I first came across the story of chemist Dean Moore and HSBC via this very tantalizing headline from Michael Krieger: “How the U.S. Government and HSBC Have Teamed Up to Hide the Truth From a Pennsylvania Couple”. After reading through Krieger’s story as well as a few other sources, it turns out that this situation between Moore and HSBC is of interest to those of us affected by and fighting foreclosure fraud and banks generally.
The foreclosure fraud connection is this—Moore’s wife got breast cancer several years ago and the Moores got behind on their death-pledge (what we’ve been trained to call a “mortgage”) with HSBC. Of course HSBC gave Moore the runaround about helping him. In fact, they gave him every version of their runaround, all on the same day, as Moore explains here:
“This is what really spurred this entire issue,” Moore told The Post in his first-ever interview about the case.
“This one particular day I got four individual, separate letters from the mailbox, all dated the same day. One was, ‘we’ve received everything,’ ” he said of his loan modification paperwork. “The second one was, ‘we received it but you’re missing parts two and three.’ The next letter says ‘you’re missing parts six and seven.’ And the final letter said, ‘sorry, time’s out.’ On the same day!”
This type of communication with a bank is so unfortunately familiar to so many anti-foreclosure fraud activists, but even many of them would have to admit that this is a doozy. And Moore was of course right to realize that these four separate letters from HSBC were a dead giveaway that something fishy, nay illegal, had to be going on.
HSBC is no stranger to illegal activity and, as you may recall, was fined $1.9 billion in a settlement with the Department of Justice over charges that HSBC was involved in money-laundering for drug cartels and violating sanctions against so-called “terrorist” regimes in Iran and other countries. This settlement—really a “deferred prosecution agreement” (DPA)—was approved in July 2013 by District Judge John Gleeson. Now what does this have to do with Dean Moore and the modification of his death-pledge, you might ask?
Well, as part of the settlement/DPA, a monitor was appointed to make sure that HSBC complied with the terms of the DPA. That monitor is/was one Michael Cherkasky, and he prepared a report on HSBC’s compliance with the DPA and filed it with the DOJ in 2015. The existence of the report was publicly reported at the time, which is likely how Moore knew about it. Here’s an excerpt from a Bloomberg story about the filing of the report:
Cherkasky’s document speaks to the need for continued monitoring: At the current rate, he wrote, HSBC would have a hard time meeting its compliance targets within five years.
“Nearly two years after the entry of the DPA, the bank continues to struggle with a broad range of compliance and control deficiencies that pose an unnecessary level of financial-crime risk to the bank’s continuing operations,” Cherkasky wrote in the report.
I don’t know about you, but if I’m fighting HSBC (or any bank) over what is almost certain to be illegal actions of theirs against me and hear of a public report about their DPA which states that the bank is having problems with “a broad range of compliance and control deficiencies,” I’m going to be very interested in seeing that report. And of course, HSBC is going to be very interested in me and everyone else not seeing that report. And HSBC’s ally in keeping and/or attempting to keep the report secret? The DOJ, as it turns out:
Because of that risk, an explosive, 1,000-page report on the bank by a federal monitor detailing HSBC’s malfeasance should be kept under wraps, the Justice Department insisted to the judge in the letter.
Releasing the report could tip off criminals and provide them a blueprint on how to avoid money-laundering safeguards, Justice claims.
In addition, releasing the report could scare away regulators in Malaysia and Hong Kong — who have promised to cooperate but only if the confidential information they supplied remained under seal, the Justice Department said.
So the DOJ expects us to believe that it is thwarting criminals—i.e., those who might exploit the findings of this report—by helping criminals–i.e., HSBC–keep their criminality covered up. Oh brother. Don’t they get that we don’t buy their BS anymore?
The money-laundering/mortgage connection
Moore’s logic for wanting to see the report is explained here:
Moore contends that the report, which says that the bank has operational problems in its mortgage operations, could be relevant to his claim with the CFPB.
“It is my contention that the report would (or will) validate my claims that HSBC is in direct violation of multiple sections of multiple Consent Decrees,” he wrote in a letter to Gleeson.
The Office of the Comptroller of the Currency agrees with Moore—HSBC has violated at least one consent decree, specifically one from 2011 concerning death-pledges. Here is a quote from a document styled as “Consent Order Amending The 2011 Consent Order and 2013 Amendment To The 2011 Consent Order”:
(3) The OCC has determined the Bank has failed to comply with forty-five (45) actionable items under Articles III, IV, V, VI, VIII, and IX of the Consent Order, including the Bank’s obligations under the Consent Order with respect to the sub-servicing performed by the third-party servicer on its behalf.
(4) The OCC has determined the Bank is in continuing noncompliance with and in violation of the Consent Order, and continues to engage in unsafe and unsound practices.
So at least two government agencies—the DOJ and the OCC—have determined that HSBC is in violation of multiple legal agreements between the bank and the government, yet HSBC continues to be allowed to operate and no one is being prosecuted or put in jail. Moore is definitely onto something and apparently the same judge that approved the DPA regarding drug money-laundering is now inclined to honor Moore’s request to have the 2015 compliance report be made public.
It’s not at all surprising, of course, that a bank that engages in money-laundering also tries to scam homeowners looking for help on making their mortgage payments. But that’s not the only connection between money-laundering and mortgages, in my view. So-called “securitization” with the use of the MERS system to make ownership of promissory notes completely opaque, is the ultimate form of seemingly legal money-laundering. Indeed, as we have written here before at LRM, MERS is the “invisibility cloak of the banksters”:
Yes, the banks don’t want you to see what they’re doing–or not doing, as the case may be. Specifically, they don’t want you to see that they have separated your note from your deed of trust/mortgage. In my opinion (and I am not an attorney) there are two main, unstated reasons for the existence of MERS: 1) to separate the security document from the note and 2) to purport to rejoin them as if they’d never been separated at the time of foreclosure.
The purpose of point 1 above (the purpose of point 2 is self-explanatory): for banks/financiers to be able to pledge or “sell” the same note multiple times (see this, this, and this)–i.e., rehypothecate–without having to indicate that the note has been sold multiple times in the county land records (via assignments in said records that used to be required for each sale of the note).
In any event, HSBC is but the tip of the iceberg, and hopefully Moore’s request for the release of the HSBC compliance report will be granted and the rest of the iceberg will be revealed, or at least begin to be revealed.