Wells Fargo to Pay $3 BILLION for Faking Accounts

Now it’s time to drill the investigation further — faking loan accounts in which the debtor owes no money to WFB either directly as owner or servicer or indirectly through other conduits or companies.

THIS JUST ONE EXAMPLE AMONG HUNDREDS WHERE THE MEGABANKS HAVE USED THEIR SHEER SIZE TO COMMIT ILLEGAL ACTS THAT WOULD PUT THE AVERAGE JOE IN JAIL. Here is Wells Fargo screwing both their own investors and their own customers over many years involving millions of accounts. The intended result was to artificially inflate the value of their stock trading on the stock market.

Just like inflating appraisals to get consumers to sign on the bottom line because the bank was no longer at risk and had everything to gain in trading and issuing derivatives based on the mortgages of unsuspecting consumers while selling fraudulent securities to unsuspecting investors.

If you go back to my articles starting in 2006, I said that a true investigation would reveal that both investors and borrowers were screwed in the same way. In both cases neither borrowers nor investors got what they bargained for. In both cases the borrowers and investors lost money. In both cases the bank made money on the way up and on the way down because they knew the appraisals were false and the terms could not be performed by borrowers whose income was less than the reset payments after the teaser period.

Such an investigation will yield very high results. And it will throw a light on Chase claiming WAMU loans, OneWest Claiming IndyMac loans etc. These all involve the fake creation of loan accounts in which the name of a Bank is used to hide the fact that there is no lender and no financial institution involved. It’s all about getting revenue from what is falsely presented as foreclosures. 

https://www.nytimes.com/2020/02/21/business/wells-fargo-settlement.html

From 2002 to 2016, employees used fraud to meet impossible sales goals. They opened millions of accounts in customers’ names without their knowledge, signed unwitting account holders up for credit cards and bill payment programs, created fake personal identification numbers, forged signatures and even secretly transferred customers’ money.

“This case illustrates a complete failure of leadership at multiple levels within the bank,” Nick Hanna, U.S. attorney for the Central District of California, said in a statement. “Wells Fargo traded its hard-earned reputation for short-term profits, and harmed untold numbers of customers along the way.”

As part of its agreement with the S.E.C., the bank will set up a $500 million fund to compensate investors who suffered when Wells Fargo failed to inform them that its community banking business was not as strong as the fake accounts made it seem. The money is included in the $3 billion settlement total.

 

Special note to stock watchers: If this ever catches up with the major banks and many smaller ventures like OneWest the liabilities could wipe them out of existence.

Posted in Wells Fargo |