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.

June 21, 2021

To PPP Bank Fraud China National Muge Ma Haltingly Pleads Guilty, Sept 22 Sentencing

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

SDNY COURTHOUSE, June 15 – 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, 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 June 15, 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. Ma's parents, it appeared, were in the gallery with Inner City Press. Sentencing is set for September 22. Inner City Press will stay on these cases. Podcast here.

June 14, 2021

JPMChase Barred Woman From Joint Account After Husband's Death, JPMC Says Too Late

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

SDNY COURTHOUSE, June 8 – Lurline Lewy and her husband Rudolph had a $104,000 account at JP Morgan Chase Bank at 596 Fort Washington Avenue in Manhattan. 

  Her husband died, and Chase denied her access to the funds. Now after years are asking she has sued, and Chase says it's too late. 

      On June 8, U.S. District Court for the Southern District of New York Judge Alvin K. Hellerstein held a proceeding. Inner City Press covered it. 

  Morgan Chase pushed its argument that it is too late.

Judge Hellerstein remarked that a bank should be expected to keep records.

He denied the motion to dismiss and said a new scheduling order will issue.

The case is Lewy v. JP Morgan Chase Bank & Co. et al., 20-cv-10048 (Hellerstein)

June 7, 2021

Truist Bank Was Sued As White Boys' Club Now Settling the Case But Will Club Continue?

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

SDNY COURTHOUSE, June 2 – Truist Bank has been defending itself from charges of discrimination and retaliation, and trying to limit discovery.   Now on June 2, Truist is settling.

 On March 10, U.S. District Court for the Southern District of New York Magistrate Judge Ona T. Wang held a discovery proceeding. Inner City Press covered it.   

Sharon Lee's complaint cites a White dominated "boys' club."

 She says Truist has failed to provide documents about comparators, a key for a discrimination case.  

It seemed the information would be limited to Atlanta and New York.

Now on June 2, the court has been informed by letter that in Lee v. Trust Bank, the discrimination case, "the parties have reached a settlement in principle that resolves all of Plaintiff's claims... The Parties are available for a conference should the Court require any further information." Like, will the club continue?

The case is Lee v. Truist Bank et al., 20-cv-1816 (Koeltl / Wang)

May 31, 2021

PNC Bank Is Sued In NY For Usury As Buys BBVA Over Abstention Now More Delay

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

SDNY COURTHOUSE, May 27 – PNC Bank and its Midland Loan Services have been sued for usury, predatory lending and civil conspiracy, under New York and Federal law.  

 The complaint docketed on December 29, 2020 in the U.S. District Court for the Southern District of New York, which Inner City Press covers, describes PNC's lending on a number of homes and allegedly racking up $250 charges.

It questions the reporting on line 205 of the HUD statement. When the plaintiff questioned it, he was called an "assh*ole." 

 The case is filed while PNC seeks to buy the US retail banking business of BBVA for $16 billion, an application to the Federal Reserve Board and other regulators which is subject to the Community Reinvestment Act.

 On December 30 the case was assigned to SDNY District Judge P. Kevin Castel, who has ordered: "ORDER INITIAL PRETRIAL CONFERENCE: COUNSEL FOR PLAINTIFF (OR THE REMOVING DEFENDANT) SHALL IMMEDIATELY SEND A COPY OF THIS ORDER TO ALL PARTIES. Counsel for all parties shall appear for an Initial Pretrial Conference, held pursuant to Rule 16 of the Federal Rules of Civil Procedure, March 1, 2021 at 12:00 p.m. Principal trial counsel shall appear at this and all subsequent conferences. SO ORDERED. Initial Conference set for 3/1/2021 at 12:00 PM before Judge P. Kevin Castel. (Signed by Judge P. Kevin Castel on 12/30/2020)."

  But after a conference was set for March 1, PNC's lawyers wrote in to get it pushed back to April 22. On April 8, PNC's lawyers wrote in again, asking for more delay to two weeks after any answer or motion to dismiss.

In May, the Federal Reserve approved, along with a rare abstention, PNC - BBVA.

Now on May 27, this: "Initial Pretrial Conference held on 5/27/2021. Plaintiffs second amended complaint due August 2, 2021. Defendants pre-motion letters addressed to the second amended complaint due by August 23, 2021. Plaintiffs response due September 9, 2021. Discovery stayed until further order of this Court."

 The case is Barli v. PNC Bank, NA et al., 20-cv-11027 (Castel)

May 24, 2021

M&T Bank Is Sued After Loan Deal With Convicted Felon In Unusual FCRA Case

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

SDNY COURTHOUSE, May 17 – Sandra Klaus sued M&T Bank, who seeking to acquire People's United, for improperly dealing with a convicted felon in connection with an auto loan.     

     On May 17, U.S. District Court for the Southern District of New York Judge Paul A. Engelmayer held a proceeding. Inner City Press covered it. 

  M&T's lawyer bad-mouthed the plaintiff all the while saying the bank is open to mediation or a Magistrate Judge. Judge Engelmayer opined that this was not your usual Fair Credit Reporting Act case.

 Indeed: M&T's lawyer said the bank was somehow not aware of the felony, because it made the loan "between the indictment and the sentencing." What about the guilty plea or conviction?    Another conference has been set for July 19.

In XRP Case SEC Argues To Get Access to Ripple's Legal Advice But Privilege Asserted

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

SDNY COURTHOUSE, May 21– In SEC v. Ripple Labs Inc. et al., a discovery hearing was held on April 30 before U.S. District Court for the Southern District of New York Magistrate Judge Netburn. Inner City Press live tweeted it, see below, then put underlying emails on Patreon here.

On May 21, after an SEC submission now on Patreon here, podcast here, Judge Netburn held another conference, this time on whether the SEC can get access to legal advise to Ripple. Inner City Press fought to cover it and did, live tweeting it here:

Judge Netburn: A lawyer might say, It's clear (or not clear) that XRP should be regulated as a security. In a sense that's expert testimony. Ripple's lawyer's view was just one view. But now the defense is focused on external factors...

Judge Netburn: I haven't seen a case about a fair notice defense that deals with the subjective view. The Chipotle case talked about a good faith belief. But my reading of the cases as to fair notice is that an entity's subjective belief is not relevant.

SEC's Jorge Tenreiro: I would point the court to the US v. Exxon case from the DDC where what happened is, the party tried to say, My defense is based on what the Dept of Energy said. And the judge said, No, you can't cut it up like that.

 SEC's Tenreiro: I keep citing Chipotle because it's almost on all fours --

Judge Netburn: It was also written by a very smart judge.

Tenreiro: Look at the memo from Law Firm A. There were subsequent communications with those lawyers. We need those, not just those that Ripple has chosen to disclose to the market. They are a market participant - they are the important one, the one with the asset

 SEC's Tenreiro: What if Mr. Garlinghouse was quoting in an email after [ex-SEC] Bill Hinman's speech -- Judge Netburn: We can look and see what Ripple did. But attorney client communications are of a different sort, and protected for a good policy reason.

 SEC's Tenreiro: What if their lawyer told them, you still have to deal with the SEC? That would be game over for their defense, that they were confused. We don't know what they have given the exchanges... Ripple tells us, what you were thinking is relevant.

 SEC's Tenreiro: If Ripple was not confused, what does it matter if we were confused? In Chipotle it is said that attorney client has to be construed narrowly. If the lawyers told them, it's confusing, it helps them. But if not...

SEC's Tenreiro: If they got advice that identified the standards they need to follow, that the speech doesn't apply to them, then it's different. The policy concerns weight for disclosure here. This has become the heart of the case.

Judge Netburn: I'll turn to Ripple. Ripple's lawyer Gregory Rapawy: Here the SEC is asking the court to declare a broad waiver. They argued the selective disclosure doctrine from Von Bulow [Here's something, mid-thread, here]

 Ripple's Rapawy: It doesn't matter that we believed and believe that XRP is not an investment contract - it's strict liability. Our defense is fair notice, not on our state of mind.

 Ripple's Rapawy: Neither parties communications are "at issue," and therefore there is no waiver. 

Judge Netburn: The SEC says the individual defendants are using a good faith defense, and that you claim to Judge Torres that the evidence will be the same.

Judge Netburn: The SEC was saying, You may have been impacting the market in a biased way. Ripple's Rapawy: Under Von Bulow, selective disclosure prior to litigation does not constitute a waiver.

 SEC's Tenreiro: The Chipotle [case] is to the contrary. Page 19 of their opposition, I'm not going to read it since it's redacted. But they said they believed XRP was not an investment contract. So it's at issue.

 Court reporter: He cut out for one minute. SEC's Tenreiro: County of Erie dealt with a very specific qualified immunity defense... Finally your Honor, the question is, Do they unfairly influence the market.

Judge Netburn: I'm going to take it under advisement. I will get an order out as quickly as possible.

May 17, 2021

Wells Fargo Is Sued For Cheating Mortgage Consultants Now Swipecard Info Fight in SDNY

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

SDNY COURTHOUSE, May 13 – Michael Lanning sued Wells Fargo for not paying overtime and minimum wage to himself and a prospective class of mortgage consultants.        

On May 13, U.S. District Court for the Southern District of New York Magistrate Judge Kevin N. Fox held a discovery proceeding. Inner City Press covered it. 

 The discussion involved swipe card and Concur information, and when the prospective class representatives left Wells Fargo, which has had a range of legal woes.

May 10, 2021

IMF Answers on Colombia and Myanmar As Inner City Press Asks of Crises

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

SDNY COURTHOUSE, May 6 – When the International Monetary Fund held its biweekly embargoed press briefing on May 6, Inner City Press asked about unrest (and tax hikes) in Colombia, the coup in Myanmar, and a program for Uganda. Interim video here, IMF video and transcript forthcoming.  Spokesperson Gerry Rice responded on each.

Inner City Press asked, "Given unrest in Colombia, is there any updated IMF thinking on the situation in the country, since the April 28 announcement of Colombia's qualification for the arrangement under the Flexible Credit Line?"

  The IMF's Rice among other things said that while the IMF is watching President Duque's moves, Colombia is still eligible for the FCL, due to its strong economic fundamentals. Why the tax hike on eggs and milk, then?

Inner City Press asked, On Myanmar can you update us on IMF's contacts with the regime and other authorities, including those seeking to be recognized?

  Rice's answer was that there was not much new IMF news; he used the word regime and expressed concern.

  Finally Inner City Press asked, " On Uganda, please confirm - and if so, comment on -- reports that Uganda is seeking at least $900 million in a three-year IMF program for its budget amid rising spending due to the Covid-19 pandemic."

  Rice confirmed that's the size of the request, said things are progressing with more still to be ironed out. The size will be up to the IMF Board.

May 3, 2021

Guilty Verdict In Reverse Mortgage Fraud Trial of Hild Cited Capital One & Consumers Bank

By Matthew Russell Lee, Patreon, Podcast

SDNY COURTHOUSE, April 29 – Michael Hild was arraigned for fraud on Live Well Financial's reverse mortgages and home equity conversion mortgages by U.S. District Court for the Southern District of New York Judge Ronnie Abrams on September 5, 2019. Inner City Press covered it, here.

 And now, on April 29, after Hild told the witness stand and claimed he was just along for the ride, an SDNY jury in less than four hours of deliberation declared him guilty on all counts. "HILD, 46, of Richmond, Virginia, was convicted of five counts:  one count of conspiracy to commit securities fraud; one count of conspiracy to commit wire and bank fraud; one count of securities fraud; one count of wire fraud; and one count of bank fraud." Photo here.

 Back on April 14, Judge Abrams started the trial. Inner City Press live tweeted the morning, below, and noted that Hild worked at Capital One, and was building an empire in South Richmond which some locals denounced as gentrification. Hild, of course, has another story.

And on April 27, defendant Hild took took the witness stand, which is rare. Inner City Press tweeted, here:

Hild: At Capital One, I worked to get them into the mortgage industry.... Livewell Financial was founded in 2005: he and a bunch of papers in my kitchen.

Hild: We needed $20 million. We went to Customers Bank. They said they could do it, they had to go to the credit committee but it should be no problem. Still, there would be delay and we were at the limit of our Zenith Bank warehouse line. So we went with re-po

OK - defendant Hild now continues on direct examination after lunch break. He hired people - who have testified against him in this trial as cooperators. This cross-examination should be a doozy.

 Watch this site.

Back on Saturday, April 24, the US filed this: "Re: United States v. Michael Hild, 19 Cr. 602 (RA) Dear Judge Abrams: The Government writes in advance of the charge conference scheduled for April 26, 2021, to propose an addition to the Court’s jury instructions. Given the testimony and cross-examination on the disclaimer that Live Well provided to IDC (Tr. 153-55, 388-89, 918, 1078-79), the Government proposes that the second paragraph on page 28 of the draft charge be revised as follows, with proposed additions in bold: Any testimony that you may have heard from any witness with respect to whether a particular fact would or would not have been important to him in general reflect that witness’s individual views. Although you may consider such testimony, it is not controlling. It is for you to determine whether a particular fact would have been significant to a reasonable person in making an investment decision. In considering whether a statement or omission was material, let me caution you that it is not a defense if the material misrepresentation or omission would not have deceived a person of ordinary intelligence. Nor does a disclaimer regarding the accuracy of information render that information immaterial as a matter of law." We'll see...

On April 15, cooperator Darren Stumberger was asked on cross examination how he selected when to tape record, and when not. He tried to dismiss selectivity, tying his recording to the "Scenario 14 era."

  Simultaneously on April 15, in Stumberger's separate case before SDNY Judge J. Paul Oetken, 19-cr-608, his lawyer "asked the Court to seal Docket Number 13." That's appears to be an unnumbered Minute entry of a motion hearing for withdrawal of counsel. There is no item numbered 13 anymore, not even "sealed document placed in vault." Why not? Why now?

On April 19, as the trial continued, the abrupt closure of Live Well was portrayed, with a lending who flew from Detroit to demand a meeting to Hild on the stand. Hild had refused to meet; later the lender was told that a warehouse line of credit might be paid back over time.

On April 20, the US Attorney's Office asked Judge Abrams to "impose a deadline for the defendant to decide whether he will waive the attorney client privilege in support an of advice- or presence of counsel defense... prior to the completion of the direct testimony of Eric Rohr, Live Well's form CFO."

 There is Hild's line that every business failure is not a criminal act. On this one, we'll see. The trial continue on April 21.

From April 14: Assistant US Attorney, in opening, says it unraveled in 2018 when lenders asked for more info. $200 million stolen; the cooperating witness are criminals, sure, AUSA says, but they have accepted responsibility. 

Next up: Ben Dusing. And he's laying it on thick
[Note: "“It is the Yankee Stadium of financial fraud worldwide,” Dusing told Cincinnati ABC affiliate WCPO shortly after his hiring in March]
[And: Hild has a website of his endeavors, here]

 Ben Dusing: I'm from Kentucky, I speak with an accent, you're going to hear it a lot. My daddy told me, A trial is a search for the truth. We begin together to search for the truth. And that's the exciting thing. We can all be proud. These are interesting times

 Ben Dusing: Never before have I been confined by plexi-glass. We'll have to lean over more, to find the truth. But it is a common purpose. We haven't seen any proof yet.  At the end I will ask you to find Mr. Michael Hild not guilty based on the facts and law

 Ben Dusing: It will come down to, did Mr. Hild intend to defraud people. It's complex. You're going to hear about pre-payment speed. Truth is found within the complexity, not despite it.

 Ben Dusing: This case is about throwing people under the bus. Bigger fish. I thank you for the sacrifice you are about to make.  [Then a 5 minute break, during which: Could you tell them not to clean the windows now? Courtroom 110 is big, with a lot of history]

It's 11:25 am and Judge Abrams is back with more jury instructions: "You must follow the law as I explain it to you, whether you agree with it or not," etc.

 First government witness against Michael Hild of Live Well is a cooperator, who previously worked at Morgan Stanley then Goldman Sach

As this witness Darren Stumberger, drones on, Inner City Press has looked up the transaction being asked about: "Ernie Calabrese and Vice President Dan Foster who will also join Live Well alongside Stumberger.

On April 13, Judge Abrams picked a jury of 12, with three alternates, in the large Jury Assembly Room of the SDNY, with the venire in masks and individual chairs, socially distanced. Inner City Press was there.

  The Juror Questionnaire asked about any links to or knowledge of Bank of New York, Customers Bank, First Bank of Tennessee, Flagstar Bank, ICBC, International Data Corporation (IDC), Mizuho Securities, NRMLA, Nomura, Republic Bank, U.S. Bank and others.

 In the run-up to the trial, which starts on April 14 at 10:15 am and which Inner City Press will cover, the US Attorney's Office filed a motion in limine seeking to preclude "evidence suggesting that IDC or the lenders were negligent or careless in failing to stop the fraud."

 Echoes of the Eaze trial of US v. Weigard, earlier this year before Judge Jed S. Rakoff, unsealing order won by Inner City Press here.

   Again, beyond mortgage fraud, we note for now that Hild worked at Capital One, and was building an empire in South Richmond which some locals denounced as gentrification. Hild, of course, has another story. Watch this site.

The case is US v Hild, 19-cr-602 (Abrams). T