Cogito Ergo Non Serviam

Wells Fargo Should Face RICO Charges

Wells Fargo is one of America's largest financial institutions, and under any rational reading of the law, it is a corrupt organization similar to the Mafia. The company's CEO, John Stumpf, should be in jail just as surely as John Gotti was. The company created fake accounts relying on falsification of record to generate fees. USA Today reported, "Wells Fargo has fired about 5,300 employees over the fake accounts. Those accounts led to $2.6 million in fees to affected customers that have since been refunded. The company has agreed to pay $185 million as part of a civil settlement." The actions clearly violate the Racketeer Influenced and Corrupt Organizations Act, and the Justice Department needs to come after the bank, or it will happen again. Yesterday's Senate hearings are only a sideshow.

HG.org explains "Title 18, Section 1961 of the United States Code sets forth a long list of racketeering activities, the repeated commission of which can form the basis of a RICO Act claim. These underlying federal and state offenses exist independently of the act, and include the crimes of homicide, kidnapping, extortion, and witness tampering. Racketeering activities also include property crimes such as robbery and arson. A number of financial crimes are also listed, such as money laundering, counterfeiting, securities violations, as well as mail and wire fraud." Mail and wire fraud are the crimes involved here.

The legal website adds, "The RICO Act itself defines the term pattern as two or more acts of racketeering activity within a 10-year period. However, the Supreme Court has weighed in on this issue as well. According to the Court, to qualify as a pattern, the criminal activities must be related and continuous."

"The scheme at the nation's largest retail bank hits closer to home for some consumers in part because it wasn't executed by sophisticated cybercriminals, but by everyday branch-level workers. Employees opened sham credit card and deposit accounts to meet sales quotas. In some cases they moved customers' money without permission, leading those customers to face fees and other charges."

If there are 5,300 employees who have been fired, clearly there are two or more acts of fraud perpetrated within the 10-year period. Related? All victims were Wells Fargo customers and all the perpetrators were employees thereof, so relatedness is clearly there. Continuous? One doesn't get to 5,300 employees fired if the illegal behavior is not continuous.

Yet, the Washington Post noted, "Thomas Curry, the U.S. comptroller of the currency, who heads one of the agencies responsible for examining and auditing financial institutions, testified that his office could have done more to stop the scheme and said the agency would be searching for similar practices at other banks.

"'The actions against Wells Fargo highlight that we must continue our efforts to improve and refine the agency's supervisory program, to sharpen our early warning processes, and to enhance our supervisory capabilities, particularly with respect to our largest, most complex banks,' Curry said."

Yet, Mr. Stumpf is still the CEO. The International Business Times stated, "Carrie Tolstedt, an executive who oversaw Wells Fargo's Community Banking group'performance pay,' including stock and equity, between 2012-2015."

Senator Elizabeth Warren (D-MA) stated, "The only way that Wall Street will change is if executives face jail time when they preside over massive frauds." RICO charges, which allow triple damages as well as jail time, is the right tool to achieve this.

© Copyright 2016 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.



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