By: Donald V. Watkins
© Copyrighted and Published on January 26, 2020
The ink had not dried on my special five-part series of articles titled, "God Wears a Robe," when U.S. government law enforcement agencies and bank regulators announced on Thursday that they had settled cases involving a nationwide fraud scheme perpetuated by Wells Fargo and its senior management executives from 2012 to 2016. As part of the fraud scheme, Wells Fargo bank executives created more than 2 million fake bank accounts for existing customers for the sole purpose of bilking them out of unearned banking fees.
The fraud scheme was implemented under the watchful eyes of John Stumpf, Wells Fargo's former CEO, Hope Hardison, the bank's former chief administrative officer, Michael Loughlin, the bank's former chief risk officer, Carrie Tolstedt, the bank's former head of consumer banking, as well as Wells Fargo's former general counsel, chief auditor, and scores of mid-level executives. All of the fraud perpetrators are white.
As expected, none of these bank executives faced criminal charges for conspiracy, wire fraud, mail fraud, or bank fraud.
Thursday's settlement is the most glaring example of the preferential treatment federal prosecutors accord to big Wall Street banks and their top executives. Wells Fargo and its former top executives are "too big to prosecute." Culprits like Wells Fargo, Stumpf, and the other bank officers bought their way out of criminal prosecutions by agreeing to pay large fines. Stumpf was fined $17.5 million. Hardison and Loughlin paid $3.5 million combined. Stumpf also agreed to a lifetime ban from the banking industry.
Bank regulators are seeking $25 million from Ms. Tolstedt and a lifetime ban from banking. She has already forfeited $66 million in bonuses and payments derived from the fraud scheme.
The other Wells Fargo executives involved in the fraud scheme are embroiled in administrative proceedings to resolve their cases.
Selective Prosecution Based Upon Race and Status in the Financial Community
Now, compare the U.S. government's preferential treatment of Wells Fargo and its white senior management executives with the government's mistreatment of Christopher Pitts, an Alabama attorney who completed $200 million in real estate closings for the U.S. Department of Housing and Urban Development. Pitts' case was featured on January 21, 2020 in "God Wears a Robe" - Part 3.
Federal prosecutors charged Chris Pitts with operating a fraud scheme because there was an unexplained $1,090,888.53 shortfall in his HUD-related trust accounts. These prosecutors spent years going after Pitts. They eventually conceded that Pitts did not steal the missing $1,090,888.53. However, federal prosecutors refused to dismiss the fraud case against Pitts.
After federal prosecutors in Montgomery, Alabama indicted Chris Pitts, a forensic audit was conducted by Pitts. The audit results found that the $1,090,888.53 was missing from Pitts' HUD-related trust accounts because mortgage giants Washington Mutual and Countrywide Financial failed to send the money they owed to HUD before these lenders collapsed during the Great Recession of 2008. What is worse, the government did not file a claim for insurance benefits under various policies Pitts had purchased to cover the full amount of the loss for this kind of occurrence.
Even though Wells Fargo operated branches within the Middle District of Alabama during its 2012 to 2016 crime spree involving the fake bank accounts, the federal prosecutors who came after Chris Pitts over $1,090,888.53 were too weak and compromised to pursue criminal charges against Wells Fargo and the bank executives who perpetrated the fraud scheme.
The "in-your-face" disparate treatment between the prosecution of Chris Pitts and the prosecutorial "pass" given to the Wells Fargo fraudsters is sickening. It also constitutes a classic case of selective prosecution based upon race and stature within the financial community.
In the eyes of the federal prosecutors who pounded their chests in three press releases while going after Pitts, the fall from grace and monetary fines were enough punishment for the culprits in the massive Wells Fargo fraud scheme. These prosecutors determined that Chris Pitts needed to go to prison because he committed an accounting error that, at best, amounted to "negligence." Of course, Pitts, who is black, has no standing or significant stature within the Wall Street community of power players.
A Gathering Place for Neo-Nazis, Skinheads, and Clarence Thomas-like "Negroes"
Even though Wells Fargo's multi-year fraud scheme was documented by bank regulators and acknowledged by the bank itself, federal prosecutors decided to give the perpetrators of this scheme a huge break by not prosecuting them on federal fraud charges. Prosecutors have this power. No federal prosecutor is required to apply federal criminal laws in a fair and non-discriminatory manner. They are not even required to follow the American Bar Association's standards of practice for prosecutors, or any standards at all.
The power of the U.S. Attorney's Office to harass black criminal suspects and charge them with a variety of crimes, whether warranted or not, has attracted a host of neo-Nazis and Skinheads to the ranks of federal prosecutors and their support staffs. These modern-day racists are subtle and polished in the expression of their racism. They do not openly use derogatory terms like "nigger", "coon", and "filthy, evil beast" in public settings. Instead, they simply mistreat blacks like their predecessors did during the old COINTELPRO era. Today's federal prosecutors are comforted in the practice of their racism by the sprinkling of Clarence Thomas-like safe "Negroes" who are showcased as their "friends" and colleagues.
Thanks to the 1996 U.S. Supreme Court case of United States v. Armstrong, the discretion of federal prosecutors to forgive the crimes of rich and powerful white criminal defendants while aggressively prosecuting black defendants like Chris Pitts is virtually unreviewable in the court of law.
Chris Pitts remains imprisoned at the Talladega Federal Prison Camp while the white Wells Fargo executives are free to go about their daily lives without worry. They have been forgiven by federal prosecutors.