Inner City Press' Bank Beat Reporter


     Welcome to Inner City Press’ Bank Beat.  We aim to scrutinize the industry, from high to low. Our other Reporters cover Community Reinvestment, the Federal Reserve, and other beats.   ICP has published a (double) book about the Bank Beat-relevant topic of predatory lending - click here for sample chapters, an interactive map, and ordering information. The Washington Post of March 15, 2004, calls Predatory Bender: America in the Aughts "the first novel about predatory lending;" the London Times of April 15, 2004, "A Novel Approach," said it "has a cast of colorful characters." See also, "City Lit: Roman a Klepto [Review of 'Predatory Bender']," by Matt Pacenza, City Limits, Sept.-Oct. 2004. The Pittsburgh City Paper says the 100-page afterword makes the "indispensable point that predatory lending is now being aggressively exported to the rest of the globe." Click here for that review; click here to Search This Site. Click here for Inner City Press' weekday news reports, from the United Nations and elsewhere, which include bank-related topics.

Click here for Inner City Press' weekday news reports, from the United Nations and elsewhere. Click here for a recent BBC piece on Inner City Press' reporting from the United Nations. New: Follow us on TWITTER  Click for March 1, 2011 re Libya, Sri Lanka, UN Corruption by Inner City Press.  Until next time, for or with more information, contact us.

February 26, 2024

Amid Attack on CRA FirstSun HomeStreet Bid Hit on Lending Disparities and Data Breach

by Matthew Russell Lee

SOUTH BRONX, Feb 23 – As US bank regulators talk about working to increase the fairness of the financial system, and closely scrutinizing mergers and the spread of bad practices, banks continue to assume they can combine.

  Before this week's Capital One - Discover proposal, and ABA lawsuit against the Community Reinvestment Act regulation, there was  FirstSun Capital Bancorp of Denver and Dallas saying it will merge with Homestreet, Inc. and Homestreet Bank of Seattle, Washington. 

  On February 23 Fair Finance Watch with Inner City Press on the FOIA filed with the Federal Reserve: "FirstSun's flagship Sunflower Bank, in Texas in 2022, made 694 mortgage loans to whites, and only 41 to African Americans. Meanwhile it denied 12 applications from African Americans, and only 34 from whites.   This is disparate, and more disparate both than the aggregate in Texas. 

    Nationwide in 2022, Sunflower Bank made 3059 mortgage loans to whites, and only 194 to African Americans. Meanwhile it denied 49 applications from African Americans, and only 259 from whites. 

   For the record, on managerial resources and otherwise, note that on September 27, 2023, FirstSun Capital Bancorp, the parent company of Sunflower Bank, Guardian Mortgage and First National 1870 (collectively, “Sunflower”), filed a notice of data breach with the Attorney General of California... an unauthorized party likely took advantage of the flaw in the MOVEit software and downloaded copies of files [containing] personally identifiable information."

   HomeStreet, meanwhile, is politely said to have had a "tough" 2023.

     FFW and Inner City Press have been deeply concerned about the rush by the Federal Reserve to rubber-stamp mergers by redliners, money launderers and predatory lenders. This has been killing the Community Reinvestment Act and so a timely request public hearings.

February 19, 2024 4

Zilberberg Guilty of Bank Fraud After TARP Subpoena Shown Now US Wants 4 Years

By Matthew Russell Lee, Patreon Maxwell book

SDNY COURTHOUSE, Feb 9 – Mendel Zilberberg was indicted for bank fraud while he was a board member of Park Avenue Bank. His trial was to start on January 23, 2023 - but actually began on July 5, 2023. Inner City Press was there - all the way to the verdict: " JURY VERDICT as to Mendel Zilberberg (1) Guilty on Count 1,2,3,4,6." Sentencing is scheduled for November 29, 2023, before Judge Daniels.

Back on January 11, 2023 U.S. District Court for the Southern District of New York Judge George B. Daniels held an in-person final pre-trial conference.  Inner City Press went to cover it.   

But even as the next defendant, in a gun case, had his family setting up in the gallery, in the well of the courtroom Zilberberg's lawyer Ben Brafman was conferring with the prosecutors.

   When Judge Daniels took the bench, the parties asked for an adjournment, in light of 20,000 pages of FDIC documents just produced. No new trial date was agreed. Instead, a March 28 pre-trial conference was scheduled. 

 Judge Daniels asked about a related loan, to Zilberberg's niece.

 The prosecutor emphasized that she was a special education teacher, and did not have a business for the business loan. Judge Daniels said it might be cumulative, and/or prejudicial. 

 Brafman said the jury could be confused by the issue of taking advantage of a younger relative. Judge Daniels asked for a letter.

  Brafman wrote in the Loan 2, the Niece Loan, "has little, if any, probative value."

 On March 21, Judge Daniels had a final pre-trial conference and largely agreed, unless the door is opened during the trial to this loan. The trial was moved up to July 5 for jury selection.

On April 10, co-defendant Aron Fried who pled guilty submitted a lengthy but redacted sentencing submission, including on medical condition, asking for a below guideline sentence. But how much below?

On April 13, the US Attorney's Office asked for 30 to 37 months.

On April 18, Inner City Press went to Fried's sentencing. There were more than a half dozen supporters in the gallery. Judge Daniels asked about what Fried knew, and when. Fried spoke of bone cancer and bad advice.

 Judge Daniels sentencing Fried to a year and a day. Lead defense counsel asked for home confinement - Judge Daniels said no but that he might reconsider if major (presumably negative) developments on health before the surrender date. Defense counsel asked for a recommendation of designation to Otisville.

On July 5 the trial began. Ben Brafman told teh jury to pay attention to his cross examination of the cooperator, and return with a verdict of not guilty. Then the US put on the stand a man who makes prosthetic limbs and who sought a loan from Park Avenue Bank.

On July 6, the prosecution put on the stand FDIC Examiner Todd Goodman and showed notes and his and the NYSBD's meetings with Park Avenue Bank, about loans in violation of Reg O and TARP subpoenas. Zilberberg was there.

On July 7, the prosecution put on a witness drilling down into particular loan applications which Zilberberg had pushed, based on "high credit score and debt service coverage ratio." Some jurors' eyes rolled. Elsewhere in the SDNY courthouse on July 7 Judge Jed Rakoff derided mandatory minimum sentences and the trial penalty they impose. The former doesn't apply here - so would the latter?

On July 10, the charge conference was held, with the AUSA asking to add to the jury instruction about being able to disregard the testimony of a witness found to have testified falsely, but Judge Daniels saying such an instruction might go too far.

And then the verdict: " JURY VERDICT as to Mendel Zilberberg (1) Guilty on Count 1,2,3,4,6.

On August 11 Zilberberg's counsel wrote to Judge Daniels that he "will reply on the record and arguments made as part of his Rule 29 motion and will not be filing post-trial motions in this matter."

On February 5, 2024, Zilberberg's counsel wrote in asking for a sentence of probation with a period of home confinement - then redacted. The submission does, however, mention the Binyan Adey Ad organization, and The Menorah Project of A TIME.

Days later, the US wrote in asking for a sentence of 48 months. Watch this site.

 This case is US v. Zilberberg, 19-cr-802 (Daniels)


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February 12, 2024 Before FNB Settled on Fair Lending Its Yadkin Merger Was Challenged But Fed Approved It

by Matthew Russell Lee, Patreon Book Substack

SOUTH BRONX, NY Feb 5 – When First National Bank of Pennsylvania applied to the Federal Reserve to buy Yadkin bank in North Carolina, Fair Finance Watch challenged it on Community Reinvestment Act and fair lending grounds.  

 The Federal Reserve, as usually, rubber stamped the merger.   Now in February 2024 the Justice Department had sued and settled with FNB on fair lending grounds.

Inner City Press had wanted to ask DOJ about the Fed (including in its recent Patriot Bank action), but has been unable so far.  Watch this site

February 5, 202424
NYCB Was Gifted Signature Bank Barney Frank and Cephas on Board Now Down 60% Rogues

by Matthew Russell Lee, Patreon Book Substack

SOUTH BRONX / SDNY, Feb 3 – With no public comment period, New York Community Bank has been handed the 40 branches of Signature Bank, to re-open them as braches of Flagstar, which NYCB bought in a proceeding delayed by fair lending problems.

  Back in April 2021, Fair Finance Watch and Inner City Press predicted that the proposed merger of New York Community Bank and Flagstar would flounder, on disparate lending and regulatory evasions. And it was delayed.

  So, a fair lending rogue benefited from a bail out, or a bank with a former NYS Banking Superintendent Derrick Cephas, and Barney Frank, on its board of directors.

 Jump cut to early February 2024 and NYCB's stock price fell by 60%, Valley National down too. We'll have more on this.
January 29, 2024 Family of Kansan Who Died After Iraq Captivity Sues HSBC with Secret Iran Witness

by Matthew Russell Lee, Patreon Book Substack

SDNY EXCLUSIVE, Jan 26 – The family of an American contractor who died in his native Kansas after release from kidnappers in Iraq has sued HSBC and other banks - but nearly all of the case is sealed.

  On January 26, 2024 a conference in the case was held. The discussion was about an anonymous Doe witness about information in the National Iranian Oil Company. 

  He cannot be questioned about any of the details of his work or where he got the information, for fear of retaliation from Iran. His testimony - sealed? - will be by Zoom, with him sworn in by name before the Court, then again without name before others. 

  Even the complaint in the case is sealed, as of January 27. Inner City Press, which has repeatedly asked the UN about its solicitude toward Iran, will continue to cover the case

January 22, 2024
US Sued Javice For Fooling JPMC Now Privilege Log by May for Oct 2024 Trial

by Matthew Russell Lee, Patreon Book Substack

SDNY COURTHOUSE, Jan 19 – JPMorgan Chase bought a start-up called Frank, which claimed to have 4 million students signed up to file their FAFSA forms, for $175 million. Then Chase learned Frank had only 300,000 customers.

On April 4, 2023, Frank founder Ms. Charlie Javice was brought before U.S. District Court for the Southern District of New York Magistrate Judge Barbara C. Moses

On July 27, the prosecutors wrote it to say they are unavailable on August 15, and that the Court said it would be available on September 20. But Javice will not consent to exclude Speedy Trial Act time until then. Letter on Patreon here.

On August 23, Inner City Press was there. Thread.

In January, after a hearing Inner City Press attended, Javice jaunty at the defense table, Judge Hellerstein docketed: "1. JPMC is to produce all documents in the possession or control of the custodians identified in Exhibit B to the transcript of argument, in all forms of media... 2. JPMC shall file by March 29, 2024 a complete and comprehensive privilege log consistent with the requirements of Local Rule 26.2. Defendants shall submit its objections directly to JPMC by April 30, 2024, and enter into conversations with JPMC to resolve issues of privilege. JPMC shall file a modified privilege log, reflecting the results of such conversations, by May 16, 2024. The Court will hear privilege challenges, via a privilege sampling procedure outlined in the transcript, on May 30, 2024 at 2:30 pm...  Final Pre-Trial Conference to be held, as previously set, on October 15, 2024 at 11 a.m.. trial, October 28, 2024."
In OneCoin Case Mark Scott Asks for 5 Years as US Wants 17 More Redactions Amid Appeal

By Matthew Russell Lee, Patreon Podcast Order

SDNY COURTHOUSE, Jan 20 -- For scam crypto currency OneCoin, Sebastian Greenwood who co-founded the company with Ruja Ignatova was sentenced to 20 years in prison by U.S. District Court for the Southern District of New York Judge Edgardo Ramos on September 12, 2023. Inner City Press was there and live tweeted, thread here

On January 19 Mark Scott, convicted at trial,  submitted a heavily redacted sentencing submission, asking for "no more than five years of imprisonment." Inner City Press immediately wrote in seeking to unseal. Later on January 19, the US Attorney's Office asked for 17 years. We'll have more on this.

Inner City Press had sought the unsealing of Greenwood's 33 sentencing letters but with him opposing (citing a Mafia case) and the US Attorney's Office inappropriately taking no position, it was denied. Judge Ramos' order is here.

On October 10, Inner City Press filed Notice of Appeal of the sealing of all of Greenwood's letters. On December 21, represented by pro bono counsel Brian D. Ginsberg of Harris Beech, the request to extend the time to brief this important court transparency appeal was extended, by Second Circuit Judge Jose A. Cabranes, to March 18, 2024, here.

Watch this site. More on Substack here


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January 15, 2024 For Front Running at Morgan Stanley Passi Gets Deferred Prosecution Agreement Not a Felon

by Matthew Russell Lee, Patreon Book Substack

SDNY COURTHOUSE, Jan 12 –  Morgan Stanley conspired in front-running from 2018 to 2021 and on January 12 got a non prosecution agreement and fine.

Senior official Pawan Passi got a deferred prosecution agreement and, to ensure no felony record, formally pled not guilty before U.S. District Court for the Southern District of New York Magistrate Judge Robyn F. Tarnofsky. Inner City Press live tweeted, thread:

All rise! Milbank for Pawan Passi [3 lawyer at defense table] Judge Tarnofsky: You are charged in an information...We will address your conditions of release. [Pre-Trial Services is here, but no formal court reporter] 

 Judge: You are charged with securities fraud. Passi: Not guilty. Defense: We've entered a deferred prosecution agreement. Judge: OK, no Brady [5f] order. 

 DOJ, giving thr DPA deal, says Passi promised sellers of equity blocks MORGAN STANLEY would keep info on their potential sales confidential, knowing that he would disclose that info to buy-side investors who usedthe info to trade in advance of the block sales. 

 Judge: DOJ can release you from supervision at any time, do you understand? Passi: Yes. Judge: You are released on your own recognisance. Control date May 13.

It's signed and done. 

  Deferred Prosecution Agreement on Patreon here.

The case is US v. Passi, 24-cr-__ (Torres)

On SEC Bitcoin ETF Inner City Press Asks IMF Which Says It Is Studying also Yemen Impact

by Matthew Russell Lee, Patreon Book Substack

SDNY COURTHOUSE, Jan 11 – When the International Monetary Fund held its embargoed press briefing on January 11, 2024, Inner City Press asked for the IMF's view of the attacks on ships in the Red Sea and on the US SEC's approval the day before of spot Bitcoin EFTs.

  The IMF spokesperson put on the screen the Fund's Port Watch and provided statistics on hte impact on shipping. After reiterating the IMF's position on crypto that it has benefits as well as making monetary policy more difficult, among other things, she said the IMF is studying the SEC's approval and may have more to say.

Inner City Press also asked what is the goal of the IMF's current mission in Sri Lanka. To assess the Program, she said, which last month disbursed $337 million. 

Back on September 28 Inner City Press asked the IMF and crypto, mere days before the SDNY trial of FTX's Sam Bankman-Fried on fraud charges: 

"At the G20, Deputy Managing Director Gopinath on crypto-currencies said that 'the good thing is there’s no talk of banning crypto I mean the idea that crypto is tough to ban has kind of gone through...It’s going to be much less of the Wild West with better data and transparency.'  Can you explain more, and separate give some/any examples of this better data and transparency?"   Video here

Spokesperson Julie Kozack directed Inner City Press to the Fund's recent paper; later in the briefing she cited concerns at El Salvador and Bitcoin. Watch this site.


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January 8, 2024 Netflix BitConned Has Crypto Rat Tripani Bragging Before Time Served SDNY Review

by Matthew Russell Lee, Patreon Book Substack

SDNY COURTHOUSE, Jan 6 - In covering cryptocurrency cases and crimes in Federal court in New York, Inner City Press is often asked to assist on possible documentaries about OneCoin, Ruja Ignatova and Sebastian Greenwood, SFB and maybe soon Do Kwon and SafeMoon's Karony.

  But one cryptocurrency true-crime is out this month on Netflix: BitConned, about Ray Tripani (the cooperator), Robert Farkas, and Sohrab Sharma.

Inner City Press covered their sentencings, and Sharma's remand for violation of pre-trial supervision. So now, its review of the Netflix flick.  

 The chutzpa of Tripani, giving interviews about ongoing scams will awaiting sentencing, is surprising.

They show 40 Foley Square, then have an actress read from the sentencing transcript. Tripani is said to start a business lending at 50% interest - illegal in New York State. But he's in Florida. 

Will we see him on a Violation of Supervised Release? Watch this site - and the flick. 


Your support means a lot. As little as $5 a month helps keep us going and grants you access to exclusive bonus material on our Patreon page. Click here to become a patron.