Monday, August 20, 2012

Banks Can Legally Steal Customer Funds From Private Checking Accounts

Susanne Posel, Contributor
Activist Post

In 2007, the Sentinel Management Group (SMG) collapsed, leaving many segregated customer funds lost after they had been used as collateral. After a plethora of lawsuits and creditor claims, a a decision earlier this month in the 7th Circuit Court placed the banking cartels ahead of customer claims for funds returned. Essentially, the Bank of New York Mellon (BNYM) sued to be first in line for return on stolen customer account monies – and won the right by the US court system.

In the mainstream media (MSM), the SMG collapse and subsequent ruling in favor of BNYM was touted as a difficulty “for customers to recoup money lost”.

SMG, a Chicago-based futures broker, had stolen more than $500 million in segregated customer funds to use as collateral on a loan to BNYM for in-house proprietary trading operations. Their books were audited by the National Futures Association (NFA), however the NFA admitted that they could not understand the convoluted mess they were provided by SMG to sign off on. And yet they did; and approved the audit.

BNYM sued SMG to re-coup any monies owed to them. However, these monies were customer segregated funds that SMG stole and re-hypothecated.

In federal court, John D. Tinder, US Circuit Court Judge ruled “that Sentinel failed to keep client funds properly segregated is not, on its own, sufficient to rule as a matter of law that Sentinel acted ‘with actual intent to hinder, delay, or defraud’ its customers.”


This means that once a banking customer deposits their money into an account with a bank, the funds become property of the bank. The customer, at the point of deposit, relinquishes all rights to that money regardless of any laws in place, legal assurances, claims or guarantees; and this extends from investments to private checking accounts.

Once the bank has physical possession of your money, they own it and can use it for any means they deem fit. The veil has been lifted on separation of customer and bank funds. They are now legally co-mingled.

The bank could use it as collateral (as SMG did), to pay off debts, or place it on the stock market to bump up their trading with extra cash. And in the event that the customer allocated funds are lost, the bank does not owe the customer the money back.

Essentially, once your deposit money in your bank account it is gone.

Fred Grede, SMG trustee remarked: “I don’t think that’s what the Commodity Futures Trading Commission had in mind. It does not bode well for the protection of customer funds.”

The MF Global (MFG) scandal rocked the investment world because Jon Corzine, Chief Executive Officer of MF Global, instructed the transfer of $200 million from their customer segregated funds to cover the corporation’s overdraft account with JP Morgan Chase.

Corzine emailed this order just three days before the official collapse of MFG. At the same time Corzine was moving customer money, this missing $6.3 billion dollars were used on bets on European indebted nations. As those European nation’s credit ratings plummeted, JP Morgan profited financially.

Our financial institutions have been planning for a financial collapse wherein the US government will not offer assistance. The resolution plans required by the Federal Reserve Bank, described schemes to have the major domestic banks remain afloat by selling off assets, finding alternative sources of funding, reducing risky measures that make a quick buck. These strategies were to be perfected with “no assumption of extraordinary support from the public sector.”

Selling “non-core assets” without upsetting shareholders, while protecting the monetary system, taxpayers, and creditors is the work of the mega-banks who have contributed solely to the destruction of the global financial markets. Bank of America (BoA) and Citibank have already begun to liquidate some of their assets – an action a bank takes when they are insolvent.

Both mega-banks and credit unions have been silently altering their deposit/withdrawal policies to deter customers from emptying out their accounts.

Because the digital record of monies is greater than the physical cash held by banks, this is a scheme to stave off a “run on the banks”.

With the PATRIOT Act, signed in 2001 by former President George W. Bush, and extended in 2011 by President Obama, it is stated that all banks must record all banking transactions with photo ID and fingerprints that will then be sent to an FBI database wherein all banking information tied to each individual on file can be traced for future reference.

Of recent, when withdrawing cash from an ATM, the daily allotted amount has decreased with some banks, thereby forcing the customer to go into the branch and extract the difference with a teller. At this point, according to anonymous informants, the customer is taken into a backroom to be questioned as to why they want the cash, what they are purchasing with the cash, and why they are not choosing to use a debit card or another form of digital trade to make the purchase. These questions are not only intrusive, they are illegal.

Some anonymous sources have said that banking representatives who conduct the interrogations are directed to keep a record of customer responses on an online application that will be sent to the FBI in conjunction with PATRIOT Act mandates on tracking banking activity.

While American citizens sit on the fence about whether or not they even subscribe to a banking collapse in the US, globalists like George Soros are investing heavily in gold.

Soros recently “unloaded over one million shares of stock in financial companies and banks that include Citigroup (420,000 shares), JP Morgan (701,400 shares) and Goldman Sachs (120,000 shares). The total value of the stock sales amounts to nearly $50 million” and then purchased 884,000 shares of Gold with SPDR Gold Trust.

The mega-banks, through Wall Street, are also acquiring firearms, ammunition and control over private mercenary corporations like DynCorp and ‘Blackwater” as authorized by the Department of Defense (DoD) directive 3025.18 .

DynCorp is a military-based private mercenary contractor that provides (among other services) intelligence training and support, international security, contingency plans and operations. Ninety-six percent of their funding is based on annual revenues from the US federal government.

The international branch of DynCorp has operated as a “police force” even assisting local law enforcement during Hurricane Katrina.

Named as investors for the amassing of gun and ammunition manufacturers are Citibank, BoA, Barclays and Deutsche Bank who are pouring money into Cerebus and Veritas Equity who have taken over private corporations involved in controlling riot situations.

The Federal Reserve Bank, one of the heads of banking cartels, has their own police force which operates as a protective security for the Fed against the American public. As part of the Federal Reserve Act signed in 1913, the designation of a Federal Law Enforcement – special police officers that are exclusively regulated by authority of the Fed (whether in uniform or plain clothes. These specialized police officers (who train with Special Response Teams) can work in tandem with local law enforcement or US federal agencies. These officers are heavily armed with semi-automatic pistols, sub machine guns and assault rifles as well as body armor.

Just this month, the Kaspersky Lab discovered Gauss, a banking surveillance virus believed to have the capability of stealing money out of customer’s bank accounts, as well as spying on banking transactions, stealing login information for social networks, email and instant messaging. So far, Middle Eastern banks have reported having been affected by Gauss – however both Citibank and Ebay’s Paypal have also been infected by this new viral threat to our banking systems.


It is clear that the financial collapse could be imminent. Banks are not only preparing with contingency plans, but also amassing a private police force for protection. With the legalization of stealing from customer-secured funds, combined with a possible banking virus that could provide the perfect cover for an all-in-one banking holiday, the stage is being set for utter financial devastation.

Once all customer funds have been electronically transferred into off-shore accounts, the specialized police forces and hired mercenaries would be allocated forward to protect the technocrats from retaliation for their crimes.

The banking holiday will not come with flashing neon signs. Our warnings are right in front of us, if we choose to see them.

You can support this information by voting on Reddit HERE

Susanne Posel is the Chief Editor of Occupy Corporatism. Our alternative news site is dedicated to reporting the news as it actually happens; not as it is spun by the corporately funded mainstream media. You can find us on our Facebook page.


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15 comments:

Anonymous said...

The problem here is the definition of the word "legally." In a country where the Constitution has no legal standing, where international laws are arbitrary (strictly defended for some countries and disregarded for others), where legally defined terrorist groups such as al Qaeda and Mek are supported by our government, the word "legally" has no definable meaning.

The phrase, "legal customer funds" has nothing to do with "legal".

The banks simply declare your deposits belong to them. Don't be shocked when the banks take "their" money from you.

Anonymous said...

If you still have money in a bank, you deserve to be robbed by them.

canobs said...

Thanks for these Interesting but not very reassuring informations.___ Customers beware, all at your own risk.

Anonymous said...

This is chilling

LadyRavenhaire said...

Not only can they steal your money, but you house, too, even if you own it! I had heard stories of banks repossessing homes, they don't hold a mortgage to, but someone in my town actually had been illegally evicted & all his possessions robbed by Bank of America. Not only did he not have a mortgage with Bank of America, but he had paid off his mortgage over 10 years ago to a loca small bank & credit union. The judge just threw out all the evidence the man brought & refused the man's demand that Bank of America show proof of mortgage ownership or of any funds loaned to him. According to the judge if Bank of America says they hold a mortgage you defaulted on it must be true. I wonder how well that works with someone robbing a local 711. "And you honor I say I wasn't 5000 feet close to that 711 & if I say so, it must be so." Last I heard man is suing them, but in the meantime, he lost everything he owned in the house, photo albums, family memories, etc..

Christine Erikson (aka Justina) said...

fractional reserve banking has always meant that this situation is in play. Any money you put in the bank is in use by them to make money for themselves before you get it back.

Anonymous said...

The problem here is also the word "bank", which CMG wasn't. Just because they hold onto money doesn't make them a bank. The way to avoid confusion is to define a bank as an FDIC-insured institution. CMG was a money-management company, not a bank. Now yes, I would agree that there are plenty of problems with banks, as well as with futures brokers, stock brokers, money managers, etc. but the way this article is written confuses the issues involved.

-Dboy

The Hairy WoodPecker Speaks said...

OK Dboy. Even if 20% ofit is cold hard fact - banks make their money by devising ways to confiscate it. "Fees" my ass. They have been stealing from us for years and the only "business"that makes a regular practice of punishing it's own customers by taking what does not belong to them. 5/3rd devised a way to bilk it's customers by manipulating when deposits and withdrawals were recorded and in what order until sued - a practice netting them millions on everyday transactions at the tellers window. They settled out of court by greasing the palms of the law firm doing the class action suit. They're crooks in suits and ties, period.

Willfred Tiberius Fergeson said...

I got the rope!

Anonymous said...

Many of us don't have significant deposits to lose. Instead we have credit card debt. I wonder what will happen with our credit balances during the upcoming bank holiday - will those disappear too? Ha ha. Not likely. Or will the banks jack up interest rates to 100 percent p.a. I would appreciate the author's take on this... Thanks

whisker child said...



to LadyRavenHaire:

I would REALLY be interested to know what town and state that's in.
Thanx

Unknown said...

If it is a "deposit" then the right of property in it passes to the deposit taker (bank). If it is a "reposit" then the right of property in it remains vested in the one making the reposit.

Banks have always operated-in-fact on the deposit function. The bank obtains both legal and actual possession of the thing deposited.

Assume that I were to win $1 billion in cash in a multi-state powerball lottery. The cash would become mine and I would own it. Yet the next day when I deposit the cash into my neighbourhood bank, the cash becomes the legal and actual property of that bank, and I have unwittingly made that bank an equal partner in my winnings.

The same applies to paychecks, illegal drug money, and to anything that is deposited. The deposit function is the be-all-and-end-all of the global oligarch control structure. Always has been - this is not something new. They are merely applying the same principle to reposits as well as deposits.

Think that you own what is in your safety-deposit box? Not to the extent that the name safety-"deposit" box is legal notice that the bank possesses the legal right of property in the contents as and when they are in the bank's possession.

The banking system can issued and collect interest on billions in bonds secured by the aggregate contents of their safety-deposit-boxes, and it won't become an issue unless and until the bonds start defaulting for other reasons.

Linda said...

I told my wealthy In-I-Have-NO-Choice-Laws. I told them over 5 years ago this would happen and since then I am not allowed in their presence. Which is fine they are Highly Educated IDIOTS, Know it Alls. Can't wait until they do take their money. HEY they will probably blame me!

Troy Eplin said...

I am so glad I bank with a credit union for vets

Troy Eplin said...

this is why I have my money in cash or in a credit union for veterans these civilian banks rob you blind

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