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You wouldn't know it by watching the news or reading the paper, but America's banks are on the largest crime spree the country has ever known. Let's go to the highlight reel, shall we?
In July, Wells Fargo paid a $175 million settlement after the feds caught its brokers systematically pushing minority customers into mortgages with higher rates and fees, even though they posed the same credit risks as whites.
One study found that Wells Fargo charged Hispanics $2,000 more in what the Justice Department called a "racial surtax." The bank docked blacks nearly $3,000 extra for their own improper pigmentation.
But despite a colossal civil rights fraud perpetrated against 30,000 customers, the settlement amounted to just .011 percent of the San Francisco bank's annual income. It was like forcing a $30,000-a-year working stiff to pay a $240 fine.
Across the country, in Minneapolis, U.S. Bank also swindled its customers, though at least it let whites in on the action. Instead of logging debit card purchases in the order they were made, the bank rearranged them from highest amount to lowest, the better to artificially stick customers with overdraft fees.
U.S. Bank paid $55 million to settle a class action suit in July. It was the 13th major bank caught running this scam.
Yet these titans of finance were pikers compared to American Express. It promised $300 to anyone who signed up for its Blue Sky card, then decided it would be way better to just stiff them. The company was also caught charging illegal late fees and discriminating against older applicants. The penalty for its sins: $112 million in fines and refunds.
These were just the opening salvos of the assault. Bank of America was caught illegally foreclosing on the homes of active-duty soldiers. Visa and MasterCard were charged with fixing the prices they charged merchants to process credit card payments. Morgan Stanley colluded to drive up New York electricity prices. And in the most depraved case of all, Morgan Stanley was even sued for allegedly swindling Irish nuns in an investment deal.
If they'd been common robbers, the bankers surely would have faced indictments. After all, their scams have run for years, their breadth and coordination breathtaking.
But not a single boss went to jail. Some firms settled for just a fraction of what they'd stolen. Most have never admitted wrongdoing. And in the ethics-optional land known as Wall Street, many saw their stock prices rise.
America's country club set has forged its own replica of the Mafia—only bigger, broader, and capable of unleashing far more damage on the U.S. economy.
"Unquestionably, that's true," says Notre Dame law professor G. Robert Blakey, whose career prosecuting organized crime runs all the way back to the Kennedy administration. "I was looking at stuff on Mulberry Street, and the real theft was on Wall Street. . . . All of the people who ran the scams have their big houses and their airplanes, and they're laughing—they got away with it."
The crime wave is a ready-made campaign issue: Gucci villains plundering the middle class. But you haven't heard a peep out of Barack Obama or Mitt Romney. Both have records they'd prefer you didn't notice.
The situation leaves Sam Antar with a sense of longing. He's a former chief financial officer convicted of securities, mail and wire fraud.
"My biggest mistake in life was that I committed my crimes in the 1980s," he says. "If I committed them today, I wouldn't even get house arrest. I'd just hire a good lawyer and pay a fine and I'd be free."
The Prom Queen Visits Washington
Capitol Hill's approach to organized crime—at least the yacht-club variety—was on display in June, when JP Morgan Chase chief executive officer Jamie Dimon was summoned to appear before the Senate Banking Committee.
Four years earlier, American taxpayers shoveled him a $25 billion bailout package. But Dimon had since refashioned himself as the sweetheart of Wall Street, the heroic captain who'd weathered the storm. Obama called him "one of the smartest bankers we've got."
On this day, that compliment appeared based on a very low bar. A Morgan trader known as the "London Whale" had just gambled away a stunning $6 billion by making bad bets on the credit markets. His behavior reflected the same strain of incompetence that detonated the economy in 2008.
The senators had presumably summoned Dimon to extract a pound of flesh. Instead, the exact opposite happened.
They stumbled over themselves with softball questions and blubbering supplication.
Typical of the biting line of inquiry was Tennessee Republican Bob Corker: "You're obviously renowned—rightfully so, I think—for being one of the best CEOs in the country," he told Dimon.
So much for protecting the economy.
By the time the hearing was over, Dimon may have needed a post-coital shower.
Conveniently unmentioned at the hearing—or covered in the press—was that JP Morgan was in the midst of a criminal bender that would make the Genovese crime family envious.
It began the year before, when Dimon's bank paid a $27 million settlement for systematically screwing 6,000 active-duty soldiers. JP Morgan was caught overcharging on interest rates and illegally foreclosing on the soldiers' homes. (The bank did not respond to interview requests.)