Jew World Order

In a story that should be getting lots of attention, American Banker has released an excellent and disturbing exposé
of J.P. Morgan Chase’s credit card services division, relying on
multiple current and former Chase employees. One of them, Linda Almonte,
is a whistleblower whom I’ve known since last September; I’m working on
a recount of her story for my next book. ~ Matt Taibbi

One
of the things we were promised by the lawmakers who passed the
Dodd-Frank reform bill a few years back is that this would be a new era
for whistleblowers who come forward to tell the world about problems in
our financial infrastructure. This story now looms as a test case for
that proposition.

American Banker reporter Jeff Horwitz did an
outstanding job in this story detailing the sweeping irregularities
in-house at Chase, but his very thoroughness means the news may have
ramifications for Linda, which is why I’m urging people to pay attention
to this story in the upcoming weeks.

The
Cliff’s Notes version of the story goes something like this: Late in
2009, Chase’s credit card services division sold a parcel of nearly $200
million worth of credit card judgments to a debt collector at a
discount.

This common practice in the credit-card industry is a little
like a bookie selling the outstanding debts of his delinquent gamblers
to a leg-breaker for 25 cents on the dollar.

If the leg-breaker gets
half the delinquents to pay, the deal works out for both sides — the
bookie gets 25 percent of money he wasn’t going to collect, and the
leg-breaker makes a 100 percent profit.

In the
case of credit cards, of course, you’re selling the debts to collection
agents, not leg-breakers, but aside from that unpleasantly minor
distinction the process is the same.

The most valuable kinds of sales in
this world are sales of credit card judgments, in other words accounts
in which the debtor has already been successfully brought to court.
That, ostensibly, is what this bloc of accounts Chase sold in 2009
involved.

Almonte
came to Chase in the summer of 2009 as a mid-level executive in the
credit card services division’s offices in San Antonio, and was quickly
put in charge of preparing the documentation for this enormous sale of
credit card judgments.

When Chase regional offices from places like
southern California and Illinois began sending in the papers for these
“judgments,” Almonte very soon found out that something was seriously
wrong. From Horwitz’s piece:

Nearly half of the files [Linda’s] team sampled were missing proofs of judgment or other essential information, she wrote to colleagues.
Even more worrisome, she alleged in her wrongful-termination suit,
nearly a quarter of the files misstated how much the borrower owed.

In the “vast majority” of those instances, the actual debt was “lower that what Chase was representing,” her suit stated.

Linda
subsequently found an enormous range of errors. Some judgments, she told
me, were not judgments at all. In some cases, she said, Chase actually
owed the customer money.

When she
brought these concerns to her superiors, what do you think their
response was? They told her and others to shut up and just sell the
stuff anyway. Her boss, Jason Lazinbat, allegedly told her “she had
better go along with the plan to sell the misrepresented asset.”

Think of
the consequences of this: because Chase was so anxious to make money
off this debt sale, countless credit card borrowers would now have
collection agents chasing them for money they did not owe.

The
debt-buyer, too, was victimized by being sold accounts it could not
collect on. It is almost impossible to estimate how many man-hours of
pointless court proceedings would be lost because of this decision.

Anyway,
when Linda refused to go along with the sale, she was fired. This was in
November of 2009.

She then went through a post-firing odyssey that is
an epic tale in itself: her many attempts to get any of the major bank
regulators interested in this case were disturbingly fruitless for a
long time (although the Office of the Comptroller of the Currency is
apparently looking into it now), and she struggled to find work in the
industry.

She has
been repeatedly harassed and has gone through all sorts of personal
hardship as a result of this incident. She filed a whistleblower claim
with the SEC as part of the new whistleblower program created by
Dodd-Frank, but so far there’s been no progress there.

When I
met Linda last year, my first reaction to her story was that I was
skeptical. The tale she told went far beyond the bank knowingly selling
millions of dollars worth of errors into the financial system. She also
recounted, firsthand, the bank’s elaborate robosigning operation, which
Horvitz, talking to other Chase employees, also discussed:

“We did
not verify a single one” of the affidavits attesting to the amounts
Chase was seeking to collect, says Howard Hardin, who oversaw a team
handling tens of thousands of Chase debt files in San Antonio. “We were
told [by superiors] ‘We’re in a hurry. Go ahead and sign them.'”

And
there were other stories…suffice to say that the picture Linda painted
of life inside Chase reminded me a little of Upton Sinclair’s The Jungle:
they were putting just about everything into those sausages.

When I was
writing it all up for my book I went through a period where I was
waking up nights, seized with the urge to close every credit account I
had – her story makes you think that most credit card companies are
essentially indistinguishable from giant identity theft operations.

Again,
though, when I first heard the story, I was skeptical – until I found
other people in the company who verified Almonte’s account, all the way
down the line.

Horvitz, too, found numerous employees in Chase’s credit
card services division who confirmed the story of the company knowingly
selling a mountain of errors into the market, and manufacturing
robo-signed documents to the tune of thousands per week.

The
financial crash wouldn’t have happened if even a slim plurality of
financial executives had done what Linda Almonte did, i.e. simply refuse
to sign off on a bogus transaction.

If companies had merely upheld
their own stated policies and stayed within the ballpark of the law,
none of these messes could have accumulated: fraudulent mortgages
wouldn’t have been sold, families wouldn’t have been foreclosed upon
based on robo-signed documentation, investors wouldn’t have been duped
into buying huge packets of “misrepresented assets.”

Most
executives didn’t refuse to go along, precisely because powerful
companies make it so hard on people who come forward. Almonte, after
being fired, entered into a modest settlement with Chase that prohibited
her from coming forward publicly.

At the time she entered into the
settlement she was in an extremely desperate state, and she made a bad
decision, taking a very bad deal.

Still, like Jeffery Wygand, the tobacco scientist from the movie The Insider,
she was sitting on top of a story that, morally speaking, should not
ever be protected by a confidentiality agreement.

The subsequent
lack of regulatory action eventually moved her to speak out to people
like Horvitz and me. Of course, now that her story is out there in
public, the concern is that the bank will move swiftly to take her to
court.

This
person does not have any money, so an action by Chase at this point
would be purely punitive, to send a message to future whistleblowers.
They’ll be more likely to do it if they think no one is paying
attention. I’ll keep you posted on that score.

In the meantime, please check out Horvitz’s piece. It should give everyone who has a credit card pause.

Matt Taibbi – March 16, 2012 – posted at InformationClearingHouse

Source – Rolling Stone

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