ML-Implode Gets “Wikileaks Treatment” As Wells Fargo Freezes, Closes Business Account

June 13th, 2012

feature photo
June 13th, 2012For Immediate Release

ML-Implode.com discovered yesterday (2012-06-12) in the course of its normal banking activities that Wells Fargo had frozen its bank account with no warning. Upon inquiring at the local branch (which had no direct knowledge of the incident), it was discovered the account had been flagged “credit risk”, and slated to be immediately closed.
These actions are more than slightly unusual because ML-Implode’s account was a plain checking account and was not an underwritten account. In fact, ML-Implode paid a monthly fee for the account, so Wells Fargo was certainly doing it no favors.

While the site is effectively insolvent (due to the impact of multiple frivolous libel suits from corrupt mortgage, e.g. by the outlawed Grant America scheme) and thus typically had a minimal balance, there had been no problems with overdrafts and all charges and obligations were always dutifully covered.

[ALERT: Help us fight this and other attempts to attack us and shut us down. Donate now. You can also contact us to inquire directly about sending cash or checks. We are also looking for pro bono legal support on financial threats such as this one, and first amendment threats against us. OUR FREE SPEECH IS YOUR FREE SPEECH — and freedom isn’t free!]

In fact, as part of the freeze, Wells Fargo made a $3500 deposit from ML-Implode’s merchant account processor “disappear”, leaving a short-term advance of $1500 from an affiliate un-covered, and a similar $1500 obligation to another affiliate unpaid. The whereabouts of the monies are unknown.

Other arrangements are being made; however, the actions are shocking due to their intrinsic lack of due process and harshness — no advance notice was given and no real reason was given for the action (as “credit risk” does not actually apply to the type of account in question).

It is believed that the actions were taken in retaliation for a recent series of articles by ML-Implode blogger Martin Andelman which pulled no punches in criticizing Wells Fargo over its foreclosure practices — in particular the tragic and horrific case of Norm Rousseau who was driven to suicide after Wells Fargo lost a mortgage payment and mistakenly foreclosed on the family’s home, despite a lengthy back-and-forth process which gave the bank ample opportunity to correct the mistake.

(Other recent articles by Andelman taking Wells to task that may have angered the bank include this one and this one.)

Andelman is not paid by ML-Implode and blogs wholly independently (as many others have done on in the past); ML-Implode does not dictate or control what he writes. As such, if Wells’ actions are truly in retaliation for the articles, they are apparently violating federal law: USC 47 USC § 230 forbids holding an internet “common carrier” (such as an ISP, forum, or any sort of hosting outfit) liable for the content users independently post or transmit.

The prior week, ML-Implode affiliate REST Report Matters (http://www.restreportmatters.com/), inspired and promoted by Andelman to give homeowners at risk of foreclosure access to the same loan analysis tools the banks have, also had its account shuttered by Wells Fargo. It appears the bank first followed Andelman’s references to REST Report Matters, targetted that company, then connected REST Report Matters back to ML-Implode’s business account (via affiliate transactions) and marked that account for “summary execution” as well.

Martin Andelman has no ongoing financial relationship with REST Report Matters, which means Wells’ shuttering of their accounts amounts to tortious interference with a legitimate, independent business.

Of course, since that business constitutes giving homeowners tools to force Wells and other banks to modify loans when compelled to do so by the HAMP and other programs, one can easily imagine that they believe they are killing two birds with one stone by trying to shut down them and ML-Implode (which generally supports just and equitable treatment of homeowners facing foreclosure).

The bank seems to have “covered” itself for its actions by effectively giving no reason for them, so there is nothing to appeal or argue against. However, our sources inside the bank tell us the critical blog posts were the motivating factor.

There is little precedent for such authoritarian, if not illegal actions by a bank, which effectively amount to domestic economic sanctions.

In one case last October, Goldman Sachs pulled its support from the credit union that was merely honoring the Occupy Wall Street group.

Prior to that, in 2011, Wikileaks famously had its account frozen by PayPal and its Swiss bank account closed under pressure from the US State Department.

Meanwhile, Wachovia in 2011 (by that point a subsidiary of Wells Fargo) paid a less-than-.1% fine for knowingly allowing nearly $400 billion in drug money to be laundered through itself — a fact which is essentially not discussed in the media at all, and so the outcome constitutes essentially a free pass.

In a May 2010 landmark decision, the New Hampshire Supreme court ruled in the case of The Mortgage Specialists vs. Implode-Explode Heavy Industries, Inc. (ML-Implode’s owner/operator) that the site constituted the “news media” and should be afforded all the journalistic protections provided by the law and our general tradition of free speech jurisprudence.

Category: Bailouts, Corporate Management, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

34 Responses to “ML-Implode Gets “Wikileaks Treatment” As Wells Fargo Freezes, Closes Business Account”

  1. ML-Implode banks w/ “Wells Fargo” ?? wtf?

    ML-Implode banks with the Successor to a self-acknowledged ‘Money Launderer’, gets “S****ed”, then Squawks.. (?!)

    “Cry Me a _______ River”

    ____ Him.

  2. wcvarones says:

    Stupid is as stupid does.

    Bank with the dogs, wake up with fleas.

  3. Frilton Miedman says:

    Next step, banks “accidentally” close personal accounts for individuals whom pose 1rst amendment danger to corporate PR.

    Democracy owned, game over.

  4. Mike in Nola says:

    Mark took the words right out of my mouth.

  5. S Brennan says:

    It would seem the day of corporate totalitarianism* is upon us. Thank goodness this day happened while Democrats controlled Treasury, FTC & Justice Department. Just think of all the faux Democratic outrage we have been spared by having the Dems in power during historical junctures such as this. Now this can sink down memory hole unnoticed by the Democrats who hold power to stop this.

    * “A simple definition of totalitarianism can be taken to be ‘a system of rule, driven by an ideology, that seeks direction of all aspects of public activity, political, economic and social, and uses to that end, at least to a degree, propaganda and terror”

  6. webmartians says:

    So … will WF close your accounts (WF or elsewhere) because you publicized this?

  7. James Know says:

    The account cloture issues are problematic. But, the more problematic control issue was referenced …. laundering of drug monies from Mexico. The Wells/Wachovia settlement was for actions by Wachovia from 2004 to 2007 ( For S. Brennan, I believe that the Republicans were running Treasury and Justice at the time). From 2004 to 2007, Wells/Wachovia processed $373.6bn in casas de cambio accounts (cash accounts). What was the settlement …. $110 m. in forfeiture of transaction profits and a $50M fine for failing to monitor cash used to ship 22 tons of cocaine.

    Oh, by the way, in the Dodd Frank bank regulation debate, some bank lobbyists and Republicans compared the proposed new banking regulations to “burdensome and costly” money laundering rules often referred to as “Know Your Customer” rules. Go figure.

  8. Jim67545 says:

    Reminds me.. anyone know where I can access the names of the billionaire PAC doners and the companies they control? (So I know who to boycott.)

  9. gordo365 says:

    I sick of reading about banksters, and about their CEOs testifying in congress.

    When did these POS take over the “front and center” position in our society?

  10. DeDude says:

    What exactly was the reason to have an account with these banksters in the first place?

  11. [...] it has blood on its hands and is not above taking petty revenge. Even though some major sites like Barry Ritholtz’s The Big Picture have publicized the San Francisco bank’s petty and possibly illegal treatment (it appears to [...]

  12. Well Fargo is content to profit from the corruption it fosters… this may not be so unusual… its accustomed to having its own way… and being seen as ‘the good’ one.

    And has the good wishes of Uncle Buffet and those in high places.

    Response to OCC: TBTF and the Housing Collapse
    http://culturalengineer.blogspot.com/2012/04/response-to-occ-tbtf-and-housing.html

    Never cede transaction networks to narrow interests.

    P.S. to any who may be paying attention, it seem likely to me that the Commons-dedicated Account Network has a role in both Doc Searls VRM (Vendor Relationship Management) … as well as… in the longer run providing a check on this sort of oligarchical abuse.

    Leveling the Transaction Landscape: Technology and the Campfire
    http://culturalengineer.blogspot.com/2011/04/leveling-transaction-landscape.html

    Scale in the financial services sector may provide some efficiencies… just as a cancerous tumor efficiently matabolizes and grows…

    Its just that it ends up killing the body that contains it.

  13. whskyjack says:

    Jim

    I always start at Open Secrets

    http://www.opensecrets.org/index.php

    Some of the current big boys aren’t being tracked though.

    Jack

  14. DeDude:
    Maybe they were the only game in town. Or the TBTF banks were the only ones in town. I don’t know where the outfit(ML-Implode) is located.

  15. Stuart says:

    Mark, ok, perhaps questioning the wisdom of banking with WF given the nature of the site’s content, but I think that is missing the point of Barry’s post. This is a very dangerous precedent taken by WF. If WF can do it in this instance, AND get away with it, then what prevents any other bank from exercising the same bully tactics to……anyone they chose to single out. Imagine your reaction if you posted a negative comment about the bank you have your account with, to suddenly find yourself locked out of it merely because some technocrat took offence with your post. I can hear the scoops coming… I don’t like this direction events are charting.

  16. mandelman says:

    (Other recent articles by Andelman taking Wells to task that may have angered the bank include this one and this one.) Oh, come on… you’re cutting me kind of short there, Barry… just for starters how about:

    http://mandelman.ml-implode.com/2012/04/federal-judge-magner-wells-fargos-behavior-highly-reprehensible/

    http://mandelman.ml-implode.com/2012/02/insider-says-wells-fargos-independent-foreclosure-review-for-occ-is-a-sham/

    http://mandelman.ml-implode.com/2012/02/urgent-doer-alert-wells-fargo-youve-deceived-confused-and-beaten-another-senior-into-submission/

    http://mandelman.ml-implode.com/2012/02/wells-fargo-bank-and-patricia-martin-part-2-a-bank-that-cannot-be-trusted/

    http://mandelman.ml-implode.com/2011/12/doer-alert-wells-fargo-bank-how-could-you-do-this-to-a-mother-of-four/

    http://mandelman.ml-implode.com/category/its-the-banks-betch/

    http://mandelman.ml-implode.com/2009/06/wells-fargos-ghetto-loans-and-the-mud-people/

    http://mandelman.ml-implode.com/2009/06/wells-fargo-closes-accounts-if-firms-offer-loan-mod-services/

    http://mandelman.ml-implode.com/2009/04/wells-fargos-surprising-profits-time-to-go-short/

    http://mandelman.ml-implode.com/2009/04/wells-fargo-may-need-50-billion-wow-that-was-even-faster-than-i-thought/

    And that’s just what I could cut and paste in a few minutes. Almost 750 articles covering the political, economic, social and legal aspects of the financial and foreclosure crises… I’m just saying…

    Martin Andelman

  17. Iamthe50percent says:

    The banks rule. They own Congress. They own the White House. They own us.

  18. DrungoHazewood says:

    Even democrats have to admit the their half of the country’s two-headed enemy, just took a serious bite out of us.

  19. kaleberg says:

    If Wells-Fargo is freezing accounts and unable to give a reason, that suggest insolvency. Have you contacted the FDIC for your money? If you have less than $100,000 or whatever, you might be covered. Contact your local office. The rest of you, get your money out while you can. No offense to the FDIC which usually cleans things up pretty quickly, but who needs the hassle?

  20. marianlibrarian says:

    I bet there is more to this than mets the eye. Maybe that REST Report Matters site is having a lot of disputed charges from credit card companies or something–kinda creepy site. I hate big banks but I can’t see WF monkeying around with accountholders’ accounts.

  21. mandelman says:

    Here’s Wells closing accounts of lawyers representing homeowners facing foreclosure. Just saying…
    http://mandelman.ml-implode.com/2009/06/wells-fargo-closes-accounts-if-firms-offer-loan-mod-services/

  22. dommack says:

    What is it about Move Your Money that these people don’t understand?
    You write hugely critical articles about WF and you keep your money there?
    If your actions are not in alignment with what you write, you are just a blowhard, and more important, nothing will change substantially until people take action, not just talk.

  23. ConscienceofaConservative says:

    There’s an angle not fully explore here. What are the laws? Can a bank just close down any account without notice and does that apply to yours or mine? What laws at either the Federal or State level exist to protect our accounts from being terminated without just cause? Also it’s hard to understand that monies could not be then wired to a new bank account or are they now frozen in some protracted way?

  24. webmartians says:

    Some more surfing uncovers some possible concerns by WF that ML may have been involved in (or the victim of) some nasty dealings above and beyond just harassment: WF may be just as gun-shy as it seems vindictive.

    Also, kudos to whskyjack for mentioning OpenSecrets (http://www.opensecrets.org/). I can’t emphasize how valuable OS is; it’s always a good source for cogent, considered and reliable information.

  25. rktbrkr says:

    I have moved my banking activity to TD Bank (Canadian, eh) and Penfed credit union. TD provides exceptional customer services (formerly a Commerce branch), Penfed is #2 largest credit union and only requires a minimal affiliation to qualify for membership.

    I don’t understand why anyone familiar with the shenanigans of the TBTF banksters does business with them. For your personal sanity you should steer clear on them plus you’ll be strengthening our banking system – even just by a tiny bit.

  26. Vasastan says:

    To get things straight, the $400B from Mexico that was mentioned re. Wachovia was the gross amount processed by Wachovia without proper controls. The amount which was probably linked to the drug industry was $20B. I agree that the punishment meted out was offensively puny, compared to what other (smaller) players would normally be hit with – just wanted to get the numbers right.

  27. ashpelham2 says:

    For everyone criticing ML-implode for having it’s bank account at WF, sometimes small operations like this one just don’t have any other options. In fact, all of these large money-center banks have made competition almost non-existent due to their merger activity during the Bush era. The rules of the game were changed dramatically, while the Repubs held highest office. Remember, these are the same folks who promote free, market economy. They discourage government interference. Too bad that they what they do support is government compliance with corporations.

    Outfits like ML-implode rely completely on donations from readers. They have to take money in for their use through very traditional, capable financial institutions who can handle the transactions. Try getting that from your local credit union.

  28. lippard says:

    “As such, if Wells’ actions are truly in retaliation for the articles, they are apparently violating federal law: USC 47 USC § 230 forbids holding an internet “common carrier” (such as an ISP, forum, or any sort of hosting outfit) liable for the content users independently post or transmit.”

    This sentence is a load of nonsense. First of all, this law, part of the Communications Decency Act, has nothing to do with common carrier status (and ISPs and forums do not have common carrier status). Second, what this law says is that online providers cannot be held liable for defamation by their users–i.e., you cannot obtain funds in a defamation action against a provider for what their users say. It doesn’t say that an online provider can’t cancel the accounts of users who they think are engaging in defamation, or that businesses can’t decline to provide services to users they think are engaging in defamation.

  29. [...] voters who are at fault for not pushing them! (Just as long as they don't run afoul of the NDAA, or an over-zealous bankster.) Come on. I can see how this would be true in marginal cases, but when Schneiderman signs onto a [...]

  30. dommack says:

    @ashpelham2
    I agree with what you say about the banks and their influence. I don’t agree that ML-Implode had no choices. They weren’t doing anything exotic.
    From the article: “ML-Implode’s account was a plain checking account and was not an underwritten account. In fact, ML-Implode paid a monthly fee for the account, so Wells Fargo was certainly doing it no favors.”
    They had a merchant account processor, presumably separate from WF, so they had no reason, and in my opinion, no excuse, to be banking there.

  31. arthurcutten says:

    http://ml-implode.com/staticnews/2012-06-14_DearKarlDenninger.html

    ML-Implode responds to its critics who blame them for having a small amount of money at Wells.

  32. subscriptionblocker says:

    Barry has done his job. Now it’s time to do ours. Commenting here counts as nothing unless following a note of displeasure to your Congressman and sending ML -implode funds.

    Unfortunately, even when WF loses – it’s a strategic loss. Unless players there go to prison – it *will* happen again.

    Folks desiring change need to be laser focused on “prison time for bankers”.

    After this is over we can get snarky about “Why on earth did you maintain a WF account?”

  33. [...] it has blood on its hands and is not above taking petty revenge. Even though some major sites like Barry Ritholtz’s The Big Picture have publicized the San Francisco bank’s petty and possibly illegal treatment of mortgage blog ML [...]

  34. [...] to paranoid, well, consider Wells’s vindictive closure of checking accounts to punish a blogger for highlighting how Wells’s actions contributed to a borrower’s [...]