Feds clamp down on banks with faulty AML programs

This week, news concerning US Bank’s inadequate Anti-Money Laundering programs surfaced… The bank agreed to pay $613 million as part of a Deferred Prosecution Agreement (DPA).  You may be asking, “what is a Deferred Prosecution Agreement.”   In layman’s terms, a DPA allows the criminal to pay a penalty rather than admit to a crime.  Google the term, and you will recognize several names, like US Bank, JP Morgan Chase, US Bancorp, Deutsche bank, Commerzbank, HSBC Bank, and many others. 

As a law-abiding citizen, whose worse crime was to steal a pack of cigarettes when I was 16, I have a question.  A bank executive with a U.S. Bank can be an accomplice to a $2 billion crime by using his bank to help someone else steal, then escape the law legally by paying a bribe to the feds?  I compare the banker’s crime to driving the getaway car.  He then “promises” to never do this crime again?  Of course he won’t, because the “really” bad guy is in prison!   Deferred and non-prosecution agreements don’t work.  It’s like spanking your kid with a napkin.  He appreciates the gesture, but it doesn’t “defer” him from doing it again. 

The federal prosecutors and bank regulators worded their press release… “alleged failings of its anti-money laundering programs, including an effort to HIDE those deficiencies from its regulators…..”  Excuse me, but programs don’t fail… crooked people fail to act within the law (I believe it’s called a “crime”), or, as in this case, intentionally conceal the facts!  Seriously, exactly when was it that Trump mentioned something about “cleaning the swamp..?”  If this is his idea of cleaning anything, then he needs to revisit his promises!!

Another bank under the spotlight right now is Wells Fargo Bank… Wells Fargo had weak directors on the board that allowed the CEO to violate banking laws.  The Board of Governors of the Federal Reserve System slapped sanctions on the bank, fired the CEO, and blamed the bank’s board of directors for the whole mess.  Again, nothing of a “criminal” nature happened?

The ONLY way America will be great again is if “we, the people,” clean the swamp.   And that will only happen when we quit giving these criminals our money!  The Principal Group of Company commit crimes for a reason.. there is no accountability.  Banks and other financial institutions will continue to steal until those responsible go to prison.  The problem will not resolve soon.  Our elected officials can’t get past the trivia.  Our country WILL collapse, and when it does, issues we have today will seem like small pieces of dung on a donkey’s ass.  We demand action on issues that matters least, while our government and financial institutions steal our heritage and future.  

Principal can steal billions from your savings and stuff your money in “shell companies“… we and our government ignore their crimes.  Banks like Wells Fargo team up with 401(k) plan providers like Principal to wash profits intended for your retirement.  Today, a “flood” of your profits are flowing through our banking system!  Your money has to be laundered through the bankingWells Fargo system to be reused… Do you really believe Wells Fargo was faking over two million bank accounts for the fees?  What fees!  If you didn’t know Wells Fargo had opened an account using your identity, you wouldn’t be making deposits into it anyway, so where was the payment for those “fees” coming from?  The fake accounts would have no money in them!  Wells Fargo was probably creating two million fake accounts for another reason… so a handful of their buddies like Principal could launder billions of dollars through those accounts without setting off alarms due to excessive deposits (over $10,000).  The real reason the US bank was accused of “faulty money laundering programs” was that they weren’t reporting excessive cash deposits to the feds!  With US Bank, Scott Tucker was most likely making deposits exceeding $10,000, and the bank failed to report those deposits as required by law.  If Scott had opened two million fake accounts using other identities, as Wells Fargo did, and kept his deposits under $10,000, there would not have been a problem.  He and the US Bank could stuff $10,000 deposits into fake accounts all day and not get caught.

Mark Hanrahan
Principal’s U.S. Property Separate Account Managing Director Mark A Hanrahan

Laundered money and shell companies… 333 Market Street in San Francisco…

When Wells Fargo Bank offered to sell a $150 million office building purchased in 2005, to Principal Real Estate Investors for $370 million dollars a year later in an off-market deal, Principal’s Managing Director at the time, Mark Allen Hanrahan, jumped on the “opportunity” to purchase the building for the Principal U.S. Property Separate Account. Wells Fargo Bank made a cool $220 million on the deal, and I suspect part of that $220 million may have found its way into a few thousand of those two million “fake accounts.”  If you divide $220 million by $10,000, you would need 22,000 fake checking or savings accounts to launder the money.  This photo of Hanrahan was taken the same day Principal fired him in 2015…. after being booked on a felony charge for kidnapping a young hispanic male at gunpoint to find drugs!  

Rod Vogel
Naples, Florida

Hanrahan also owned a “shell company” with his former boss, Principal Real Estate Investors Senior Managing Director Rod Vogel They acquired the property in 2013, after 333 Market Street was sold.   Their shell company is located in a gated community in Naples, Florida, pictured above.  According to the State of Florida, Vogel owns or owned a total of ten shell companies in South Florida, all with addresses found in three individual multi-million dollar properties found in Naples.  Vogel draws a handsome salary, and I can’t fault his wanting to enjoy living in three separate mansions in south Florida, but it happens that all three of these homes are located within a two-mile radius, and two are only two blocks from each other... one of the homes appears to be a condo with several swimming pools, and all are on golf courses… more like a communal housing arrangement for avid golfers!  Perhaps a “retreat” for Principal executives?  Vogel “owns” several shell companies at each location… and is responsible for sub-advising billions of dollars in 401(k) retirement funds for Principal Life Insurance Company!  The good news is that the Department of Justice is finally cracking down on money laundering and other corporate financial crimes.  If Vogel is hiding millions of your profits in his shell companies, I suspect the feds are not far behind!  Wells Fargo

Wells Fargo “back office” at 333 Market Street, San Francisco, CA, purchased for the Principal U.S Property Separate Account for $370 million in 2006.  Wells Fargo Bank purchased the same building from MetLife a year earlier, in 2005,  for $150 million.

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Author: Dennis Myhre

Mr. Myhre can be contacted at..... dmyhre@fiduciaryfactor.com