FBI Swamped with Bank of New York Violations

FBI Swamped with Bank of New York Violations of Non-Prosecution Agreement

by Frank Brady © 2007
Friday, April 6, 2007

In November of 2005, the Bank of New York in a Non-Prosecution agreement with federal prosecutors was required to pay $38 million to settle various criminal charges. Those crimes involved fraud, money laundering, reporting failures and cover-ups over a ten-year period. And as admitted to by the bank, those criminal acts were committed by Bank of New York executives, officers and employees. During its investigation, federal agents found evidence of $7 billion in underground Russian monies, phony import/export businesses, fraudulent medical equipment leases, elaborate cover-ups, wire fraud and tax evasion. One Long Island Bank of New York branch manager admitted that she improperly executed escrow agreements to assist highly valued customers.

The current allegations include the continuation of the illegal activity by the Bank of New York to improperly assist its highly valued customers, according to informed sources. Those “highly valued customers” include numerous law firms that are on the bank’s approved preferred list who, it is alleged, have been illegally favored by certain courts and specified judges in at least four different counties.

“Most of the malfeasance stems from the Surrogate’s Courts, though various New York State Supreme Courts are also named,” according to one source familiar with the filings and who asked not to be identified. If the allegations are true, those acts would appear to be in violation of the 2005 Non-Prosecution agreement.

When the Bank of New York admitted its criminal conduct and forfeited $26 million to the Federal Government, it also agreed to pay another $12 million in restitution to its victims and to refrain from unlawful activity for three years. The federal government’s press release in November of 2005 noted that, “Should the Bank of New York violate the terms of the agreement, or commit any other crimes, it shall be subject to prosecution, including prosecution for the criminal conduct described in the agreement.”

“I can tell you that top executives at the Bank of New York are frantic over the current allegations that they have violated the Non-Prosecution agreement,” said a New York attorney who requested that he not be identified. “The current inquiries could lead to dozens of indictments, and would surely involve court employees and a few judges. You don’t have to be James Bond to find out what judges are allowing lawyers for the Bank of New York to get away with everything- the question is WHY. Oddly, the Non-Prosecution agreement was meant to bring closure and so they could get back to business as usual. Instead, the agreement brought other long-time and on-going illegalities to light.”

One employee, who asked not to be identified in this article, says that he has provided information showing how “illegal activity by law firms are overlooked by judges who have close ties to those lawyers.” “It’s frightening. I know lawyers in estate cases involving this bank who admit they’ve handed over envelopes full of cash.”

One Manhattan trust and estate attorney says that he has learned to live with “bank-controlled biased courts.” “I flatly refuse to take any contested estate case outside of Manhattan,” he says. “I don’t waste my time going to courts in counties where the Bank of New York owns the court.” He declined to specify about which counties he was referring.


In 2005, United States Attorney Rosylynn R. Mauskopf called the Non-Prosecution agreement with the Bank of New York one of this nation’s largest settlements with a financial institution. “When that trust is knowingly violated at the highest levels of a financial institution, as happened here, fraud and other criminal activities continue unabated, victims suffer staggering losses, and the integrity of our financial systems is seriously undermined. This agreement fixes responsibility for the illegal conduct by bank executives, officers, and employees, secures immediate compensation for victims, and ensures accountability going forward in the exercise of an essential public trust.”

“When the Bank of New York admitted to its criminal activity, I’m sure the U.S. Attorney’s office thought the matter was largely resolved,” says the estate attorney. “But with the onslaught of new complaints against the bank, federal investigators are only now seeing just how deep these frauds go. It’s as simple as the lawyers getting a judge to approve the Bank of New York as a fiduciary, executor, guardian, etc., and then the bank hires that lawyer as its legal counsel in that matter. Lawyers tell everyone that this is the custom to get around any conflicts that are raised.”

“After all that’s happened, the Bank of New York has to be characterized as factually dishonest,” says the veteran estate attorney. And he asks an intriguing question, “How does any Court of Law approve a position of trust- as fiduciary, executor, guardian- to a petitioner like the Bank of New York who has admitted to criminal acts involving fraud, money laundering and cover-ups, and who has paid $38 million to avoid criminal prosecution?”

Good question.

Laughing, the estate attorney asks one last question. “Enough said?”

Hardly.

The FBI will not comment on the current investigation, but has acknowledged that a special unit was created to monitor the Bank of New York and investigate the allegations pertaining to violations of the Non-Prosecution agreement.

Frank Brady © 2007

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