Bad banker behavior needs big repercussions | Hour 1

What's going on? Thank you so much for listening to this podcast. It is heard live every day from noon to three on WBT radio in Charlotte. And if you want exclusive content like invitations to events, the weekly live stream, my daily show prep with all the links, become a patron, go to the Pete calendar show.com. Make sure you hit the subscribe button, get every episode for free right to your smartphone or tablet. And again, thank you so much for your support. Alrighty. So I have a couple of stories about big banks behaving badly. And my personal opinion is there probably needs to be. Big ramifications, big repercussions. And I'm not talking about a big dollar fine, which Bank of America picked up. So first off, the details of the story, which is that Bank of America this week was fined $ 1. 2 billion for, as the Cox Media Group National Content Desk reports over at WSOC-TV, they were fined $ 1. 2 billion for overlooking money laundering. Overlooking money laundering. I just didn't see it. Or we did see it and we just kind of looked right past it because, you know, it's in our bank and we're making money off of it. Right. Might that be a motivated reason why you may, quote, overlook something? So they overlooked money laundering and other customer transactions between the United States and other countries, including Mexico, Russia, and Belarus. Federal regulators say that Bank of America, the second largest bank in the United States, failed for years to report more than $ 5 billion in suspicious transactions. So this is actually a law that if you are a bank and you see suspicious activity, then you're supposed to fill out a form. You're supposed to report it. In fact, it's called the Suspicious Activities Reporting. So you're supposed to be doing this. But apparently, for years, Bank of America has not been doing that on certain suspicious activities. According to a news release from the U.S. Treasury Department, the penalty is the third largest ever levied by the agency. $ 1. 2 billion fines. For failing to report $ 5 billion in suspicious transactions. More than a billion of the unreported transactions included Chinese money laundering networks, as well as activity tied to the southwest border of the United States. So, human trafficking, drug trafficking, cartel operations, that's what was being laundered through Bank of America. That overlooked it for years. Even after the Treasury Department warned Bank of America, wait, what? B of A was warned about this? So they were overlooking this stuff. They were warned, hey, this stuff's going on, and Bank of America's like, thanks a lot, GovCo, we appreciate it, and then proceeded to continue to overlook it? Two years ago, they were warned. They were told to be more vigilant about suspicious activity. Transactions, though, continue to flow, according to the New York Times. Scott Besson, Treasury Secretary. He said today's actions send a clear message that even the biggest financial institutions are not above the law. Are they? But aren't they really? They got they got a fine. They got a billion dollar fine. Meanwhile, what was that $ 5 billion worth of laundered money? What was all that about? What was that being used for? What operations were being done with that money? Who was harmed, right? If you're human trafficking, you're flooding the border with illegal aliens, you're maybe killing and raping some of them along the way. Or maybe it was drug traffickers pumping all of the fentanyl into America. Maybe you were helping with that. But you got a fine, right? So, yes, I guess no one's above the law if you can pay the fine, if the corporate entity can pay the fine for actions of the staff, of the people who are at the institution that were not doing the overlooking of the suspicious transactions. Now, Bank of America. Neither admitted nor denied the accusations, according to The New York Times. So it's sort of an Alford plea there, right? Uh, we're not, we're not agreeing that we did this thing. We just know you got enough evidence. So we're just going to pay a fine. This news prompted an open letter from a man named Everett Stern. And I had not heard of this fellow before. And it goes back to 2010. Um, when he first kind of made some ripples in the news cycle. And I admit, I don't remember this story, but he used to work at HSBC, right? I think that's the HSBC, right? Big bank. And he wrote this open letter to secretary Besant. And he says back in 2010, he was a compliance officer for this bank. And, He says from a back office in Newcastle, Delaware, I watched billions of dollars move to drug cartels, sanctioned regimes and terrorist organizations, the enemies of the United States. I documented it. I escalated it inside the bank. And when the bank would not act, I took it to the FBI, the CIA, and eventually the SEC. The result is, was a $ 1. 92 billion settlement. So once again, a fine, this time almost $ 2 billion. At the time, it was one of the largest in American history. Probably still is. It was also about five weeks worth of the bank's profit. So for Bank of America, fined $ 1. 21 billion. Is that about a month of profits? So one month's worth of profits for laundering five, or not, they didn't launder it. They just overlooked the laundering. Let me be clear. And they admit no wrongdoing in any of this, but they'll pay the fine. What is that, like a week or a month's worth of profits? Not one banker was ever charged back in 2010 when Everett Stern blew the whistle. No one was charged. No one went to prison. I, however, paid a different price. I lost my career. I lost my savings. I lost my place in the industry that I had worked in and trained for. I got blacklisted. Every door in American finance closed at once. I slept on a camping cot in a 300-square-foot apartment because I could not afford a bed. And I waited tables at P.F. Chang's. I tell you this not for sympathy, he says, but so you understand that I know exactly what it costs to do the right thing in American finance and exactly how little the system does in return. I made that sacrifice because I believed it would change something. 14 years later, once again, this time Bank of America, no one charged. In other words here, he says, the fines are not working. They're not sufficient. The fines are not prompting different behavior. And when somebody inside the industry blows the whistle, they end up like Everett Stern, sleeping on a cot, waiting tables at a local restaurant. They lose their career. They're blacklisted from the industry. He says the fine, by the way, well, that's paid by shareholders, right? It's absorbed by the balance sheet, and it's forgotten by the very next earnings call. Bank of America reported earnings this week. Nobody who set the alert thresholds, nobody who decided the 2024 cease and desist could wait, nobody who chose the backlog over the law, none of them will lose a single thing that they value. They all keep their jobs. Everybody that was supposed to have done something to watch out for this, to stop it from happening, to alert the authorities, right? Their lives are untouched. That's the entire reason that this behavior repeats itself. The people are not persuaded by a fine that the company swallows, that the shareholders pay for. The holidays will be here before you know it, and so now is the time to create precious and priceless family heirlooms that will last for generations. Take your old photos, slides, films, and tapes to create a video in Mint Health. 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All right, let me jump over to the text line. And first up here, Ed asks, who does B of A pay the fine to and what is that money used for? They pay it to the, as far as I know it, they pay it to the U.S. government. Not sure what it's specifically used for, if it goes to fund, you know, the Treasury Department or what, but That's who pays the– or that's where the money goes to the government. And it's spent already. Yeah, what, a billion-dollar fine will pay for what, like 30 seconds of operations. For the U.S. government? Let's see. Rodney says, if I had a business that laundered money, I would be shut down and sent to prison. So why aren't Brian Moynihan and Bank of America shut down, dissolved, and him sent to prison? Well, I mean, this is what Everett Stern, the whistleblower, this is what he says has to happen. It's like the people who work in the finance industry that allow their institutions to be used for illegal activity that is dangerous to America, particularly when they are told, right? when they're just ignoring things after they are warned about those things, then people need to go to jail. That's what he says. And if some people go to jail, this will stop happening. Next up here is Michael. I'm curious how much B of A made off the $ 5 billion in transactions. Generally, it seems banks pay a fine less than what they made from the activity. Seems the government uses banks as a piggy bank if they need money, assess a fine, but not enough to curb the behavior. Right, well, part of this is also that like, okay, so what do you, do you find them so much money that they go out of business? Too big to fail, anybody? Because then what about. All the people like you or me or like, I don't bank with Bank of America, but Um, what about all the people who do bank with bank of America? What if they fail? Right. Then the government has to come in and, and pay out all of the FDIC insurance claims and stuff. They have to make people whole as much as they can on their lost, uh, savings and checking accounts and all of that. So yeah, that's too big to fail. So if the fine isn't going to be enough to discourage this kind of, uh, Then what other tools does the federal government have? Holding people personally accountable for not doing their job, for allowing illegal activity to be processed through their institution. That's what Everett Stern is arguing for. Beth's favorite Russ interview. There are enough stories like this B of A one in banking, pharmaceuticals, and some other industries that it makes it seem like this is just part of the business model. Knowingly or carelessly skirting the law, making multiple billions in revenue, pay a small percentage of that revenue in fines, the balance sheet has still grown. Without firings, penalties that actually hurt, and even jail time, it will continue. Jeff says the banks are too big to fail. So big government just finds them and lets them move on. Yep. Pretty much. Um, Jeannie says after many buyouts, my mortgage ended up with bank of America. Uh, it got to the point where I had to go into the bank to make my payment because any extra payments I would make, they would try to add it to the interest, not principal. Many times I stood at the window and told the teller, apply the extra payment to the principal and, And I would look at the receipt before I left and sure enough, they neglected to do it. So I would have to point it out to them, spend my time talking to a bank officer about how the teller neglected to apply my payment correctly. I've told anyone who listened, stay away from Bank of America and Wells Fargo, legal thieves and felon. Sad that it is this way. You know, you should always be paying ahead on your mortgage towards the principal. And I was not, this is the first I've heard that, a bank would not apply it. And this happens repeatedly to you. Like that's, that does not seem to be like a, a single mistake. Um, but I don't know. Uh, Newcastle, Delaware, John says, isn't that Joe Biden's home state? Yes, it is. Uh, but look, Delaware, you know, a lot of, uh, businesses incorporate in Delaware because of the tax advantages there. Um, Gary says they, uh, they, I guess that means there are plenty of people that have went to jail for much less with crypto and Bitcoin. They need to punish the people that knew and overlooked the money laundering and forced the banks to break back up into regional banks. Yeah, I am not an expert on the regional versus national banking and all of that stuff. I mean, I can see some advantages to a national bank, although like I don't even like, I don't even use ATMs anymore. Seriously. Like with, I just, you know, with credit cards now, I use the credit card, pay it off every month. Like I don't use debit cards because they were so, you know, hackable or, or, you know, susceptible to thievery. You know, in this way, if this is what I was advised a long time ago by somebody in the finance industry. And they said, do as much of your regular work, accounting and billing and, and, you know, all of that in your, your home budget, do as much of that spending on a credit card as possible, but pay the credit card every month, right? Like I'm not advocating you run up debt. Debt is worse. Okay. But here's the key is that if you're doing things via the credit card and, you know, automatic draft, direct deposit, that kind of stuff is fine. But like you're spending purchases and all that, you do these things on the credit card because the banks watch that because that's their money. So if somebody gets your, your credit card number, you get alerts like almost immediately. This is suspicious activity. Did you make this purchase? Right? You get those things. If it's a debit card, well, that's your money, you know, that's your money. And it's, it just seems to not be as high a priority for some entities. And so, If that card gets stolen, if that number gets co-opted somehow, then you have to fight it. The money's out of your account. You can't access it. Eventually, if it gets sorted out, yes, you'll get the money back. But in the meantime, you may not have any money in your bank account, right? So it's just, it's a safeguard. My advice to you, although I am not legally qualified or certified in any way, shape, or form to offer any kind of financial advice. That was just told to me and I've been doing it for decades. I don't know, a decade now. All right, real quick. Every government number gets revised, right? Every projection gets walked back. Gold does not file corrections like GovCo. Revelation Gold Group helps families hold physical gold and silver, including in a tax-advantaged gold IRA. It's real. It's in your name. And 10 Minutes tells you if your retirement account qualifies. If you want to learn more, go to calendarmetals.com. That's calendarmetals.com. There is a link in the podcast description. Or if you want to talk to somebody, you can call 888-465-3049. All right, let me go back to the text line. People are still commenting here. Join a credit union, leave the banks. Yes, we are in a credit union as well. Thank you, Chris. Jeff says, I second what you are saying on the credit card usage. I simply use my credit card for rewards and then I pay it off. By month's end. Got plenty racked up. Yes, that's the other benefit of using the credit cards is you get all the rewards points and stuff like we, you can put it towards miles or cash back, that sort of thing. If your debit card gets hacked, it takes a while to fix it. But since a credit card involves somebody else's money, it gets corrected instantly. Yes. Don't tell Dave Ramsey. Yeah. Well, that's the thing. If you abuse the credit card, if you don't pay it off every month, right, then you're going to be charged the interest, and that's how you get further and further into debt. That's not good. That's why I said paying off debt is the most important thing you can do. Do not live beyond your means. There was a book back in the, gosh, late 80s, early 90s, that I remember reading. It was, you know, it was like one of those, one of those books that you find in the bathroom, you know, like they're really small. They're like, you know, six inches wide by four inches tall. Very, very small book. And each page has just like one little nugget of wisdom. And it was called Life's Little Instruction Book, I think was the name of it. And one of the tips was, Own the nicest house you can afford and drive the cheapest car you can afford. Right? In other words, the house is an appreciating asset. The vehicle is a depreciating asset. And you live in the house. And you can see people who make these bad choices. We've all seen them. Run down homes that they live in. And then they got these super sweet vehicles parked out front. I've never understood that. It doesn't make any sense to me, but to each their own. Robert says, I use a credit card for just about everything we can for the same reasons you mentioned, but also we get a percent and a half back cash back on everything we put on the card. So typically we're making five to $ 600 a year in cash back just for using the card and we pay it off every month. Kevin, for sure, put everything on credit cards unless they charge a fee for doing so. Yeah, you want to make sure about that too. Like you want to make sure that you're not getting charged if you pay off the balance every month and stuff like that. And that's another issue where you get charged. Like if you're using a debit card and you go below a certain amount in your checking account or something that it's drafting out of, right? You use your debit card and Like a lot of banks, you have to carry a $ 1, 000 or $ 1, 500 minimum, which basically means you can't use it. So you give the bank a grand, and then it's just sitting there. Because if you go under $ 1, 000, you make a purchase with the debit card, and you go under $ 1, 000, now you get a fee for that. So let's see here. Getting that 2% to 5% cash back adds up pretty fast when it's all of your spending. All your cards, including your bank cards and debit cards, should have text alerts turned on if you haven't already. That's a good piece of advice. JC says, Pete, off topic, but first day of early voting, I saw this sign. Not sure you get pics on this. We do get pictures on the text line. Yes, and it's a vote against sign. Yeah, that's the... That's the lefties, the leftist groups in North Carolina, Democrats. They don't want you to vote yes on the ballot referenda. I've covered these three ballot initiatives that we are voting on. These are constitutional amendments. One is voter ID, make it applicable to absentee ballots, uh, as well codifies it into the, into the state constitution, which makes it harder for Democrats to repeal it. That's the point. Um, Number two is property tax or a levy limit. So you've got cities and counties around the state that have been jacking up the property tax rates, you know, 15% annually. And this puts into the Constitution a levy limit process that will be determined. But the formulas usually look like you take the percentage of population growth for the county or city. You take the inflation rate. You add those two together, and that's the most that the local government could raise the property taxes. So, for example, if you get 1% population growth, you get 2% inflation. That means 3% would be the max that the local government could raise the property tax rate. And Democrats don't want this. They want to be able to raise your taxes more. There's also the cap on the income tax rate to take it from 7%. down to three and a half percent again, constitutional amendment. So Democrats cannot come back and change this cap without going back to the voters to ask for it. And their arguments for this is that we, we need to be able to raise taxes. At some point. We don't know when, as soon as we take control, but like, we don't know when, but like, what if there's a financial crisis, we're going to need to raise taxes. It's like, that would be the absolute worst time to raise taxes on people is during a financial crisis or a natural disaster right this is what democrats they use any of these types of events in order to justify tax increases and then of course they also want to do they want to reinstate a progressive tax rate too so this is all about putting it into the constitution that these things are capped um And that's why Democrats are opposed to it. So my recommendation, how I'm voting, I'm voting yes on every one of those ballot initiatives. And Mark says, I live in the Weddington area. Just did early voting. I was in and out in 10 minutes. I will state what most of us know, the lack of Republican candidates. But can you. Speak– in a little more detail, literally zero Republicans on the ballot other than at the state level. This can't all be gerrymandering and racial population. Thanks for any insight. Okay. So you're in, Oh, you're in Matthews. I live in the Weddington area, Matthew zip code, right? So if you're in Mecklenburg County, it's not clear what you're saying because Weddington is not Mecklenburg County. As far as I know, unless something has changed recently. Right. Weddington is still Union County as far. Right. OK, so we're all clear on that just to make sure. OK. But if you're in Mecklenburg County, yeah, all the judicial races. There aren't any Republicans running. They're all Democrats. That's Mecklenburg County. We are a Democrat controlled jurisdiction. There are not enough Republicans to win these types of races. And when you're talking about judge races, there's a whole other dynamic going on there, too, because, you know, you generally don't want to be a lawyer that runs against a judge that you have to appear before. You know, that's not great. So there's that element as well. 330 number says they get all the credit card protections. Yeah. On your MasterCard branded debit card. All right. Well, good for you. That's good. Having cleared out the text line, let me get back to this piece here from Everett Stern, an open letter to Treasury Secretary Scott Besant. Stern was the whistleblower. He was a compliance officer at HSBC back in 2010. He blew the whistle on billions of dollars that were moving through the bank that was in accounts that were run by drug cartels, sanctioned regimes and terrorist organizations. In other words, America's enemies. He went up the food chain in the bank. Nothing happened. He went then to the FBI. He went to the CIA. He went to the SEC. Eventually, the bank had to pay out a $ 1. 9 billion settlement. He lost his job and was blacklisted from the entire finance industry, lost his house, ended up sleeping on a cot in a 300-square-foot apartment because he couldn't afford a bed, and he was waiting tables at a P.F. Chang's. That's what happened to him when he blew the whistle on this kind of overlooking, shall we say, right? Because Bank of America just got nailed with a $ 1. 2 billion fine for overlooking money laundering and suspicious customer transactions, including, you know, from Mexico, Russia and Belarus and China. So he says in this letter that basically the fine gets paid by the shareholders and it gets absorbed into the balance sheet and then it's forgotten by the next earnings call at the bank. Okay, so nobody who set the alert thresholds Nobody who decided the 2024 cease and desist could wait because they were told Bank of America was told cease and desist, but. Apparently they didn't. Nobody who chose the backlog. Over the law will lose a single thing they value. He says their lives are untouched and that's the entire reason the behavior repeats. This is money laundering. This is blood money. Money that reaches a cartel buys fentanyl that kills Americans. Money that reaches a terrorist organization buys the next attack. There's also a question of equal justice that I cannot let go. Every day in this country, people go to prison for crimes that are nothing next to moving money for the people who want Americans dead. A suit, a title, and a corporate badge should not be a shield from the consequences that apply to everybody else. If a street dealer goes to prison for what he sells, the banker who moved the cartel's money should be standing next to him. He says I also want to raise something that is rarely said in these conversations. Why has no one inside Bank of America come forward? Why were there no whistleblowers inside B of A on this? The answer is everyone in American banking knows what happened to me and to the whistleblowers who came after me. The last person who spoke up is the only policy anyone believes. Right? Look at what just happened with B of A. A $ 1. 2 billion fine, no admission of wrongdoing, nobody in trouble, nobody goes to jail. Nobody apparently even fired. No personal fines. So what do you think the employees of B of A think the punishment is for overlooking these types of crimes? Nothing. Right? If you blow the whistle, well, there goes your career. There goes your house, your car, maybe your family, right? You lose everything. That's what they believe in. He says that's a culture problem, and it starts with leadership in the banks and in the agencies that regulate them. This is not a political issue. It has spanned administrations of both parties. It is a national security issue, and I am asking you, Scott Besant, to treat it as one. Three things would change the math overnight. Number one, refer individuals for criminal prosecution, not the analyst in the queue, the executives who set the thresholds and chose the risk. One banker in handcuffs would do more than every fine in the U.S. Treasury's history combined. Number two, end this concept of too big to jail. An institution cannot be too big to fail and too big to jail at the same time. If it is the first, too big to fail. It must be held to a higher standard, not a lower one. You cannot do both. And number three, if Bank of America will not act as America's bank, review its charter. A national charter is a privilege granted on behalf of the American people. It should be conditioned on not moving money for the people trying to kill them. Besson said no one's above the law. He says, with respect, the institution was never the problem. The people inside it are above the law, and they know it. Until that changes, I will keep writing letters like this one, and the next bank will keep paying the next fine. That's again from Everett Stern, the HSBC whistleblower, founder, and intelligence director of Tactical Rabbit. I have no idea what Tactical Rabbit is, but I gave him a follow on Twitter. All right, that'll do it for this episode. Thank you so much for listening. I could not do the show without your support and the support of the businesses that advertise on the podcast. So if you'd like, please support them, too, and tell them you heard it here. You can also become a patron at my Patreon page or go to the Pete Kaliner show dot com. Again, thank you so much for listening and don't break anything while I'm gone.