Friday, August 24, 2012

Customer Deposits Are Property of the Bank: Close Your Account NOW

Susanne Posel, Contributor
Activist Post

In June of 2012, Eric Bloom, former chief executive, and Charles Mosely, head trader of Sentinel Management Group (SMG) were indicted for stealing $500 million in customer secured funds. Both Mosely and Bloom were accused of “exposing” customer segregated funds “to a portfolio of highly risky derivatives.”

These customer funds were used to “back up personal investments” which were part of “collateral for a loan from Bank of New York Mellon” (BNYM). This loan derived from stolen customer monies was “used to purchase millions of dollars worth of high-risk, illiquid securities, including collateralized debt obligations, or CDOs, for a trading portfolio that benefited Sentinel’s officers, including Mosley, Bloom and certain Bloom family members.”

Fast forward to August 9th of 2012, and the 7th Circuit Court of Appeals (CCA) rules that BNYM can be moved to first in line of creditors over the customers that had their funds stolen by SMG.

When a banking customer deposits their money into their bank account, the Federal Deposit Insurance Corporation (FDIC) and Securities Investor Protection Corporation (SPIC) are in place to protect the customer from fraud or theft. The ruling from the CCA means that these regulatory systems will not insure customer funds, investments, or depositors and retirees who hold accounts in banks. In fact, the banking institution is now legally allowed to use those customer funds deposited as collateral, payment on debts for loans made, or free use on the stock market to purchase investments as the bank sees fit.

Fred Grede, SMG trustee, explained that brokers are no longer required to keep customer money separate from their own. “It does not bode well for the protection of customer funds.”

Since the ruling gives banks the right to co-mingle customer funds with their own, no crime can be committed for the use of customer deposited monies.

According to Walker Todd, former lawyer for the Federal Reserve Bank of New York and Cleveland: 

Basically, there is a new 7th Circuit opinion saying that there is no reason to impose a constructive trust on a lender’s takings of customers’ funds from client commodity firms that were used (inappropriately) to secure the firms’ borrowings, as long as the lender can say that it did not know WITH CERTAINTY that customers’ funds were being repledged. Negligence and misappropriation (vs. knowing criminal intent) are now a sufficient excuse for letting the lender keep the money and go to the head of the line for distributions in bankruptcies of the client commodity firms.
When a customer deposits money into a bank, the bank essentially issues a promise to have those funds available when the customer returns to withdraw the deposited amount. When the same customer withdraws funds from their account (whether checking or savings) the customer assumes that the bank has enough funds to cover their withdrawal; including the presumption that their monies are separate from the bank’s assets.

Now, those funds are up for grabs by the bank at their discretion without explanation to the customer – nor is the bank obligated to recoup the customer should they “lose” those funds due to bad loans, bankruptcy or stock market loss.

In Texas, Pamela Cobb, manager of Bank of America (BoA), stole an estimated $2 million from customer funds for personal use. Cobb had been taking customer segregated funds since 2002.

Customers have complained of fraudulent charges placed on their accounts that BoA cannot explain. When the customer brings these charges to the in-house fraud department, they are given the run-around until they acquiesce.

Other customers have had their private possessions stolen right out of their safe deposit box held at BoA. The safe deposit box was drilled into and the contents shipped to the BoA corporate holding center in South Carolina.

In 1992 to 2003, Citibank called their theft of customer funds “account sweeping” wherein they stole more than $14 million from customers nationally. Using computerized credit card processes to remove positive and negative balances from customers, the scheme included double payments or funds paid out on returned purchases that were then attributed back to the customer.

At Chase bank, an anonymous employee opened an account under a customer name (targeting an Alzheimer’s sufferer), complete with a personal debit card. An estimated $300 per day was withdrawn on the fraudulent account. When family representing the victim alerted Chase, they brushed them off with an internal investigation claim – even as the family sought legal action.

Banking fraud against the elderly has risen of late, since banks realize they can steal massive amounts of cash from their aging customers with little to no repercussions.

The recent ruling on SMG has given the banking industry the legal backing they have been lacking when stealing from their customers.

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.”

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 the 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.

Recently, 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, 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 integrations 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.

Customer funds are no longer secure, no longer backed by the FDIC or other insurance corporations, and banks are legally allowed to co-mingled customer money with other funds of the bank. The only safe place for your money is with you.

Now is the time to close your bank account.

You can support this information by voting for it 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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Anonymous said...

aaand, it's gone.

Anonymous said...

I guess "customer secured funds" means it's up to the customer to secure his funds, otherwise, tough shit.

Anonymous said...

The days when your cash was "safe in
a bank" are long gone. When you put
money in an institution who has real
control "them"? I can
remember as a kid we thought our
babysitter was silly for hiding her
hard earned $$$ in a can in the ground.
Wise wise girl that babysitter.

Anonymous said...

Lol, also when I read the article the adds in the middle were for opening bank accounts!

Anonymous said...

Its the END!

Anonymous said...

Credit Unions are safer, in particular, large credit unions like Boeing Credit, since they are tied to the regional economy.

But even they won't be safe havens once the dollar is fully devalued. What's the point of having loads of cash in some virtual account if it's worthless?

Better buy some food and firewood, friends.

Anonymous said...

Dale grumbles:
Posel presents many excellent points highlighting ways that banks are ripping us off, but her exaggeration only weakens the case.

Posel states: "Other customers have had their private possessions stolen right out of their safe deposit box held at BoA."

The link provided refers to only one customer (husband and wife) and the possessions are being returned. The attorney for the couple says he has never heard of such a thing. So it is not a common practice, but a disgusting anomoly, based on a mistake. Good evidence does not need to be exaggerated.

Likewise the link referring to "anonymous informants" (how solid is that?) is dead.

Like Jefferson, I would like to see the predator banks crushed. But Posel continues to dilute the case against banks by distorting and exaggerating evidence. We need solid journalism, not propaganda...even if we agree with the thesis that banks have gotten the legal freedom to operate like thieves.

And as for taking your money out of banks, please realize that if you want to buy or refinance a house, it is required that your cash (for downpayment, etc) be "seasoned" in a bank. If you hide it under your mattress, it will not be acceptable. This is presumably to guard against the use of "ill-gotten gains."

Of course the banks, which are behind the laws requiring money be held by them for use in real estate (and other) transactions, have used their wealth to buy laws which allow them to get a way with "ill-gotten gains."

In making a moral case against bank fraud, it is important not to distort the evidence....which ends up working in the banks interest, by discrediting the criticism. The evidence for bank fraud is adequate without the hype.

Anonymous said...

No use for Banks since 2001, they are preditory.

Anonymous said...

The Democrats have bill they will bring up after the election, HR.4646 will allow banks & credit unions to impose a 1% transaction fee on every bank transaction, even from your checking to davings. Started 1/12013 all SS checks will be sent to direct deposit, no more SS checks will be printed period. Obama said no one making under $250K per yr would see a tax increase, what would you call this? If you get a SS deposit of $1000.00 a month, $10.00 comes off the top & for each time you use a debit card, check to pay a bill, you will have a 1% fee deducted from your acount.

The only way to get around this if it becomes law is to take out all but the bare mimium to keep your acount open. This bill has been under the radar for two years & not a peep from the MSM & we know why!

If you have love ones with 401K's & IRA's you should go to & go back to Aug,8th,2012 & read how to protect those acounts from the gov sticky hands.

You better have enough food, a way to get clean drinking water, a good rifle for small game & a gun to protect your family. Also become your own banker! TSHHTF folks & it only get worse as we get to end of the dollar's life, it has been on life support for more than 30 yrs & the game is over but the band still plays on as we sink into the abyass! Good luck & GOD Bless!

Anonymous said...

Good thing this didn't involve Eric Bloom from Blue Oyster Cult!

Anonymous said...

The Future: by Leoarnd Cohen.!.
To celerbrate 4th year! The trail has been long & hard to follow, but it has been worth every step! I saw some post above who will not like the future, you have to open up your mind & lose the old baggage you keep hanging onto, this different & will be by no means easy, those in power have made their bed & will fight like heck to keep it, but the world has spoken! Again, Happy 4th FOFOA!!!!!

Mr. X said...

While the bankers will forever be evil bastards, and while they will try forever through legal and illegal means to steal your hard earned money, this story is not true. Please research and focus your energies where they are needed.

Anonymous said...

X marks the spot of what? Tell us more Mr X, don't leave us in the dark!

Anonymous said...

"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."...ok guys, nothing has changed here because the Federal Reserve is not the Federal government. The big banks under 3025.18 does not get to use Black Water or whatever the new name will be for them(they change thier name all the time). What this directive does say is that the government gets to protect federal property not Federal Reserve institutions. This seems to be two articles mixed into one. The fereal government will squeeze us to keep the house of cards up(so they can keep power) and the big banks will never give you your money in a real finacial crissis cause they have already spent it.

Anonymous said...

Having worked for Dyncorp in Senior management, I can assure you they were not in the Hurricane Katrina security program.

It was Blackwater, as I was the C1 manager over the program at the time. I worked for the from October of '05 through sep of '06 and we had 650 men on ground doing the National Guard duties for FEMA.

Anonymous said...

This article is nothing but bull crap. Any one who takes all their money out of the banks is a moron.

Anonymous said...

While much of this article is embellished, the central theme is clear. We're fucked. Period.

Choo Hader said...

Rule of law in USSA has been perverted. Look at how MF Global account holders got "MFed." Jon Corzine STOLE $3B in segregated customer accounts - LOST IT ALL - and hasn't even been indicted, and never will because he's an insider.

Physical silver bullion is the best place to put any long term family wealth you don't need access to in the short run. Far more undervalued than gold for MANY reasons to long to list here.

enayetlorin said...

Actually people have to be very conscious about their financial activities. Have to be thinking about getting loan from bank. There are very information given here that's on bank loan which is very important for all. Thanks for post this nice report. Keep it up:)
choosing a business account online

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