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.

January 15, 2022

At the FDIC, Jelena McWilliams said she will depart the organization on February 4, more than a year earlier than when her term was set to expire [after a] situation pit McWilliams against FDIC board member Martin Gruenberg and Rohit Chopra, director of the CFPB.  This triggered industry hand-wringing that "even smaller tie-ups may be in jeopardy amid increased scrutiny by the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency, a Cowen analyst wrote in a note to clients.  “We are in a period of transition to a new standard for merger approvals, where there is a greater focus on how deals affect the convenience and needs of the community."  On the other hand, "S&P notes that banks with $10 billion to $50 billion in assets composed 4 percent of targets last year, up from the historical 1 percent.  Banks have a large target to hit if transaction volume will keep pace with last year, when it took all of seven months to surpass 2020’s deal value. Deals like PNC Financial Services Group’s $11.5 billion takeover of BBVA USA is one such boon. US Bancorp‘s proposed acquisition of MUFG Bank is among others.  We’ll continue to watch whether banks’ need for scale and technology rivals potential regulatory headwinds and lack of attractive targets."  And "Nearly half of the executives responding to an annual M&A outlook survey by Bank Director said their bank was likely to make an acquisition in 2022 if they could find a willing target. That’s a rate the trade publication calls a “significant increase” from the 33 percent a year earlier who said they would likely buy another bank in 2021."  We'll be there...

January 10, 2022

HSBC Is Sued For Role In Failed China Iron Ore Sale Described As Dictating Bank to Use

By Matthew Russell Lee, Patreon Maxwell Book
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Jan 3 – Lamda Solutions Corp. got advanced banking commitments from HSBC to broker a deal between a Chinese company buying, and a Mexican company selling, 13 shipments of 80,000 tons of iron ore each. Things fell apart, and Lamda sued.        

        On January 3, U.S. District Court for the Southern District of New York  Judge Gregory H. Woods held a proceeding. Inner City Press covered it.

  Much of the discussion on January 3 centered on a blacklined amendment complaint that Lamda who filed later in the day.

When it was filed it renamed HSBC Bank from N.A. to National Association; it added that HSBC had required the Chinese buyer to use a bank HSBC found acceptable.

The case is Lamda Solutions Corp. v. HSBC Bank USA, N.A., 21-cv-2259 (Woods)

January 3, 2022

Citibank Is Sued By Staff in Argentina So Countered in SDNY Now Staff Says End TRO

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Dec 28 – Citibank was sued by one of its employees in Argentina, Alejandro de Nevares. Citibank then sued in the United States saying that a binding arbitration agreement prohibits the Argentine law suit.      

         On December 17, U.S. District Court for the Southern District of New York  Judge Victor Marrero held a proceeding. Inner City Press covered it. 

 Judge Marrero ruled that Alejandro de Nevares is in contempt and that he must withdraw from the Request for Clarification and if not, be subject to a coercive fine of $10,000 a day, "and this amount shall increase by an increment of $5000 every three days until he brings himself into compliance with the TRO by withdrawing from the Request for Clarification."

On December 28 De Nevares' lawyer filed a three page letter with Judge Marrero, saying he withdrew the Request for Clarification in the Argentine court - but that the TRO should be dissolved, or PI granted so that it can be appealed. Watch this site.

The case is The branch of Citibank, N.A. established in the Republic of Argentina v. De Nevares, 21-cv-6125 (Marrero) 

December 27, 2021

Citibank Is Sued By Staff in Argentina So Counter Sues in SDNY And Wins $10K a Day

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Dec 18 – Citibank was sued by one of its employees in Argentina, Alejandro de Nevares. Citibank then sued in the United States saying that a binding arbitration agreement prohibits the Argentine law suit.      

         On December 17, U.S. District Court for the Southern District of New York  Judge Victor Marrero held a proceeding. Inner City Press covered it.

December 20, 2021

IMF Doles Out $258M To Kenya After Answers Inner City Press on Crypto in El Salvador and  Exit from Brazil

By Matthew Russell Lee, Patreon Video Podcast
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Dec 17 – When the International Monetary Fund held its biweekly embargoed press briefing on December 16, Inner City Press asked about crypto-currency in El Salvador and beyond, and about the IMF leaving or getting thrown out of Brazil.

Inner City Press asked: "On crypto-currency given the Chief Economists recent comments about the IMF favors regulation over a ban, compared to previous statements on El Salvador, please explain the IMF's current thinking."

   Spokesperson Gerry Rice acknowledge the new comments and blog, but reiterated concern about adoption of Bitcoin as legal tender, given volatility.

  On December 17, the IMF Executive Committe met and released $258 Million to Kenya: "   The IMF Executive Board today completed the 2021 Article IV consultation and Second reviews of the EFF/ECF arrangements with Kenya, allowing for an aggregate immediate disbursement equivalent to about US$ 258.1 million for budget support.  · The Kenyan authorities have continued to show strong commitment to their reform agenda in a challenging environment and are acting to reduce debt vulnerabilities while maintaining support for the economic recovery.  · They have maintained careful control of government spending to limit the deficit and are taking steps to reform state-owned enterprises (SOEs) to limit pressure on the budget while protecting social programs.  Washington, DC – December 17, 2021: The Executive Board of the International Monetary Fund (IMF) completed today the 2021 Article IV Consultation [1] and the Second reviews of the 38-month Extended Arrangement under the Extended Fund Facility (EFF) and 38-month arrangement under Extended Credit Facility (ECF) for Kenya. The Board’s decision allows for an aggregate immediate disbursement of SDR 185 million (about US$ 258.1 million)."

December 16 partial handheld video here; full transcript here:

Matthew Russell Lee, Inner City Press: I've asked you a number of times about cryptocurrency in El Salvador. You've given, you know, the answers that you've given. I saw that the chief economist said, at least to me, something that seems slightly different saying developing economies should regulate it, rather than try to ban cryptocurrency. I just wanted to ask you, maybe is there a new position on this? Is there something -- can you say a little bit more particularly how it might apply to what's been said thus far about El Salvador.  And also on -- I just -- I'm sure everyone has seen the spat between Brazil and the IMF. Where does that stand? Is it, I guess, is the current status that the IMF is going to leave the country in June of next year? And what more can you say about it in response? Thanks a lot. 

MR. RICE: Thank you. So on crypto currencies, El Salvador, and so on, your first question, your quite right. We did issue a blog actually last week from our monetary and financial counselor, Tobias Adrian (phonetic) and colleagues. And you're quite right to characterize it the way you did, Matthew, which was a call a strong call for regulation in the realm of cryptocurrency. So, so that's quite right.  On El Salvador specifically, our view has not changed. We support the authority's efforts to boost financial inclusion and raise growth, but the risks arising from using bitcoin as legal tender need to be addressed. Crypto technologies and digital payment systems have the potential to make payments more efficient, but given bitcoin's high price volatility, its use as legal tender entails significant risks to consumer protection, financial integrity, and financial stability.  And it’s used also gives rise to fiscal contingent liabilities. So, our view on what we've said about El Salvador and bitcoin specifically, being used as legal tender, our views there have not changed. I'm essentially, as you know, probably repeating, reiterating what I've said here before.  On your question about Brazil, the IMF agreed with the Brazilian authorities to close the IMF representative's office in Brasilia by June 30, 2022, which is what you were saying. And that's when the term of the current IMF representative expires. So, like with many other member countries, the office in Brazil was opened during the time when we had a significant financial arrangement with Brazil. That was its initial purpose. And while that IMF arrangement with Brazil finished, the office was kept open to facilitate dialogue between Fund staff and the authorities, this has happened.  This has been the case also with a number of other countries in the past. You know, we would open an office particularly at the time of crisis, at a time when there's a financial arrangement. And then over time we close the office. So, this has happened in the past. I would want to emphasize that we expect the high quality of the Fund's engagement with the Brazilian authorities to continue as we work closely to support Brazil in strengthening its economic policy and institutional settings. So, that would be my comment on Brazil. Thank you very much, Matthew.

In November, Inner City Press asked about Ethiopia and Tigray, Chad and its Glencore debt, and the IMF's status with Zambia. Spokesperson Gerry Rice responded on each. Podcast here. Short video of Q&As on Twitter here.  IMF video here

December 13, 2021

Calk Found Guilty Of Manafort Loans To Get Cabinet or UN Position Wants No Jail Time

By Matthew Russell Lee, Patreon Podcast 2 3 5
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Dec 6 – After months of preliminaries, the trial of Stephen Calk for conspiracy to trade his bank's loans to Paul Manafort for the Secretary of the Army position began on June 23. Inner City Press live tweeted, here, previous coverage here,  podcast here

 On July 13, after mere hours, the jury found him guilty. Inner City Press verdict tweet here; in front of 40 Foley Square, Calk refused questions (including on his bank and desire of UN Ambassador position) and was whisked off in a black car. Video here. Sentencing set for January 10, 2022. Podcast here.

Comment from Calk's lawyer: "We are very disappointed by the verdict and will be pursuing all available legal remedies, including an appeal," said Paul H. Schoeman, Co-Managing Partner at Kramer Levin Naftalis & Frankel LLP.

 On December 6, Calk's lawyer Schoeman filed a sentencing memo asking for no incarceration, calling this "case truly unique in the annals of bank bribery prosecutions." So too would be a non incarceratory sentence for this crime. Watch this site.

On August 20, Kramer Levin filed a letter seeking acquittal, arguing among other things that Manafort's help wasn't worth the requisite $1000," amounting to no more that "one email to Jared Kushner and communications with Scaramucci."

On October 8, Kramer Levin went further, saying the government's focus on the value of Calk's plane ticket to New York to be interviewed by the "Tiger Team" and stay at the Four Seasons Hotel in that connection met the $1000 threshold. On the loans, the argument is that "lacking actual evidence of corrupt intent, the government attempts to shoe horn a narrative into the otherwise innocuous facts that are in evidence." Watch this site.

December 6, 2021

Panama Money Launderer Luis Martinelli Faked Diplo Creds Has Now Pled Guilty in EDNY

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

EDNY COURT, Dec 2 – Luis Enrique Martinelli Linares is charged with money laundering tens of millions of dollars in bribes on behalf of a close relative who was a high-ranking government official in Panama.

After fighting extradition including by skirting Panama lockdown, he says he's ready to plead guilty but does not want to be detained. But he has been detained.

On November 30, notice of the guilty plea: "ELECTRONIC SCHEDULING ORDER as to Luis Enrique Martinelli Linares, Change of Plea Hearing set for 12/2/2021 at 2:00 PM in Courtroom 10A South before Judge Raymond J. Dearie. So Ordered by Judge Raymond J. Dearie on 11/30/2021. (Greenidge, Catherine)."

And on December 2 (during the US v. Ghislaine Maxwell trial in SDNY), this: "– Earlier today, at the federal courthouse in Brooklyn, Luis Enrique Martinelli Linares (Luis Martinelli Linares) pleaded guilty to conspiracy to commit money laundering for his role in a massive bribery and money laundering scheme involving Odebrecht S.A. (Odebrecht), a Brazil-based global construction conglomerate. The proceeding was held before United States District Judge Raymond J. Dearie.  Luis Martinelli Linares and Ricardo Martinelli Linares were initially arrested at el Aeropuerto Internacional la Aurora in Guatemala on July 6, 2020, pursuant to a provisional arrest request from the United States as they were attempting to depart Guatemala on a private plane. The defendants were charged on February 4, 2021, in an indictment in connection with this bribery and money laundering scheme. The United  2  States has also requested to extradite Ricardo Martinelli Linares, and those proceedings are ongoing." Watch this site. 

     On November 16, U.S. District Court for the Eastern District of New York Magistrate Judge Marcia M. Henry held a detention proceeding. Inner City Press live tweeted it here. Martinelli was detained.

 Martinelli's lawyer appealed to EDNY District Judge Raymond J. Dearie, who heard the appeal (and dismissed it) on November 23. Inner City Press live tweeted it here

November 29, 2021

IMF Answered Inner City Press on Bitcoin in El Salvador Now Alleges Risks In Article IV Report

By Matthew Russell Lee, Patreon Video Podcast
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Nov 22 – When the International Monetary Fund held its biweekly embargoed press briefing on September 16, Inner City Press asked about crypto-currency legislation in Ukraine and again El Salvador, about the coup in Guinea and the role of the Venezuela talks in Mexico on release of the SDRs. IMF video and transcript forthcoming.  Spokesperson Gerry Rice responded on each. Podcast here. Short video of Qs on Twitter here.  Now longer YouTube of IMF video here.
Full transcript here.

Inner City Press asked, " what is the IMF's view of Ukraine's move to regulate crypto-currency? Also, the new legislation proposed in Panama, and the implementation of the El Salvador Bitcoin as legal tender bill?" When called on, Inner City Press added that Ukraine would use nuclear reactors' output for mining.

  Rice cited an upcoming virtual mission to Ukraine later this month, and said that on El Salvador, the talks are under Article 4, not for a program, as least at this point.

On November 22, the IMF issued its Article IV report on El Salvador, including that "[e]fforts to improve financial inclusion and raise growth are welcome, but risks arising from Bitcoin as a legal tender, the new payments ecosystem and trading in Bitcoin should be addressed. Crypto-technologies and digital payment systems like Chivo have the potential to make payments more efficient, thereby enhancing financial inclusion and supporting growth. Given Bitcoin’s high price volatility, its use as a legal tender entails significant risks to consumer protection, financial integrity, and financial stability. Its use also gives rise to fiscal contingent liabilities. Because of those risks, Bitcoin should not be used as a legal tender. Staff recommends narrowing the scope of the Bitcoin law and urges strengthening the regulation and supervision of the new payment ecosystem. Like for other e-wallets, Chivo should be required to fully safeguard customers' funds, both in U.S. dollars and Bitcoin, by segregating and ring-fencing reserve assets. Stronger regulation and oversight of the new payment ecosystem should be immediately implemented for consumer protection, anti-money laundering and counter financing of terrorism (AML/CFT), and risk management. Banking regulation should incorporate prudential safeguards such as conservative capital and liquidity requirements related to Bitcoin exposure. Measures to limit fiscal contingent liabilities, such as winding down the trust fund or withdrawing public subsidies to Chivo, should also be promptly considered. Recently announced plans to use the proceeds of new sovereign bond issuances to invest in Bitcoin, and the implications of trading more broadly in Bitcoin, will require a very careful analysis of implications for, and potential risks to, financial stability."

Back on January 8 Inner City Press asked the IMF's Helge Berger, Mission Chief, about China's so-called Belt and Road Initiative: "Your Article IV report cites China's "overseas lending projects" amid "rising geopolitical tensions and economic and trade frictions." How does the IMF think that rising debt levels among African countries, and increased skepticism about the "Belt and Road" will impact or be addressed going forward? -Matthew Russell Lee, Inner City Press. Video here.
and see, now, the book "Belt and Roadkill," here.

November 22, 2021

To PPP Bank Fraud Muge Ma Pled Guilty Now Seeks To Seal Motion on Expert But Press Opposes

By Matthew Russell Lee, Patreon Podcast
BBC - Guardian UK - Honduras - The Source

SDNY COURTHOUSE, Nov 16 – Amid mounting fraud in the U.S. Paycheck Protection Program, including banks and non-bank fintech lenders refusing to report the most basic data about what they done with the money, an investigative project of Inner City Press, on May 21, 2020 there was the arrest of Muge Ma, as known as "Hummer Mars," a Chinese national residing in Manhattan.

At 7 pm he was remanded to custody in jail as a risk of flight, see below.

 On September 11, 2020 after various other attempts, Ma tried again before Judge Richard M. Berman. He continued remand but agreed to hear Ma's Constitutional / Sixth Amendment right to counsel arguments, on September 30. Inner City Press live tweeted September 11, here and below.

 On November 16, 2021 after Ma pleaded guilty to Counts 2 and 8 and several times delayed his sentencing, his lawyer sought to seal the entirety of his motion about an expert for sentencing. One the first and last line were left in; four paragraph were redacted.

  Inner City Press immediately filed opposition, seeking unsealing. Watch this site.

   On June 15, 2021 Ma was brought into the courtroom of Judge Berman by two Marshals, for his change of plea proceeding. But it did not go smoothly. When asked to allocute to his crimes, Ma did not want to say that he had intended to defraud the banks.

  Then why was he pleading guilty? And why should he get "acceptance of responsibility" reduction in offense level at sentencing?

  Next, Ma resisted describing his aggravated identity theft. He kept saying that he applied in his own name, but possessed the email of another, with the name in it. Really?

  Then the AUSA and defense counsel had a whispered, non-public sidebar with Judge Berman, after which the allocution was accepted.

November 15, 2021

UN Briber Patrick Ho Used Mashreqbank Which Is Disciplined by FRB As Guterres Bans Press

By Matthew Russell Lee, Video, Q&A, HK here

UN GATE, Nov 9 – Four months after the arrest for UN bribery of former Senegalese foreign minister Cheik Gadio and Patrick Ho, the head of China Energy Fund Committee full funded by CEFC China Energy, his ultimate boss at CEFC Ye Jianming was brought in for questioning in China. Among the hooks for the prosecution was payments of alleged bribes not only through HSBC but also Mashreqbank based in Dubai. And on October 10, 2018 Mashreqbank was hit with and settled money laundering charges by the New York State Financial Services Department.

More than three years later on November 9, 2021 the US Federal Reserve announced, "Federal Reserve Board on Tuesday announced it has issued a consent cease and desist order against Mashreqbank psc, of the United Arab Emirates, for having insufficient policies and procedures to ensure that the activities conducted at its offices outside the United States complied with U.S. sanctions laws." Talk about a revolving door. Like immunity at the UN, which impunity has no end, for now.