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Tag: Federal Reserve

  • BULLETIN: Traders Operated ‘The Cartel’; Banks Charged Criminally

    breakingnews72Forex traders at four multinational banks — Citicorp, JPMorgan Chase & Co., Barclays PLC and Royal Bank of Scotland plc — formed “The Cartel” and conspired to manipulate the prices of the U.S. dollar and the euro, the U.S. Department of Justice said today.

    All four banks have been charged criminally in an investigation that began when Eric Holder was Attorney General, said Loretta Lynch, Holder’s successor.

    UBS AG, a fifth multinational, has been charged criminally with manipulating the London Interbank Offered Rate (LIBOR) and other benchmark interest rates, the Justice Department said. The UBS prosecution came about after the agency ripped up an earlier nonprosecution agreement (NPA) with bank, alleging that UBS had violated the terms of a pact reached in December 2012 to resolve the LIBOR matter.

    Barclays also breached an NPA struck in June 2012 over the LIBOR matter and has agreed to pay an additional $60 million, the Justice Department said.

    The charges, all felonies, include conspiring to fix prices and rig bids. They are filed against Citicorp, Barclays, JPMorgan and RBS.

    A felony charge of wire fraud was filed against UBS, the Justice Department said.

    “In other words,” Lynch said, according to her prepared remarks released by the Justice Department, “UBS promised, in other resolutions, not to commit additional crimes — but it did.”

    As for Citicorp, Barclays, JPMorgan and RBS, Lynch said, “Starting as early as December 2007, currency traders at several multinational banks formed a group dubbed ‘The Cartel.’ It is perhaps fitting that those traders chose that name, as it aptly describes the brazenly illegal behavior they were engaged in on a near-daily basis. For more than five years, traders in ‘The Cartel’ used a private electronic chatroom to manipulate the spot market’s exchange rate between euros and dollars using coded language to conceal their collusion.”

    All five of the banks have agreed to plead guilty to the criminal charges at the “parent level,” the Justice Department said.

    Here, according to the Justice Department, are the market-manipulation timelines and the agreed-to criminal fines:

    • Citicorp, involved from as early as December 2007 until at least January 2013, $925 million.
    • Barclays, involved from as early as December 2007 until July 2011, and then from December 2011 until August 2012, $650 million.
    • JPMorgan, involved from at least as early as July 2010 until January 2013, $550 million.
    • RBS, involved from at least as early as December 2007 until at least April 2010, $395 million.
    • UBS (for NPA breach that occurred after December 2012), $203 million.

    A statement by the Justice Department includes the type of language the agency normally directs at street criminals when it is trying to send a message. In this instance, however, the language is directed at the banks. From the statement (italics added):

    Citicorp, Barclays, JPMorgan, RBS and UBS have each agreed to a three-year period of corporate probation, which, if approved by the court, will be overseen by the court and require regular reporting to authorities as well as cessation of all criminal activity.  All five banks will continue cooperating with the government’s ongoing criminal investigations, and no plea agreement prevents the department from prosecuting culpable individuals for related misconduct.  Citicorp, Barclays, JPMorgan and RBS have agreed to send disclosure notices to all of their customers and counter-parties that may have been affected by the sales and trading practices described in the plea agreements.

    Today, in connection with its FX investigation, the Federal Reserve also announced that it was imposing on the five banks fines of over $1.6 billion; and Barclays settled related claims with the New York State Department of Financial Services (DFS), the Commodity Futures Trading Commission (CFTC) and the United Kingdom’s Financial Conduct Authority (FCA) for an additional combined penalty of approximately $1.3 billion.  In conjunction with previously announced settlements with regulatory agencies in the United States and abroad, including the Office of the Comptroller of the Currency (OCC) and the Swiss Financial Market Supervisory Authority (FINMA), today’s resolutions bring the total fines and penalties paid by these five banks for their conduct in the FX spot market to nearly $9 billion. 

    Holder, Lynch said, “oversaw this investigation from its inception.

    “His relentless work made this resolution possible, and I want to thank him for his commitment to this important effort,” she said.

    Lynch replaced Holder last month.

  • No Immediate Comment From Federal Reserve On Claims Related To Emerging BitClub Network ‘Program’

    cautionflagUPDATED 12:27 A.M. EDT SEPT. 22 U.S.A. The PP Blog today contacted the Board of Governors of the Federal Reserve System, owing to claims concerning the emerging BitClub Network “program” that is being pitched by certain members of the $850 million Zeek Rewards Ponzi- and pyramid scheme.

    Known in shorthand as the Fed, the Federal Reserve is the central bank of the United States.

    Someone is posting on the RealScam.com antiscam forum as “Fedman” and purporting to be “Steve,” a “Vice President” of a federal reserve bank. Fedman purports to have been employed by the Fed “for over 30 years,” to “manage large operations” and to “work with monetary policy.”

    Fedman appears to be defending pitches for BitClub Network by Brian Spatola, a New Jersey-based  alleged “winner” in the massive Zeek scheme that may have affected hundreds of thousands of people. The court-appointed receiver in the Zeek case is suing more than 9,000 alleged Zeek winners in the United States and has said he’ll also sue international winners in the “program.”

    The Fed did not immediately comment on the claims being made by Fedman.

    It is sometimes the case in HYIP schemes that promoters and defenders of “programs” drop the names of individuals and entities that have no ties whatsoever to a “program” as a means of sanitizing scams. The name-dropping associated with BitClub Network has been furious and now appears even to include the name of the U.S. central bank.

    bitclub350smallAfter missing a series of advertised launch dates — including one on Sept. 1, the 75th anniversary of the beginning of World War II and another on Sept. 10, the eve of the 13th anniversary of the 9/11 terrorist attacks — BitClub Network now appears to have launched.

    Promoters claim the scheme pays out between 0.3 and 0.8 percent a day for 1,000 days on invested sums of between $500 and $3,500. In addition, promoters claim there are recruitment commissions on top of the daily payout, a claim that accompanies many HYIP Ponzi- and pyramid swindles.

    Among the BitClub Network promoters are Spatola and T. LeMont Silver, late of Zeek. Silver also promoted the OneX pyramid scheme, an exceptionally murky program that used an image of a bomb in its logo.

    AdSurfDaily figure Kenneth Wayne Leaming, a purported “sovereign citizen,” was a Federal Reserve conspiracy theorist and an overall banking conspiracy theorist. Leaming was arrested by an FBI terrorism task force in 2011, after filing bogus liens against federal officials who had a role in the ASD Ponzi prosecution that began in 2008.

    Leaming now is serving a lengthy prison sentence.

     

     

     

  • How Bizarre Will MLM Get? YouTube Video That Drives Traffic To Empower Network Feeds On Name Of ‘CashCropCycler’ And Trades On Images Of White House, Obama And Biden

    "President Obama" and "Vice President" Biden in a video that appears to be designed to drive sign-ups for Empower Network, an MLM "program."
    “President Obama” and “Vice President Biden” in a video that appears to be designed to drive sign-ups for Empower Network, an MLM “program.”

    EDITOR’S NOTE: Our thanks to reader “Tony” for pointing out the video described below.

    UPDATED 9:26 A.M. EDT (SEPT. 10, U.S.A.): How bizarre will MLM get? Well, there may be no ceiling: A 2:47 video animation playing on YouTube depicts U.S. Vice President Joe Biden as a recent enrollee in the CashCropCycler HYIP “program” who confesses to President Obama that he’s “[j]ust out bumbling around and sticking my foot in my mouth.”

    The video has a publication date of July 17 and appears to be a bid by an affiliate of the Empower Network MLM “program” to target traffic meant for CashCropCycler and refocus it toward Empower Network. “President Obama” appears to speak with a British accent in the promo, which also features a jab against Ben Bernanke, the chairman of the Federal Reserve.

    At approximately the 0:48 mark, after “Biden” informs “Obama” that he’s just joined CashCropCycler, “Obama” seems to say this: “Bernanke started that one, didn’t he?”

    Some MLMers appear to believe that raising conspiracy theories about the Federal Reserve is helpful to MLM HYIP “programs.”

    A URL below the video at the YouTube site goes to a page at JoinVicNow.com that displays a photo of an oversized “Commissions Earned” check from Empower Network for $464,913. The check appears to be dated September 2012. It is made out in the names of “David Wood & David Sharpe” and is presented by an individual wearing a Guy Fawkes mask.

    Source: Sceen shot at JoinVicNow.com
    Source: Sceen shot at JoinVicNow.com

    CashCropCycler, a “program” promoted on the Ponzi boards, appears to have gone missing in recent days. NEOMutual, a purported “crowdfunding” company promoted alongside CashCropCycler on the Ponzi boards, also appears to have gone missing. Both “programs” planted the seed that extraordinary profits would come to enrollees.

    The Guy Fawkes mask sometimes is known as the “V for Vendetta” mask, which sometimes is used by members of “Anonymous,” the so-called hacktivist group associated with DDoS attacks on government and commercial sites.

    Here, in part, is how WikiPedia describes the mask and Guy Fawkes (italics added):

    The Guy Fawkes mask is a stylised depiction of Guy Fawkes, the best-known member of the Gunpowder Plot, an attempt to blow up the House of Lords in London in 1605. The use of a mask on an effigy has long roots as part of Guy Fawkes Night celebrations.

    Why an individual is wearing a Guy Fawkes mask in the photo depicting the Empower Network check is unclear. The company, however, has described itself as “bad ass.” (Also see July 19 report on BehindMLM.com.)

    Trading on the name of the President and Vice President of the United States was one of the things that led to the downfall of the AdSurfDaily MLM “program” in 2008. (The President at the time was George W. Bush; Dick Cheney was the Vice President.)

    After Obama replaced Bush in the White House, an affiliate of an MLM “program” known as MPB Today depicted Obama in a 2010 promo as a left-handed saluting Nazi subordinate to then U.S. Secretary of State Hillary Rodham Clinton, who was depicted as a whining drunk who’d knocked out First Lady Michelle Obama in the Oval Office. In 2012, MPB Today operator Gary Calhoun was charged in Florida with racketeering. A federal forfeiture complaint that targeted the headquarters building used by MPB Today specified the crimes of access-device fraud and fraud in connection with identification documents.

    Calhoun was sentenced to a three-year prison term last month. MPB Today MLM affiliates claimed a one-time purchase of $200 from the firm could result in free groceries and gasoline for life. Claims were made by affiliates that the U.S. government or Walmart or both had backed the MLM “program.”

    In January 2013, an online promotion turned Obama into a pitchman for a Ponzi-board “program” known as UltimatePowerProfits.

    Some members of the TelexFree  “program” now appear to believe there is MLM hay to be made while trading on the name of Democratic politician Anthony Weiner. TelexFree is under investigation in multiple states in Brazil, amid allegations its is conducting a massive pyramid scheme. Even though there have been reports in Brazil about death threats against a judge and a prosecutor, some U.S. affiliates continue to promote the purported “opportunity.”

    One promo for TelexFree claims a payment of $15,125 to the MLM firm will produce a profit of more than $42,000 in a year. The “Aunt Ethels” of the world — older people with money — will become keen on TelexFree, according to the promo.

  • An AdSurfDaily Imponderable: ‘Ad-Packs’ As Currency

    All sorts of incongruities dot the AdSurfDaily landscape. Perhaps none is odder than this:

    Some ASD members say currency issued by the U.S. government is fraudulent, that the Federal Reserve is a fraud, that Federal Reserve Notes are a sham and not “money” because gold and silver coins are the only real money — and yet they seem to have no problem at all with the concept of “ad-packs” as currency.

    Andy Bowdoin was not paying them in silver and gold — and they nevertheless were happy to receive their money, which they incongruously claim elsewhere to be Unconstitutional.

    “Ad-packs” always have made news, but perhaps particularly when prosecutors revealed ASD was paying certain employees in “ad-packs.” There was no hue and cry from the Federal Reserve conspiracy theorists, even though “ad-packs” aren’t backed by silver and gold and have no street value, Constitutional or otherwise.

    They are not redeemable at, say, the neighborhood kid’s sidewalk Kool-Aid stand.

    A kid might take a silver coin or a gold coin — but he or she ain’t gonna take no stinkin’ “ad-packs.” You gotta show a kid the money, not a theory. Any money that spends at the Mall will do.

    Did you know a man who was paying employees in “ad-packs” any kid running a Kool-Aid stand would reject as unacceptably risky got an award from the President of the United States for business acumen? If not, consult the literature of ASD promoters, who helped a lie on the institution of the Presidency go viral because a trusting widow in Florida with $10,000 in her bank account meant they might score a commission of $1,000.

    No one raised a ruckus about Bowdoin treating “ad-packs” as currency — and the Federal Reserve conspiracy theorists presumably did not renounce the paper profits showing in their back offices because Bowdoin had not set aside a like amount in gold and silver to back his “ad-pack” notes.

    If  paper money not backed by gold is a conspiracy, how could electronic “ad-packs” not backed by gold not also be one? Their value might not survive even a strong thunderstorm.

    Call it the Bowdoin Standard.