Treasury Targets Key Al-Qa’ida Funding and Support Network Using Iran as a Critical Transit Point

WASHINGTON – The U.S. Department of the Treasury today announced the designation of six members of an al-Qa’ida network headed by Ezedin Abdel Aziz Khalil, a prominent Iran-based al-Qa’ida facilitator, operating under an agreement between al-Qa’ida and the Iranian government. Today’s action, taken pursuant to Executive Order (E.O.) 13224, demonstrates that Iran is a critical transit point for funding to support al-Qa’ida’s activities in Afghanistan and Pakistan. This network serves as the core pipeline through which al-Qa’ida moves money, facilitators and operatives from across the Middle East to South Asia, including to Atiyah Abd al-Rahman, a key al-Qa’ida leader based in Pakistan, also designated today.

“Iran is the leading state sponsor of terrorism in the world today. By exposing Iran’s secret deal with al-Qa’ida allowing it to funnel funds and operatives through its territory, we are illuminating yet another aspect of Iran’s unmatched support for terrorism,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen. “Today’s action also seeks to disrupt this key network and deny al-Qa’ida’s senior leadership much-needed support.”

As a result of today’s action, U.S. persons are prohibited from engaging in commercial or financial transactions with the designees, and any assets they may hold under U.S. jurisdiction are frozen. Treasury designated the following individuals today:

Ezedin Abdel Aziz Khalil Khalil (a.k.a. Yasin al-Suri) is an Iran-based senior al-Qa’ida facilitator currently living and operating in Iran under an agreement between al-Qa’ida and the Iranian government. Iranian authorities maintain a relationship with Khalil and have permitted him to operate within Iran’s borders since 2005. Khalil moves money and recruits from across the Middle East into Iran, then on to Pakistan for the benefit of al-Qa’ida senior leaders, including Atiyah Abd al-Rahman. Khalil has collected funding from various donors and fundraisers throughout the Gulf and is responsible for moving significant amounts of money via Iran for onward passage to al-Qa’ida’s leadership in Afghanistan and Iraq. He has also facilitated the travel of extremist recruits for al-Qa’ida from the Gulf to Pakistan and Afghanistan via Iran. Khalil requires each operative to deliver $10,000 to al-Qa’ida in Pakistan.

As al-Qa’ida’s representative in Iran, Khalil works with the Iranian government to arrange releases of al-Qa’ida personnel from Iranian prisons. When al-Qa’ida operatives are released, the Iranian government transfers them to Khalil, who then facilitates their travel to Pakistan.

Atiyah Abd al-Rahman

Al-Rahman is al-Qa’ida’s overall commander in Pakistan’s tribal areas and as of late 2010, the leader of al-Qa’ida in North and South Waziristan, Pakistan. Rahman was previously appointed by Usama bin Laden to serve as al-Qa’ida’s emissary in Iran, a position which allowed him to travel in and out of Iran with the permission of Iranian officials.

Umid Muhammadi

Muhammadi is an al-Qa’ida facilitator and key supporter of al-Qa’ida in Iraq (AQI). Muhammadi has petitioned Iranian officials on al-Qa’ida’s behalf to release operatives detained in Iran. Muhammadi has been involved in planning multiple attacks in Iraq and has trained extremists in the use of explosives. He has also received training in Afghanistan on the use of rockets and chemicals.

Salim Hasan Khalifa Rashid al-Kuwari

Al-Kuwari provides financial and logistical support to al-Qa’ida, primarily through al­-Qa’ida facilitators in Iran. Based in Qatar, Kuwari has provided hundreds of thousands of dollars in financial support to al-Qa’ida and has provided funding for al-Qa’ida operations, as well as to secure the release of al-Qa’ida detainees in Iran and elsewhere. He has also facilitated travel for extremist recruits on behalf of senior al-Qa’ida facilitators based in Iran.

Abdallah Ghanim Mafuz Muslim al-Khawar

Al-Khawar has worked with Kuwari to deliver money, messages and other material support to al-Qa’ida elements in Iran. Like Kuwari, Khawar is based in Qatar and has helped to facilitate travel for extremists interested in traveling to Afghanistan for jihad.

‘Ali Hasan ‘Ali al-’Ajmi

Al-’Ajmi is a Kuwait-based associate of Khalil who provides financial and facilitation support to al-Qa’ida, AQI and the Taliban. ‘Ajmi has collected money from individuals in Gulf countries and provided these funds to AQI facilitators as well as to the Taliban. He has also supported al-Qa’ida by facilitating travel for individuals associated with the group so that they could take part in fighting in Afghanistan.

America the Beautiful Quarters Coin Album™ Now Available

WASHINGTON - The United States Mint today announced sales of its America the Beautiful Quarters Coin Album.  The sturdy album, priced at $9.95 each, contains interesting facts and information about each featured national park and site next to a placeholder for each quarter.  Customers may place their orders at http://www.usmint.gov/catalog or at 1-800-USA-MINT (872-6468).  Hearing- and speech-impaired customers with TTY equipment may place their orders by calling 1-888-321-MINT (6468).  A shipping and handling fee of $4.95 will be added to all domestic orders.

The America the Beautiful Quarters Coin Album is the perfect companion storage solution for those collectors who purchase the America the Beautiful Quarters® Circulating Coin Set.  This annual set contains one each of the five circulating America the Beautiful Quarters coins minted at the United States Mint at Philadelphia and one each of the five circulating America the Beautiful Quarters coins minted at the United States Mint at Denver (a total of 10 coins per set).  Collectors may open the packaging easily so the coins may be removed and placed into the America the Beautiful Quarters Coin Album or other collecting and storage products of their choice.

The United States Mint, created by Congress in 1792, is the Nation's sole manufacturer of legal tender coinage and is responsible for producing circulating coinage for the Nation to conduct its trade and commerce.  The United States Mint also produces proof, uncirculated and commemorative coins; Congressional Gold Medals; and silver, gold and platinum bullion coins.

Federal Reserve announces issuance of a joint consent cease and desist order by and among The Royal Bank of Scotland Group

The Federal Reserve Board on Wednesday announced the issuance of a joint consent cease and desist order by and among The Royal Bank of Scotland Group plc, Edinburgh, Scotland (RBS Group), a registered bank holding company, and The Royal Bank of Scotland plc, Edinburgh, Scotland (RBS plc), a foreign bank, and its branches in New York and Connecticut.

The order also applies to The Royal Bank of Scotland N.V. (RBS N.V.), Amsterdam, The Netherlands, a foreign bank, and its branches in New York and Illinois. In addition to the Federal Reserve Board, the order is being issued by the New York State Banking Department, the State of Connecticut Department of Banking, and the State of Illinois Department of Financial and Professional Regulation.

The order requires the RBS Group to improve its oversight of its U.S. operations. It also requires RBS plc and RBS N.V. to improve risk-management practices and compliance with Bank Secrecy Act and anti-money laundering requirements at their U.S. branches.

For media inquiries, call 202-452-2955.

INFOGRAPHIC: Where does our national debt come from?

By Macon Phillips

One of the fundamental things to understand when considering the debate about reducing our national debt is how we accumulated so much in the first place.

To explain the impact various policies have had over the past decade, shifting us from projected surpluses to actual deficits and, as a result, running up the national debt, the White House has developed a graphic for you to review and share:

As you can see, we've also included a quote from President Obama's speech last night that sums up the basic issues:

For the last decade, we’ve spent more money than we take in.  In the year 2000, the government had a budget surplus.  But instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts, while two wars and an expensive prescription drug program were simply added to our nation’s credit card.

As a result, the deficit was on track to top $1 trillion the year I took office.  To make matters worse, the recession meant that there was less money coming in, and it required us to spend even more -– on tax cuts for middle-class families to spur the economy; on unemployment insurance; on aid to states so we could prevent more teachers and firefighters and police officers from being laid off.  These emergency steps also added to the deficit.

Because neither party is blameless for the decisions that led to this problem, both parties have a responsibility to solve it.

And it's worth noting that, among many others, the Pew Charitable Trusts and the New York Times have addressed this issue too.

Impending Social Strife?

By Ron Paul

The greatest threat facing middle and working class Americans is our depreciating paper currency.

At least when the kings of old debased their coinage, by adding copper to the precious metal, there was still some objective value to the resulting money. But as economist David Ricardo observed almost two centuries ago, when money costs nothing, it will become worth nothing.

"Government," said Ludwig von Mises, "is the only agency that can take a useful commodity like paper, slap some ink on it, and make it totally worthless."

Today, thanks to 67 years of central bank control over the money supply, we face an economic and political crisis greater than any we have faced before.

We probably will see widespread civil disorder in the 1980s, as a direct result of our faltering economic system. The dollar has been damaged by decades of interventionism, and Congress has legitimized depreciation of the dollar and forced redistribution of wealth through corporate and social welfare schemes.

All aspects of the interventionist system threaten freedom and social peace, but money is the major issue, since it is the lifeblood of all economic transactions. If we are to reverse the trends of the past six or seven decades, honest money and monetary debasement must become top concerns of ordinary Americans.

The late Martin Gilbert, head economist for a Swiss bank, was a convert to the gold standard. Among his employees was a young manual worker. "Once a month," said Gilbert, "he took part of his pay and bought a gold coin for his wife. I remonstrated with him about it once, and he said, 'Look, don't you Americans come over here and try to tell us how to live. I go home and I give that coin to my wife, and I tell her, "If something happens to me, and to the bank and all the governments, you can go into the countryside and give it to a farmer, and with that coin you can eat for a week."’ I came around to the opinion that he knew something I didn't know."

This article was excerpted from the booklet Gold, Peace, and Prosperity, copyright © 1981 by the Foundation for Rational Economics and Education, Inc. Permission to quote from, or to reproduce liberal portions of, this publication is granted, provided due acknowledgement is made.

Take Control of Your Finances

Whether you need information about credit reports, managing debt, or saving and investing, you'll find some helpful tools on USA.gov.

Information in your credit report is used to evaluate your applications for credit, insurance, employment, and renting a home. Check your credit report at least once a year to correct errors and detect unauthorized activity. Learn how to request your free annual credit report that's yours by law.

If you or someone you know is in financial hot water, there are things you can do to keep the situation from going from bad to worse. Realistic budgeting, credit counseling from a reputable organization, debt consolidation, bankruptcy and debt settlement are options. Learn what you can do to overcome debt.

 

Wonder how much your investments will grow in the future? Calculators are tools that can help you evaluate your current financial situation, and to get you where you want to be in the future. They can tell you if you are in the “ballpark” for retirement, and help you analyze fees associated with mutual funds and 529 Plans.

Brookline Man to Plead Guilty to Foreign Economic Espionage

BOSTON—A Brookline man has agreed to plead guilty to foreign economic espionage for providing trade secrets over an 18-month period to an undercover agent posing as an Israeli intelligence officer. This is the first prosecution in Massachusetts for foreign economic espionage and only the eighth in the nation.

ELLIOT DOXER, 42, a former Akamai Technologies, Inc. employee, was charged in an information and has agreed to plead guilty to foreign economic espionage for providing Akamai trade secrets to an undercover agent posing as an Israeli intelligence officer. The plea hearing is scheduled for August 29 at 3:15 p.m.

United States Attorney Carmen M. Ortiz said, “Economic espionage poses a tremendous risk, not only to corporate America, but to the safety and well being of our nation’s security. I want to thank Akamai Technologies, Inc. for their outstanding cooperation in this matter, which played an important role in assisting law enforcement with bringing Mr. Doxer to justice.”

“The Boston area is a worldwide leader of innovative technology and research. Preventing those intent on stealing trade secrets and American technology from local industry leaders, regardless of their motivation, is a high priority for the FBI,” said Richard DesLauriers, Special Agent in Charge of the FBI in Boston. “Mr. Doxer’s criminal actions are an affront to the dedicated workers in the thriving technology industry. The arrest of Mr. Doxer is a significant achievement by the FBI and the USAO, District of Massachusetts, to thwart Mr. Doxer’s goal of attempting to deprive Akamai Technologies of valuable business technology and confidential business information.”

The parties have stipulated in an agreed statement of facts that on June 22, 2006, DOXER sent an e-mail to the Israeli consulate in Boston stating that he worked in Akamai’s finance department and was willing to provide any information that might help Israel. In later communications, DOXER said that his chief desire “was to help our homeland and our war against our enemies.” He also asked for payment in light of the risks he was taking.

In September 2007, an FBI agent posing as an undercover Israeli intelligence officer spoke to DOXER and established a “dead drop” where the agent and DOXER could exchange written communications. From September 2007 through March 2009, DOXER visited the dead drop at least 62 times to leave information, retrieve communications, or check for new communications.

Included in the trade secret information that DOXER provided the undercover agent were an extensive list of Akamai’s customers; contracts between Akamai and various customers revealing contact, services, pricing, and termination date information; and a comprehensive list of Akamai’s employees that revealed their positions and full contact information. DOXER also broadly described Akamai’s physical and computer security systems and stated that he could travel to the foreign country and could support special and sensitive operations in his local area if needed.

We also acknowledge the government of Israel for their cooperation in this investigation, and underscore that the information does not allege that the government of Israel or anyone acting on its behalf committed any offense under U.S. laws in this case.

DOXER was arrested on October 6, 2010, on a complaint charging him with wire fraud.

That charge will be dismissed as part of the plea agreement. The charge of foreign economic espionage carries a maximum penalty of 15 years in prison, a three-year term of supervised release and a $500,000 fine.

The case is being prosecuted by Assistant U.S. Attorneys William D. Weinreb and Scott Garland respectively in Ortiz’s Antiterrorism and National Security Unit and Cybercrimes Unit, and trial attorneys Kathleen Kedian and David Recker of the Department of Justices’ Counterespionage Section. Akamai Technologies cooperated fully in the investigation.

The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Houston Venture Capitalist Charged with Fraud

HOUSTON—Harvard H. Hill, of Houston, has been charged with three counts of wire fraud in connection with an investment in the general partnership of a Houston-based venture capital fund he promoted, United States Attorney José Angel Moreno announced today.

Hill, 74, surrendered to FBI agents this morning as a result of the return of the three-count indictment on July 21, 2011. He made his initial appearance this morning before U.S. Magistrate Judge Mary Milloy. He is scheduled to appear again today at 1:45 p.m., at which time the issue of bond will be decided.

The indictment alleges that Hill defrauded an investor in the general partnership that managed the James Sunbelt Investment LP Fund that Hill promoted. Hill, who has operated venture capital funds in Houston under the name Houston Partners, solicited an investor to become a special limited partner in the general partnership. Under the supposed structure of the fund, the general partnership would receive 20 percent of the fund’s profit distributions and a 2 percent annual management fee. The special limited partner would receive a percentage of the general partnership’s stake, so the ability to repay the special limited partner depended in significant part on the amount invested in the fund given the annual 2 percent management fee.

The indictment alleges that Hill misrepresented that millions of dollars were already in the fund under the management of the general partnership, provided false information listing the names of companies in which the fund was supposedly invested and falsely claimed that professors at Rice and MD Anderson Cancer Center had agreed to serve on the fund’s Scientific Advisory Board. The indictment further alleges that within a week of the investor wiring $500,000 to Hill in July 2006, Hill had transferred over half the funds to a personal account in his name, a bank account controlled by a member of Hill’s family and an account in the name of another fund in which Hill had past due expenses. According to the indictment, within two months of receipt of the investment, more than 80 percent of the money had been spent and was not used for promoting and managing the fund.

Each wire fraud count carries a potential punishment of up to 20 years in prison and a $250,000 fine.

The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Gregg Costa.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

Swiss International Bank's Former Head of North America Offshore Banking, Others Charged with Conspiracy

Superseding Indictment Alleges Defendants Helped U.S. Taxpayers Hide Assets in Secret Accounts

WASHINGTON – Markus Walder, former head of North America Offshore Banking at an international bank headquartered in Zurich; Susanne D. Rüegg Meier, a former manager with the international bank; Andreas Bachmann, a former banker at a subsidiary of the international bank; and Josef Dörig, the founder of a Swiss trust company, have been charged with conspiring with other Swiss bankers to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced today.   The four are charged in a superseding indictment together with four other defendants (Marco Parenti Adami, Emanuel Agustino, Michele Bergantino and Roger Schaerer) who were charged in an indictment returned on Feb. 23, 2011.

According to the superseding indictment, the international bank’s managers and bankers engaged in illegal cross-border banking that was designed to assist U.S. customers evade their income taxes by opening and maintaining secret bank accounts at the bank and other Swiss banks.   As of the fall of 2008, the international bank maintained thousands of secret accounts for U.S. customers with as much as $3 billion in total assets under management in those accounts.   The conspiracy dates back to 1953 and involved two generations of U.S. tax evaders including U.S. customers who inherited secret accounts at the international bank.

Moreover, according to the superseding indictment, the conspirators utilized a representative office in New York City to provide unlicensed and unregistered banking services to U.S. customers with undeclared accounts.   Walder, Schaerer, their co-conspirators and others allegedly made false statements and provided misleading information to the Federal Reserve Bank of New York and to the IRS in order to conceal the international bank’s U.S. cross-border banking business and the role of the New York representative office in that business.

The superseding indictment alleges that Walder supervised the U.S. cross-border banking business, including the New York representative office headed by Schaerer, a Geneva-based team of bankers led by manager Marco Parenti Adami and a Zurich-based team of bankers led by manager Rüegg Meier.   Rüegg Meier was a member of senior management at the international bank and also served as a private banker, providing unlicensed and unregistered banking services to U.S. customers with undeclared accounts at the bank.   The superseding indictment further alleges that Bachmann was a private banker for a wholly-owned subsidiary of the international bank who traveled to the United States to assist U.S. taxpayers in evading their U.S. taxes through the use of secret bank accounts.   It is further alleged that Dörig, founder of a Swiss trust company, was a preferred provider of the international bank who assisted U.S. customers in forming and maintaining nominee tax haven entities and opening secret accounts at the international bank and its subsidiaries in the names of the entities.

According to the superseding indictment, the defendants and their co-conspirators solicited U.S. customers to open secret accounts because Swiss bank secrecy would permit them to conceal from the IRS their ownership of accounts at the international bank and other Swiss banks.   It is further alleged that they provided unlicensed and unregistered banking services and investment advice to customers in the United States in person while on travel to the United States, including at the international bank’s representative office in New York City and by mailings, email and telephone calls to and from the United States.   It is further alleged that the international bank’s employees destroyed statements and other account records that were sent via email or facsimile to the representative office in New York so that records regarding the undeclared accounts would not be maintained in the United States.

The superseding indictment alleges that the defendants and their co-conspirators caused U.S. customers to travel outside the United States to conduct banking related to their secret accounts; opened secret accounts in the names of nominee tax haven entities for U.S. customers; accepted IRS forms that falsely stated under penalties of perjury that the owners of the secret accounts were not subject to U.S. taxation; advised and caused United States customers to structure withdrawals from their secret accounts in amounts less than $10,000 in an attempt to conceal the secret accounts and the transactions from American authorities; mailed bank checks in amounts less than $10,000 to customers in the United States; and advised U.S. customers to utilize offshore charge, credit and debit cards linked to their secret accounts and provided the customers with such cards, including cards issued by American Express, Visa and Maestro.

According to the superseding indictment, after the bank decided to close the secret accounts maintained by U.S. customers, the defendants encouraged and assisted U.S. customers to transfer their secret accounts to other foreign banks as a means of continuing to hide their assets from the IRS and discouraged the customers from disclosing their secret accounts to the IRS through the IRS’s Voluntary Disclosure Program.

Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division; and Douglas H. Shulman, Commissioner of the IRS, made the announcement.

A criminal indictment is only an accusation and a defendant is presumed innocent until proven guilty. If convicted, the defendants each face a maximum of five years in prison and a maximum fine of $250,000.

U.S. Attorney MacBride and Principal Deputy Assistant Attorney General DiCicco commended the investigative efforts of the IRS agents involved in this case, as well as Senior Litigation Counsels Kevin M. Downing and John E. Sullivan and Trial Attorneys Mark F. Daly, Tino M. Lisella, Michelle M. Petersen and Melissa Siskind of the Tax Division, and Assistant U.S. Attorney Mark Lytle, who are prosecuting the case.

Barry Minkow Sentenced to Five Years’ Imprisonment for Stock Manipulation Conspiracy

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced that defendant Barry Minkow, 44, of San Diego, California, was sentenced today on one count of conspiracy to commit securities fraud, in violation of Title 18, United States Code, Section 371, for his participation in a scheme to manipulate the stock price of Lennar Corporation (Lennar) through false and misleading statements about Lennar’s business operations and management. At today’s hearing, U.S. District Court Judge Patricia A. Seitz sentenced Minkow to five years in prison, to be followed by three years of supervised release. In addition, the court ordered Minkow to pay $583,573,600 in restitution.

According to documents filed with the court, Minkow operated Fraud Discovery Institute, a for-profit fraud investigation firm based in California. In this way, Minkow developed ties with federal law enforcement agencies as a purported fraud-finder. During his plea hearing, Minkow admitted making false and misleading statements alleging widespread improprieties in Lennar’s financial reporting and business structure, and attacking the personal character of Lennar’s management.

According to court documents, Minkow was hired to put economic pressure on Lennar to pay money demanded by a business partner in a prior land deal. To this end, beginning in January 2009, Minkow used the Internet, press releases, e-mail communications, Youtube.com videos, and the U.S. mail to broadcast false and misleading statements about Lennar, with the intent of artificially depressing Lennar’s stock price. Minkow then used his relationship with federal law enforcement agencies to report false allegations of criminal conduct purportedly committed by Lennar and its management. Once Minkow confirmed that his allegations had successfully induced law enforcement to open a criminal investigation, Minkow used that knowledge and information to trade Lennar securities for his own benefit.

Mr. Ferrer commended the investigative efforts of the FBI and the cooperative efforts of the Miami Regional Office and the Washington, D.C. Office of the Securities and Exchange Commission. This case is being handled by Assistant United States Attorney Cristina Perez Soto.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on pacer.flsd.uscourts.gov.

No, Your Money Isn't Safe

By Zach Foster
Best read with companion article No, We're Still Not Protected

The companion article stated:

"The truth is that, while there are a few more restrictions on what the clowns on Wall Street can do, Americans are not better off than they were a year ago before the magical everything-proof shield was signed into law.  Banking is still highly unstable in the country, and the banks still exist as entities only because they were artificially revived in the form of massive bailouts.  All across the political spectrum, Americans are angry that the massive bailouts ever happened, and they haven’t forgotten that this bailout, spearheaded by Treasury Secretary Tim Geithner (who was present at the appointment ceremony for the head of the CFPB), happened under President Obama’s watch and he failed to take action against it."

Banking will never be stable in America until the Federal Reserve, whose hands are in every cookie jar, from Chase and Wells Fargo to your community bank, is fully audited and eventually dissolved, and the farce of fractional reserve banking is done away with.

Fractional reserve banking is one of the key factors causing the Great Depression.  Many people don’t know this, but the amount of money printed on their bank account statement is NOT the amount of money that exists in their community bank vault.  The standard reserve requirement for larger banks set by the Federal Reserve is ten percent,[1] meaning out of every hundred dollars a person saves in the bank, only ten of those dollars actually have to exist in a vault.  This system is a bridge of thin ice, since theoretically only ten percent of a bank’s customers need to take out all of their money in order for the bank to run out of money and close down (the true meaning of bankruptcy).

Economist Murray Rothbard makes a compelling case that fractional reserve banking goes hand-in-hand with inflation,[2] since the only way to account for the ninety percent of a bank’s money that doesn’t exist is to hastily print paper money, and printing more money further devalues the American dollar (this is exactly why America needs to return to the gold standard[3]).

The image used is artwork by the author.  It was compiled from various images from Wikimedia Commons as well as text added by the author.

---

[1] http://www.federalreserve.gov/monetarypolicy/reservereq.htm

[2] Rothbard, Murray. “Take Money Back.”

[3] Paul, Ron. Gold, Peace, and Prosperity.  The Foundation for Rational Economics and Education. Pp. 31-32, 39

VIDEO: What Wall Street Reform Means To You

By Katelyn Sabochik

One year ago today, President Obama signed the Wall Street Reform bill into law.

This groundbreaking law does three important things. First, it brings to an end taxpayer funded bailouts -- so taxpayers will never again be left paying the bill if a big bank fails. Second, it stops the reckless risk-taking by Wall Street that put consumers in jeopardy and led to the economic crisis. And third, this law puts in place the strongest consumer protections in history.

Here’s a quick video we put together last year to explain it.

Consumer Financial Protection Bureau Ready to Help Consumers on Day One

Consumer Agency Hits the Ground Running

WASHINGTON – The Consumer Financial Protection Bureau (CFPB) hit the ground running this week, launching functions and issuing a variety of required rules and reports that represent important steps in making the CFPB operational and effective from the start.

“Two years ago, the consumer agency was just barely an idea. A year ago it became law. And this week, the CFPB will open its doors and begin to make a difference in the marketplace,” said Elizabeth Warren, Special Advisor to the Secretary of the Treasury on the CFPB. “This agency is ready to be a cop on the beat for American families – and I couldn’t be prouder.” 

Today, the CFPB is sending introductory letters to the CEOs of the depository institutions – generally large banks and their bank affiliates – that are subject to CFPB supervision. These letters, which outline the agency’s approach to supervision and examination, mark the beginning of the CFPB’s regular communications with the institutions it supervises. In addition, the CFPB’s Enforcement team is ready to begin enforcing federal consumer financial laws, when necessary.  The CFPB’s Consumer Response Center began accepting credit card complaints today on its newly redesigned website, ConsumerFinance.gov, and through a toll-free number. It will also refer distressed homeowners to housing counselors via the Homeowner’s HOPE Hotline. Over the coming months, the agency will expand its Consumer Response Center to handle complaints about other consumer financial products and services under its jurisdiction.

To enable the CFPB to perform its functions under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the agency will publish the following:

•A final list of the regulations of the transferor agencies that will be enforceable by the CFPB, as required by Section 1063(i) of the Dodd-Frank Act.

•A series of interim rules to create records and information procedures. These include rules to implement the Privacy Act and the Freedom of Information Act, and to establish a process by which parties may seek testimony or records from the CFPB for use in litigation. Also included are confidentiality rules, required by the Dodd-Frank Act, describing how the CFPB will treat information it obtains.

•An interim rule, implementing Section 1052 of the Dodd-Frank Act, concerning the CFPB’s conduct of investigations of potential violations of any provision of federal consumer financial law. The rule includes procedures for issuing civil investigative demands for information and responding to such demands. This rule is based on similar rules issued by the prudential regulators, the Federal Trade Commission, and the Securities and Exchange Commission. The Bureau also intends to establish and make public procedures that will typically allow companies and individuals against whom it intends to bring charges to comment on those proposed charges before they are filed.

•An interim rule providing for a fair and expeditious process for the resolution of administrative enforcement actions, as required by Section 1053(e) of the Dodd-Frank Act. The rule sets forth procedures for the CFPB to conduct administrative enforcement proceedings. These procedures govern the filing of administrative charges, pre-hearing procedures, the conduct of hearings, the entry and appeal of recommended decisions, and final decisions and orders of the CFPB. This rule is based on similar rules of practice issued by the prudential regulators, the Federal Trade Commission, and the Securities and Exchange Commission.

•An interim rule specifying procedures for state officials – such as attorneys general – to notify the CFPB of actions or proceedings they undertake to enforce Title X of the Dodd-Frank Act, as required by Section 1042(c) of the Act. This rule will help to ensure that the CFPB is aware of actions being initiated under Title X and that the law is being enforced in a consistent and efficient manner.

In addition, the following reports were required by Congress and issued by the CFPB this week:

•A report examining the differences between credit scores sold to consumers and scores used by lenders to make credit decisions. The report covers the process of developing credit scoring models, why different scoring models may produce different scores for the same consumer, how different scoring models are used by creditors in the marketplace, what credit scores are available to consumers for purchase, and ways that differences between the scores provided to creditors and those provided to consumers may disadvantage consumers. The report is required by Section 1078(b) of the Dodd-Frank Act.

•A report that recommends principles for maximizing transparency and disclosure of exchange rate information for consumers making remittance transfers, and examines the incentives and challenges related to using remittance data in credit scores. The report is required by Section 1073(e) of the Dodd-Frank Act.

•A report on three plans pertaining to the CFPB staff: (1) a training and workforce development plan, including an identification of skill and technical expertise needs, a description of the steps taken to foster innovation and creativity, and a leadership development and succession plan; (2) a workplace flexibilities plan covering items such as telework, flexible work schedules, and parental leave benefits; and (3) a recruitment and retention plan that includes provisions on targeting highly qualified applicant pools with diverse backgrounds, streamlined employment application processes, and the collection of information to measure indicators of hiring effectiveness. The report is required by Section 1067(b) of the Dodd-Frank Act.

The rules and notices will be published in the Federal Register, and all of the documents – including the CFPB reports – will be available online at consumerfinance.gov.

Federal Reserve issues enforcement action on West Pointe Bancshares, Inc.

The Federal Reserve Board on Thursday announced the execution of the following enforcement action:

West Pointe Bancshares, Inc. Oshkosh, Wisconsin

Written Agreement dated July 15, 2011:

(a) WPBI shall not declare or pay any dividends without the prior written approval of the Reserve Bank and the Director of the Division of Banking Supervision and Regulation of the Board of Governors (the “Director”).

(b) WPBI shall not directly or indirectly take dividends or any other form of payment representing a reduction in capital from the Bank without the prior written approval of the Reserve Bank.

(c) WPBI and its nonbank subsidiary shall not make any distributions of interest, principal, or other sums on subordinated debentures or trust preferred securities without the prior written approval of the Reserve Bank and the Director.

(d) All requests for prior approval shall be received by the Reserve Bank at least 30 days prior to the proposed dividend declaration date, proposed distribution on subordinated debentures, and required notice of deferral on trust preferred securities. All requests shall contain, at a minimum, current and projected information on WPBI’s capital, earnings, and cash flow; the Bank’s capital, asset quality, earnings, and allowance for loan and lease losses; and identification of the sources of funds for the proposed payment or distribution.  For requests to declare or pay dividends, WPBI must also demonstrate that the requested declaration or payment of dividends is consistent with the Board of Governors’ Policy Statement on the Payment of Cash Dividends by State Member Banks and Bank Holding Companies, dated November 14, 1985 (Federal Reserve Regulatory Service, 4-877 at page 4-323).

The Federal Reserve Board also announced the termination of the enforcement action listed below: 

Alterra Bank (formerly known as 1st Financial Bank), Overland Park, Kansas

Written Agreement dated June 16, 2009

Terminated June 29, 2011

Search of Federal Reserve enforcement actions.

For media inquiries, call 202-452-2955.

Treasury Exits Investment in Chrysler Group LLC

WASHINGTON - Today, the U.S. Department of the Treasury announced that it received $560 million in proceeds from the sale of its remaining stake in Chrysler Group LLC to Fiat.  With the closing of this transaction, Treasury has fully exited its investment in Chrysler Group under the Troubled Asset Relief Program (TARP).

Fiat paid $500 million to Treasury for its 98,461 shares or 6 percent fully diluted equity interest in Chrysler Group.  Fiat also paid $60 million to Treasury for its rights under an agreement with the UAW retirement trust pertaining to the trust's shares in Chrysler Group.

“With today's closing, the US government has exited its investment in Chrysler at least six years earlier than expected,” said Assistant Secretary for Financial Stability Tim Massad.  “This is a major accomplishment and further evidence of the success of the Administration’s actions to assist the US auto industry, which helped save a million jobs during the worst economic crisis since the Great Depression.”

Fiat held a call option to purchase Treasury’s equity interest in Chrysler Group.  This option was exercisable for the twelve months following the repayment of the Treasury loan provided to Chrysler Group.  On May 24, 2011, Chrysler Group repaid $5.1 billion in TARP loans and terminated its ability to draw a remaining $2.1 billion TARP loan commitment.  On May 27, 2011, Fiat notified Treasury of Fiat’s irrevocable commitment to exercise its option to purchase Treasury’s 6 percent fully diluted equity interest in Chrysler Group.  Pursuant to the Call Option Agreement, the price for the 6 percent fully diluted equity interest in Chrysler Group was determined based on negotiation between Fiat and Treasury.

Treasury committed a total of $12.5 billion to Old Chrysler and Chrysler Group under TARP’s Automotive Industry Financing Program (AIFP).  With the closing of today’s transaction and Chrysler Group’s repayment in full of its TARP loans in May, more than $11.2 billion of that amount has been returned to taxpayers through principal repayments, interest, and cancelled commitments.  Treasury is unlikely to fully recover the difference of $1.3 billion owed by Old Chrysler.  Treasury has the right to recover proceeds from the disposition of the liquidation trust associated with the bankruptcy of Old Chrysler but does not expect a material recovery from those assets.

Lazard served as Treasury's exclusive financial advisor on today’s transaction.​

Obama Throws Good Money After Bad

Taxpayer-funded PR for Unsustainable CLASS Act

“We very much share the concerns that have been expressed that, as written into the law, the framework of the program was not sustainable.”

—Secretary Sebelius, 2/16/11

At a time when the federal government is running trillion-dollar deficits, the Obama Administration has proposed spending yet more taxpayer dollars to launch a PR campaign aimed at promoting the CLASS Act—a new Obamacare entitlement that even HHS Secretary Kathleen Sebelius admits is at risk of becoming “immediately insolvent.”

·         Non-partisan experts and actuaries have consistently warned that the program could become unsustainable without a massive taxpayer bailout.

·         The independent Medicare actuary concluded that there is a “very serious risk” of the CLASS Act becoming unsustainable, and the President’s own Fiscal Commission recommended that the “financially unsound” program be significantly reformed or repealed entirely.

·         Senate Budget Committee Chairman Kent Conrad famously called the program “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would have been proud of.”

·         Senators Shelby and Thune wrote last week to Secretary Sebelius to express concern that the Administration plans to “use federal resources on television ads in an effort to mislead Americans that the CLASS Act is fiscally sound.”

The Administration has provided no details about how it believes it can turn a totally unsustainable entitlement into a solvent program, yet it already has plans to spend more taxpayer funds for a PR campaign to promote the program. It’s just another sign that Obamacare will prove to be a budget-buster for the federal government.

VIDEO: Don't Raise the Debt Ceiling!

Congressman Ron Paul speaks on the House floor for 5 minutes warning about the dire consequences of further destroying our currency by raising the debt ceiling

Commodities Trader Convicted of Threatening to Kill Government Officials

Earlier today, Vincent McCrudden, a former commodities trader, pleaded guilty to two counts of transmitting threats to kill more than 40 current and former officials of the U.S. Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), the National Futures Association (“NFA”), and the U.S. Commodities Futures Trading Commission (“CFTC”). McCrudden has been in custody since his arrest on January 14, 2011.

The guilty pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Lanny A. Breuer, Assistant Attorney General of the Criminal Division of the Department of Justice; Janice K. Fedarcyk, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office; and Christopher Pappas, Acting Regional Director, Federal Protective Service (“FPS”).

The defendant admitted that he sent an e-mail threatening to kill the vice president and chief operating officer of the NFA. Specifically, on September 30, 2010, the defendant sent an e-mail with a subject line of “You’re a Dead Man,” in which the defendant told the vice president and chief operating officer of the NFA that he had hired trained assassins to kill him and that his “body [would] never be found” because it would be in “little bits and pieces.”

The defendant also admitted that he posted threats to kill more than 40 government and regulatory officials on a website that he operated. On one of those website pages, the defendant invited others to “[g]o buy a gun” and take back the country and stated that he would be the first one to lead by example. On another page on his website, the defendant included an “Execution List” with the names of more than 40 current and former officials of the SEC, FINRA, NFA, and CFTC. That list included the chairperson of the SEC, the chairman of the CFTC, a former acting chairman and commissioner of the CFTC, the chairman and CEO of FINRA, the former chief of enforcement at FINRA and other employees of the NFA and CFTC. The defendant wrote that “[t]hese people have got to go. And I need your help, there are just too many for me alone.” Finally, the defendant posted a $100,000 reward on his website for personal information of those individuals and proof that they were punished. McCrudden started broadcasting these threats over the Internet shortly after the CFTC filed a civil enforcement lawsuit against him in U.S. District Court in Central Islip in early December, 2010. McCrudden has been the subject of various enforcement or disciplinary proceedings at the NFA, FINRA and the CFTC for several years.

“This defendant crossed the line when he directly threatened to kill public officials who were working to keep our financial markets fair and open, and invited others to join him. He thought he could hide in the shadows of the Internet and disseminate his threats and instructions. He was wrong. This office will not tolerate, and will vigorously prosecute, those who threaten to kill men and women who dedicate their lives to public service,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the United States Attorney’s Office, Northern District of Illinois, for its cooperation and assistance in the investigation.

“Mr. McCrudden made bone-chilling and graphic threats against dozens of public officials,” said Assistant Attorney General Breuer. “As this prosecution reflects, the Department of Justice will act swiftly to identify and prosecute anyone who attempts to retaliate against public officials. Public servants must be able to carry out their duties without fear of being targeted.”

FBI Assistant Director in Charge Fedarcyk stated, “The conduct of McCrudden was way beyond mere speech. By his admission, he not only directly threatened to kill government and regulatory officials, but he also listed dozens of officials and offered a reward to others to kill them. This outrageous conduct is not only dangerous, but an affront to civil society.”

When sentenced by United States District Judge Denis R. Hurley, the defendant faces a maximum term of imprisonment of 10 years.

The government’s case was prosecuted by Eastern District of New York Assistant United States Attorneys James McMahon and Christopher Caffarone, with the assistance of the Computer Crime and Intellectual Property Section in the Department of Justice’s Criminal Division. The Office of International Affairs in the Department of Justice’s Criminal Division also provided assistance in this case.

The Defendant:

VINCENT MCCRUDDEN

Age: 50

17 Community Banks Across the Country Receive $214 Million to Help Small Businesses Access Capital, Create New Jobs

WASHINGTON – Today, the U.S. Department of the Treasury announced that 17 community banks across the country received a total of $214 million as part of the next wave of funding provided through the Small Business Lending Fund (SBLF). The SBLF, which was established as part of the Small Business Jobs Act that President Obama signed into law, encourages community banks to increase their lending to small businesses, helping those companies expand their operations and create new jobs.          

Including today’s announcement, 23 community banks have now received a total of $337 million in SBLF funding. Additional SBLF funding announcements will be made on a rolling basis in the weeks ahead.

“This funding will help break down barriers to credit for small businesses so they can invest, expand, and create new jobs,” said Treasurer of the United State Rosie Rios. “Continuing to unlock access to capital for Main Street entrepreneurs is vital to strengthening economic growth and job creation in local communities across our country.”

Small businesses play a critical role in the U.S. economy and are central to growth and job creation. Small businesses employ roughly one-half of all Americans and account for about 60 percent of gross job creation. But small business owners faced disproportionate challenges in the aftermath of the recession and credit crisis, including difficulty accessing capital.

The SBLF helps small businesses meet this challenge by providing capital to community banks that hold under $10 billion in assets. The dividend rate a community bank pays on SBLF funding is reduced as that bank increases its lending to small businesses – providing a strong incentive for new lending to small businesses so they can expand and create jobs. For more details on the SBLF program, please visit, link and link.

The SBLF is one part of the Obama Administration’s comprehensive agenda to help small businesses access the capital they need to invest and hire. The State Small Business Credit Initiative (SSBCI), which is also a key part of the Small Business Jobs Act, allocates $1.5 billion to new and existing state programs that will leverage private financing to spur $15 billion in new lending to small businesses and small manufacturers.  A total of 54 states and territories applied to take part in the SSBCI and 16 states have already had their applications approved for $570 million in SSBCI funding. 

The Obama Administration has also supported 17 direct tax breaks that provide tax relief of more than $50 billion for small businesses. These tax breaks were designed to support job creation and retention, entrepreneurship, investment, and growth. The Administration has also worked with Congress to extend and expand existing Small Business Administration loan programs that helped put more than $42 billion in the hands of small businesses and deliver other important benefits to help small businesses expand and hire. 

The 17 banks that received SBLF funding as part of today’s announcement include:

•Florida Traditions Bank (Dade City, Florida) – $8.8 million

•Verus Acquisition Group, Inc (Fort Collins, Colorado) – $9.7 million

•Founders Bancorp, (San Luis Obispo, California) – $4.2 million

•SouthCity Bank, (Vestavia Hills, Alabama) – $5.2 million

•Cache Valley Banking Company (Logan, Utah) – $11.7 million

•Security Business Bancorp (San Diego, California) – $8.9 million

•BOH Holdings, Inc. (Houston, Texas) – $23.9 million

•BancIndependent, Incorporated (Sheffield, Alabama) – $30.0 million

•First California Financial Group, Inc. (Westlake Village, California) – $25.0 million

•Centric Financial Corporation (Harrisburg, Pennsylvania) – $7.5 million

•Eagle Bancorp, Inc. (Bethesda, Maryland) – $56.6 million

•York Traditions Bank (York, Pennsylvania) – $5.1 million

•Insight Bank (Columbus, Ohio) – $4.3 million

•Freedom Bancshares, Inc. (Overland Park, Kansas) – $4.0 million

•Phoenix Bancorp, Inc. (Minersville, Pennsylvania) – $3.5 million

•Huron Valley State Bank (Milford, Michigan) – $2.6 million

•Monument Bank (Doylestown, Pennsylvania) – $3.0 million​