
> according to documents that are part of the lawsuit.
> 
=== message truncated ===>
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