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   BloggingHeads.tv  Click for March 1, 2011 BloggingHeads.tv re Libya, Sri Lanka, UN Corruption by Inner City Press.  Until next time, for or with more information, contact us.

August 3, 2020

Ecuador $17B Bond Restructuring To Go Forward After Restraining Order Denied in SDNY

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

SDNY COURTHOUSE, July 31 – Ecuador's restructuring of $17 billion of bonds, the tender for which was extended to August 3, was the subject of a request for a Temporary Restraining Order before U.S. District Court for the Southern District of New York Judge Valerie E. Caproni who held arguments and ruled on July 31. Inner City Press live tweeted it, here:

"Contrarian Capital Markets and GMO Emerging Country Debt Fund" are arguing that Ecuador is lying. Clark of Lathan for plaintiffs: "Even today there's some question whether there has been a good faith communication of the suspension."

Judge Caproni: I saw the press release.

Clark: The evidence will show Clear Stream is telling people they had to tender today.... This is securities fraud. It shouldn't be that a deal this big is pushed through like this.

Dennis Tracey of Hogan Lovells, for Ecuador: "If Republic does not get a super majority, the exchange does not occur."

Judge Caproni: It's self-executing?

Tracey:Yes.... The Republic *is* acting within the 4 corners of the indenture. A super majority can waive any provision of the bonds, prospectively. Here, the offer was to exchange bonds, one for the other, and eliminate the Most Favored Nations provision 

Tracey, for Ecuador: We did not have equal conversations with all bondholders. But we didn't say we did. With $17 billion of bonds, we can't speak with every bondholder.

Judge Caproni: I am prepared to rule.  Plaintiffs want Wells Fargo to return their tendered bonds. The tender was extended to August 3. Now, the temporary restraining order IS DENIED.  Some of this will have to be decided by the Arbitral Tribunal in London.  But the TRO is denied.

Update, later: Judge Caproni is still blasting away at plaintiffs' allegations and complaint. Now she says, "That they futzed around with investors for 2 weeks is not material... In short, based on the complaint that has been filed, plaintiffs are not likely to prevail."

The ruling is finished. A lawyer / partner says, Now we're going to buy our associates a drink.

Judge Caproni: A socially distanced drink!

July 27, 2020

Bank of America Settles EDNY Fair Lending Charges As Inner City Press Requests PPP Data

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - CJR - PFT

FEDERAL COURT, July 23 – Amid the COVID-19 pandemic, fair lending and the Community Reinvestment Act are taking a back seat, or worse. Some banks to which CRA applies are excluding smaller businesses and those in communities of color. And some banks bragging about the PPP loans won't provide any information - we are Pressing.

   Inner City Press has been contacting both banks and non-banks for their Paycheck Protection Program data. Without yet getting into the results, note that the highest overdraft fee bank in America, Ameris Bank has for now responded to Inner City Press' questions by stating that: "Information about our Paycheck Protection Program participation can be found in our filings with the Securities and Exchange Commission.  Sincerely,  William D. McKendry EVP and Chief Risk Officer Ameris Bank. " UNacceptable.

  We'll have more on this. For today, July 23, from the EDNY we have this to report: "Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Eric S. Dreiband, Assistant Attorney General for Civil Rights, filed a civil complaint and proposed settlement agreement with Bank of America, N.A. (“Bank”) today to resolve claims that the Bank engaged in a pattern or practice of discrimination on the basis of disability, in violation of the Fair Housing Act. The Settlement Agreement is subject to being so ordered by the assigned district judge. According to the civil complaint, the United States alleged that, between January 2010 and 2016, the Bank maintained a policy of denying mortgage loans and, between January 2010 and 2017, home equity loans, to adults with disabilities who were under legal guardianships or conservatorships. “This settlement ensures that Bank of America will no longer discriminate against people with disabilities when issuing mortgage and home equity loans, and compensates the victims for their losses,” stated Acting United States Attorney DuCharme. “Our Office is committed to standing up for the rights of individuals with disabilities and taking action when necessary to vindicate those rights.” “No one in this free country should be denied access to the American dream merely because of a disability. The unalienable right to pursue happiness extends to all people, including those with disabilities, and purchasing a home is one way many people exercise this right,” said Assistant Attorney General Dreiband of the Civil Rights Division. “The Fair Housing Act prohibits banks from denying mortgage loans and other housing-related credit to people because of their disabilities, and this Department will hold accountable those lenders who engage in such illegal conduct. Today’s settlement provides compensation to victims of unlawful discrimination and requires Bank of America to apply non-discriminatory policies in deciding which applicants will receive loans.”

July 20, 2020

Epstein Deals of Deutsche Bank Cited in DCNJ Class Action As UN Maxwell Events UNexplained

By Matthew Russell Lee Patreon Periscope Song
BBC - Decrypt - LightRead - Honduras - Source

SDNY COURTHOUSE, July 16 – After the death of Jeffrey Epstein in the MCC prison, on July 2 Acting US Attorney for the Southern District of New York Audrey Strauss announced and unsealed in indictment of Maxwell on charges including sex trafficking and perjury.

   Inner City Press went to her press conference at the US Attorney's Office and asked, Doesn't charging Maxwell with perjury undercut any ability to use testimony from her against other, bigger wrong-doers? Periscope here at 23:07.

  Strauss replied that it is not impossible to use a perjurer's testimony. But how often does it work?

 On July 15 a putative class action was filed in the U.S. District Court for the District of New Jersey, alleging that "Defendants made false and/or misleading statements and/or failed to disclose that: (i) Deutsche Bank had failed to remediate deficiencies related to AML, its disclosure controls and procedures and internal control over financial reporting, and its U.S. operations’ troubled condition; (ii) as a result, the Bank failed to properly monitor customers that the Bank itself deemed to be high risk, including, among others, the convicted sex offender Jeffrey Epstein (“Epstein”) and two correspondent banks, Danske Estonia and FBME Bank, which were both the subjects of prior scandals involving financial misconduct; (iii) the foregoing, once revealed, was foreseeably likely to have a material negative impact on the Bank’s financial results and reputation; and (iv) as a result, the Bank’s public statements were materially false and misleading at all relevant times." The case is Karimi v. Deutsche Bank, et al., 20-cv-8978 (DCNJ) - full Complaint here.

  On July 7 from NYS Superintendent of Financial Services Linda A. Lacewell, this: "Deutsche Bank AG, its New York branch, and Deutsche Bank Trust Company America (collectively “Deutsche Bank” or the “Bank”) have agreed to pay $150 million in penalties as part of a Consent Order entered into with the New York State Department of Financial Services (“DFS” or the “Department”) for significant compliance failures in connection with the Bank’s relationship with Jeffrey Epstein and correspondent banking relationships with Danske Bank Estonia (“Danske Estonia”) and FBME Bank (“FBME”).    This agreement marks the first enforcement action by a regulator against a financial institution for dealings with Jeffrey Epstein.   “Banks are the first line of defense with respect to preventing the facilitation of crime through the financial system, and it is fundamental that banks tailor the monitoring of their customers’ activity based upon the types of risk that are posed by a particular customer,” Superintendent Lacewell said. “In each of the cases that are being resolved today, Deutsche Bank failed to adequately monitor the activity of customers that the Bank itself deemed to be high risk. In the case of Jeffrey Epstein in particular, despite knowing Mr. Epstein’s terrible criminal history, the Bank inexcusably failed to detect or prevent millions of dollars of suspicious transactions.”   With respect to the case of Jeffrey Epstein, the Bank failed to properly monitor account activity conducted on behalf of the registered sex offender despite ample information that was publicly available concerning the circumstances surrounding Mr. Epstein’s earlier criminal misconduct. The result was that the Bank processed hundreds of transactions totaling millions of dollars that, at the very least, should have prompted additional scrutiny in light of Mr. Epstein’s history, including:   payments to individuals who were publicly alleged to have been Mr. Epstein’s co-conspirators in sexually abusing young women;   settlement payments totaling over $7 million, as well as dozens of payments to law firms totaling over $6 million for what appear to have been the legal expenses of Mr. Epstein and his co-conspirators;  payments to Russian models, payments for women’s school tuition, hotel and rent expenses, and (consistent with public allegations of prior wrongdoing) payments directly to numerous women with Eastern European surnames; and  periodic suspicious cash withdrawals — in total, more than $800,000 over approximately four years.  This substantive failure was compounded by a series of procedural failures, mistakes, and sloppiness in how the Bank managed and oversaw the Epstein accounts. For example, certain conditions imposed upon the Epstein accounts by a Bank reputational risk committee — conditions that, if followed, might have detected and prevented many subsequent suspicious transactions — (a) were not transmitted to the majority of the account relationship team; and (b) were misinterpreted by a compliance officer in a way that resulted in very little actual change in how the monitoring of the accounts occurred. Throughout the relationship, very few problematic transactions were ever questioned, and even when they were, they were usually cleared without satisfactory explanation." We'll have more on this.

   In the July 3 media coverage of Epstein's procurer Ghislaine Maxwell, media all of the world used a video and stills from it of Maxwell speaking in front of a blue curtain, like here.

 What they did not mention is something Inner City Press has been asking the UN about, as under UNSG Antonio Guterres with his own sexual exploitation issues (exclusive video and audio) it got roughed up and banned from the UN: Ghislaine Maxwell had a ghoulish United Nations press conference, under the banner of the "Terramar Project," here.

  On July 5, after some crowd-sourcing, Inner City Press reported on another Ghislaine Maxwell use of the United Nations, facilitated by Italy's Permanent Representative to the UN, UN official Nikhil Seth and Amir Dossal, who also let into the UN and in one case took money from convicted UN briber Ng Lap Seng, and Patrick Ho of CEFC China Energy, also linked to UN Secretary General Antonio Guterres.

  At the Ghislaine Maxwell UN event, the UN Deputy Secretary General was directly involved.

List of (some of) the participants on Patreon here.

Antonio Guterres claims he has zero tolerance for sexual exploitation, but covers it up and even participate in it. He should be forced to resign - and/or have immunity waived.

  Terramar has been dissolved, even though Maxwell's former fundraiser / director of development Brian Yurasits still lists the URL on his (protected) Twitter profile, also here.

  But now Inner City Press has begun to inquire into Ghislaine Maxwell's other United Nations connections, starting with this photograph of another day's (or at least another outfit's) presentation in the UN, here. While co-conspirator Antonio Guterres has had Inner City Press banned from any entry into the UN for two years and a day, this appears to be in the UN Economic and Social Council (ECOSOC) chamber. We'll have more on this, and on Epstein and the UN. Watch this site.

  The case is US v. Maxwell, 20-cr-330 (Nathan).

***

July 13, 2020

After US Attorney Drops Guilty Verdicts on Iran Banker Judge To Review If SDNY Misconduct

By Matthew Russell Lee, Thread, Patreon Song

SDNY COURTHOUSE, July 8 – Iranian banker Ali Sadr Hashemi Nejad has been on trial, charged with money laundering and violating US sanctions including through a Venezuelan infrastructure project.

  On March 16, after an unprecedented decision to proceed with ten jurors in the jury room and an eleventh at home, deliberating by video conference or FaceTime, he was found guilty on most charges. Live tweeted thread here.

 Late on Friday, June 5 this news dump: "Re: United States v. Ali Sadr Hashemi Nejadin, 18 Cr. 224 (AJN)  Dear Judge Nathan: The Government respectfully submits the enclosed application for an order of nolle prosequi of the Indictments filed in this case against Ali Sadr Hashemi Nejadin (“Sadr”) and Bahram Karimi. Respectfully submitted, /s/ GEOFFREY S. BERMAN  United States Attorney"

 Then on July 2, under Acting US Attorney Audrey Strauss, a news dump of 19 pages, with the names of those responsible (here on Patreon).

  Now on July 8, Judge Nathan has ordered "it may be necessary for the Court to hold an evidentiary hearing in order to independently assess whether the issues that have arisen were the product of bad faith, knowing misrepresentations, or an intentional failure to comply with discovery obligations. Such a hearing (to be conducted in-person when safely feasible) would allow the Court to assess the credibility of the assurances of unintentional error made by the line prosecutors involved in this case. In view of these issues, and in order to chart a course forward, the Court requires additional briefing from the parties. Accordingly, it hereby orders the parties to submit briefing setting forth their respective positions on the proper procedural mechanism for dismissal. This briefing must include legal authority supporting their proposed procedural sequencing and must explain what the practical difference is in their contrasting approaches. This briefing must also explicitly address whether the Court must make any determination at this juncture as to whether any of the Government lawyers acted in bad faith in order to resolve the parties’ procedural dispute, or, alternatively, whether such a determination should be made following dismissal, as part of the Court’s supervisory power in determining whether any of the lawyers involved engaged in ethical violations and/or prosecutorial misconduct. The Government has agreed that the Court’s power to resolve those questions continues after the indictment is dismissed. See Dkt. No. 352 at 2. Mr. Sadr shall submit briefing addressing these issues by July 15, 2020. The Government shall submit a response to Mr. Sadr’s briefing, setting forth its position with respect to these issues, by July 22, 2020. Mr. Sadr may file a reply by July 24, 2020."

 We'll have more on this - particularly the continuing withholding / cover up of documents.

Back in March: Judge Nathan: "The jury has reached a verdict.... The juror on video conference will stay on until he hears from me further." Jury entering! Judge Nathan: "I'll ask the foreperson. Has the jury asked a unanimous verdict?" Yes.

 Judge Nathan: Count 1, how do you find the defendant, with conspiring to defraud the US? Guilty. Count 2: Guilty.

Judge Nathan (after sidebar) "On Count 3, bank fraud, how do you find? Guilty. Under 1344, prong 1, neither (?) Count 4: bank fraud conspiracy:  Under 1344, prong 1, neither (?) Under 1344, prong 2, guilty

Judge Nathan: Count 5: Guilty. Count 6, money laundering conspiracy: Not guilty. Now polling jurors: one? 2? [soon the virtual juror] Let me confirm the verdict with Juror Number 7... I have confirmed it is his verdict. I will dismiss the jury.

  After Judge Nathan had declined to sent Sadr to jail pending sentencing but instead converted him to home detention, Inner City Press rushed out to do a Periscope video live stream (here) and try to ask Sadr a question. His lawyers left in a yellow cab, then he left. Inner City Press asked, Are you going to appeal? He answered softly, Of course. Then he too got in a yellow cab.

  On March 16 amid the Coronavirus COVID-19 crisis, jury deliberations ran into a problem. SDNY Judge Nathan proposed proceeding with ten jurors in the jury room and one connected from outside by video.

 Assistant US Attorney Michael Krause objected. But Judge Nathan said there are extraordinary circumstances and she would proceed thusly. Inner City Press live tweeted it all: thread here. More on Patreon here.

Ali Sadr is represented by lawyer Reid Weingarten of Steptoe & Johnson and, on November 25 as reported by Inner City Press by Brian M. Heberlig before U.S. District Court for the Southern District of New York Judge Alison J. Nathan.

  On Sunday, March 8 [alongside this song] the US Attorney Office which closed its case on March 9 past 9 pm submitted a letter, below.

 On March 12 in closing arguments, this happened:  As jury charge continues: Judge Nathan has just deployed the old saw about circumstantial evidence, that if people come into a windowless courtroom with wet umbrella, jurors are free to conclude it is raining outside. 

But what about Iran sanctions?

AUSA Krause: The defendant knew what he was doing violated US sanctions against Iran. The defendant is charged with six felonies. Mohammad Sadr was the beneficiary of the payments. ...

It's good to have money, in essence. This is not how lower income defendants are often treated in the SDNY. The case is USA v. Nejad,  18-cr-00224 (Nathan). More on Patreon here

Nigeria Misusing Citibank HSBC and JPMorgan Subpoenas SDNY Judge Schofield Is Told

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

SDNY COURTHOUSE, July 9 –    The Federal Republic of Nigeria in March asked U.S. District Court for the Southern District of New York Judge Lorna G. Schofield for subpoenas to Citibank, HSBC, JPMorgan and other banks.  

On July 9 Judge Schofield held a proceeding in which it was argued that Nigeria should have disclosed it would use the information in the UK. Inner City Press covered the proceeding.   

An entity called Process and Industrial Developments Limited was complaining about the use of the information in the Commercial Court in London "to set aside the arbitration award that P&ID obtained against Nigeria in 2017." 

 Judge Schofield ordered the parties to meet and confer and file simultaneous letter briefs on July 21.

July 6, 2020

After US Attorney Drops Guilty Verdicts on Iran Banker July 3 Expression of Disgust at SDNY

By Matthew Russell Lee, Thread, Patreon Song

SDNY COURTHOUSE, July 3 – Iranian banker Ali Sadr Hashemi Nejad has been on trial, charged with money laundering and violating US sanctions including through a Venezuelan infrastructure project.

  On March 16, after an unprecedented decision to proceed with ten jurors in the jury room and an eleventh at home, deliberating by video conference or FaceTime, he was found guilty on most charges. Live tweeted thread here.

 Late on Friday, June 5 this news dump: "Re: United States v. Ali Sadr Hashemi Nejadin, 18 Cr. 224 (AJN)  Dear Judge Nathan: The Government respectfully submits the enclosed application for an order of nolle prosequi of the Indictments filed in this case against Ali Sadr Hashemi Nejadin (“Sadr”) and Bahram Karimi. Respectfully submitted, /s/ GEOFFREY S. BERMAN  United States Attorney"

 Then on July 2, under Acting US Attorney Audrey Strauss, a news dump of 19 pages, with the names of those responsible (here on Patreon) including this: "Other Classified Material. During its post-trial review, the trial AUSAs discovered another item of classified material that would be subject to Rule 16 disclosure. This item has not been declassified. Given the Government’s request for a nolle prosequi, declassification in connection with this case is not likely to occur because components of the United States Government involved in the handling of the classified information would be unlikely to authorize use of the information in the absence of an active criminal prosecution with attendant Rule 16 obligations. (The Government has previously advised the defense of the foregoing.) Suppression. The defendant’s post-trial motions include a motion to reconsider the Court’s partial denial of their motion to suppress email evidence. On February 20, 2020, the FBI sent to AUSAs Krouse, Kim, and Lake and ADA Lynch an email referencing a June 7, 2016 FBI FD1057 relating to Farshid Kazerani (who testified as a Government witness at trial). Noting that the report was classified, the FBI email did not attach the report, but described it as “from when our Seattle office made contact with Kazerani in Seattle to notify him that FBI New York was trying Case 1:18-cr-00224-AJN Document 354 Filed 07/02/20 Page 5 of 19 The Honorable Alison J. Nathan July 2, 2020 Page 6 to get in contact with him,” and that “Kazerani’s statement acknowledged the request, his current school and work situation and his contact information.” Following trial, in connection with his search for classified information, discussed above, AUSA Krouse requested that report..."

Now on July 3, a letter from Nejad's counsel (full letter here on Patreon) including: "Re: United States v. Ali Sadr Hashemi Nejad, Case No. 18-cr-224 (AJN) Dear Judge Nathan:  We are surprised and disappointed by the revelations in the government’s letter of July 2, 2020 (Dkt. 354). We are nearly as surprised and disappointed at some of the positions taken by the U.S. Attorney’s Office’s “Criminal Discovery Coordinator and Professional Responsibility Officer” to minimize, deflect, and deny, avoiding any acknowledgment or acceptance of responsibility for the government’s obvious, repeated failures and its notable lack of candor. These new revelations fully justify the relief sought by Sadr. We respectfully request that the Court enter forthwith Sadr’s proposed order (Dkt. 349-2) granting a new trial, stating that the “verdict is vacated, and has no legal effect,” and dismissing this case with prejudice.   The government minimizes its disclosure violations related to classified evidence, and remarkably defends AUSA Laroche’s statement to the Court that there would be no classified discovery or CIPA litigation by claiming that AUSA Laroche’s “evaluation has in fact proven to be correct.” Ltr. at 16. To be clear: the only reason there was no classified discovery or CIPA litigation is that the government improperly failed to disclose exculpatory evidence located in “classified” materials prior to trial." We'll have more on this - particularly the continuing withholding / cover up of documents.

Back in March: Judge Nathan: "The jury has reached a verdict.... The juror on video conference will stay on until he hears from me further." Jury entering! Judge Nathan: "I'll ask the foreperson. Has the jury asked a unanimous verdict?" Yes.

 Judge Nathan: Count 1, how do you find the defendant, with conspiring to defraud the US? Guilty. Count 2: Guilty.

Judge Nathan (after sidebar) "On Count 3, bank fraud, how do you find? Guilty. Under 1344, prong 1, neither (?) Count 4: bank fraud conspiracy:  Under 1344, prong 1, neither (?) Under 1344, prong 2, guilty

Judge Nathan: Count 5: Guilty. Count 6, money laundering conspiracy: Not guilty. Now polling jurors: one? 2? [soon the virtual juror] Let me confirm the verdict with Juror Number 7... I have confirmed it is his verdict. I will dismiss the jury.

  After Judge Nathan had declined to sent Sadr to jail pending sentencing but instead converted him to home detention, Inner City Press rushed out to do a Periscope video live stream (here) and try to ask Sadr a question. His lawyers left in a yellow cab, then he left. Inner City Press asked, Are you going to appeal? He answered softly, Of course. Then he too got in a yellow cab.

  On March 16 amid the Coronavirus COVID-19 crisis, jury deliberations ran into a problem. SDNY Judge Nathan proposed proceeding with ten jurors in the jury room and one connected from outside by video.

 Assistant US Attorney Michael Krause objected. But Judge Nathan said there are extraordinary circumstances and she would proceed thusly. Inner City Press live tweeted it all: thread here. More on Patreon here.

Ali Sadr is represented by lawyer Reid Weingarten of Steptoe & Johnson and, on November 25 as reported by Inner City Press by Brian M. Heberlig before U.S. District Court for the Southern District of New York Judge Alison J. Nathan.

  On Sunday, March 8 [alongside this song] the US Attorney Office which closed its case on March 9 past 9 pm submitted a letter, below.

 On March 12 in closing arguments, this happened:  As jury charge continues: Judge Nathan has just deployed the old saw about circumstantial evidence, that if people come into a windowless courtroom with wet umbrella, jurors are free to conclude it is raining outside. 

But what about Iran sanctions?

AUSA Krause: The defendant knew what he was doing violated US sanctions against Iran. The defendant is charged with six felonies. Mohammad Sadr was the beneficiary of the payments. ...

It's good to have money, in essence. This is not how lower income defendants are often treated in the SDNY. The case is USA v. Nejad,  18-cr-00224 (Nathan). More on Patreon here

Turkey Halkbank Wants Delay to 2022 and to Recuse Judge Berman With Motion Due July 14

By Matthew Russell Lee, Patreon, Thread Video
Honduras - The Source - The Root - etc

SDNY COURTHOUSE, June 30 – Turkey's Halkbank has officially given up its strategy of refusing to official appear in the US criminal case against it, and on February 25 appeared and agreed to be indicted. Inner City Press live tweeted it here.

  On March 31 in a telephone conference Inner City Press also live tweeted, here, Halkbank dropped King & Spalding and swapped in as its counsel Robert Cary of Williams and Connolly. On Halkbank's behalf he pled not guilty to all counts of the indictment.

   Cary said he wants to travel to Turkey for a third time to discuss with Halkbank whether or not to file a motion for recusal of U.S. District Court for the Southern District of New York Judge Richard M. Berman.

***

June 29, 2020