Bank Of America (BofA) Money-laundering probe

Okay folks - suppose you work for a bank - a huge bank, like Bank of America (BofA). Imagine your job is public relations - you are involved in the creating and timing of news releases to various news agencies around the globe. Okay? Do you think the timing of these two very different (and unrelated) news articles might cause you to reach for some good, old Pepto B?

Paribas to assume $2 bln of BofA client assets
(Tuesday February 21, 4:06 pm ET)
Sounds like a sweet deal for BofA - $2 BILLION assumed - not sold, but assumed by BNP Paribas. Let's read on:

"Bank of America Corp. has signed an agreement to transfer up to $2 BILLION in non-U.S. wealth-management customers to BNP Paribas. The accounts are managed by Charlotte-based BofA's global wealth and investment management division.

The transaction, which is subject to the approval of governmental authorities, is expected to be completed in the coming year. Financial terms of the agreement weren't disclosed.

Transferred customers will be served by BNP Paribas's offices in Miami and San Francisco." (emp.mine)

PNB Paribas has a bit more detail within their corporate press release section:

The transaction will involve the transfer of up to US $2 billion in client assets, representing approximately 2,000 non-US wealth management accounts...

François Debiesse, head of BNP Paribas Private Banking stated: "This transaction gives us the opportunity to double our presence in the United States for the servicing of non-resident wealth management clients”.

Seno Bril, chairman of BNP Paribas Investment Services added: “We are delighted at the prospect of providing investment and wealth management services to these clients. They will benefit from a range of products and services, specifically tailored to address their complex international financial needs".(emp.mine)

This is interesting strictly from a man-on-the-street point-of-view (MOTSPOV); PNB is "delighted" by the prospect. The MOTSPOV begs a question: what did BofA have to say about it?

Bank of America's International Wealth Management group will continue to provide broad-based financial advice, products and services, for clients from select countries where it is able to bring the full breadth of the entire franchise to bear.

Richard F. Kane, head of International Wealth Management, said, “As we strengthen our international focus on locations where clients can also tap the full resources and capabilities of Bank of America, we are committed to working closely with BNP Paribas to ensure a smooth transition for accounts that are being transferred to this recognized organization. (emp.mine)

Sounds good for BofA - nothing like getting rid - oops, selling - darn it, transfering to another organization - shoot, I mean letting another bank assume approximately 2,000 non-U.S. wealth-management customers - without having to disclose the financial details...

UNLESS, that is, you caught another article released the very same day:

The Business Journal: BofA nears settlement on money-laundering probe
2006-02-21

Bank of America is close to settling an investigation of money laundering from South America, Manhattan District Attorney Robert Morgenthau told Bloomberg news agency in an interview.

"We hope to settle in the next couple of weeks," Morgenthau said. Prosecutors are working out financial terms of the settlement, he said.

According to Morgenthau, Charlotte-based BofA moved about $2 BILLION through New York branches from clients in South America. Most of the transfers were made for a Uruguayan company, which operates near the borders of Paraguay, Argentina and Brazil.

The area is a hub of illegal activity, including drug and arms trafficking, that funds Islamic terror groups, according to a 2003 Library of Congress study.

With 32 percent of the local market share and $8.1 billion in local deposits, Bank of America (NYSE: BAC) is the market leader in North Florida. The bank may pay about $25 million to resolve the matter, a government investigator, who asked not to be identified, told the news agency.

"We're focusing on unidentified money in terms of ownership coming into New York and going to destinations which could be for terrorists," Morgenthau said.

BofA has settled several legal claims in the past year. It paid $461 million to resolve its liability for bond losses stemming from the 2002 collapse of WorldCom Inc.; $59 million to end a class action lawsuit by Enron Corp. investors; and $9 million to settle an overtime pay lawsuit filed by loan department workers in California. BofA spokeswoman Shirley Norton told Bloomberg that BofA "does not comment on its communications with regulators and law enforcement." (emp.mine)

This is ABSOLUTELY HILIARIOUS - unless of course you are the person responsible for BofA press releases! (Betty Reiss - could be the person or at very least, one of the people).

If the $25 million settlement is accurate, the BofA will have paid out nearly $600 MILLION in the settlement of legal fees in slightly more than a one-year period. WOW - MOTSPOV says, "That's a whole lotta pennies!" MOTSPOV also asks, "Why isn't anyone facing jailtime? $2 BILLION dollars of money laundering - did anyone at the very least, get fired?" We'll probably never know...

Pure coincidence, not checking the alignment of planets and stars, or downright bad luck? Who knows - maybe someone's not reading their tea leaves. But at the very least, you might find the timing an amazing coincidence.

And then there is this precious jewel of news (3/9/2006):

Charlotte-based Bank of America Corp. and Wachovia Corp. are among the financial institutions that are reissuing debit cards to customers after a security breach at a "third-party location," possibly a U.S. retailer.

"We have notified some customers that their card information may have been compromised at a third-party location," Bank of America spokeswoman Betty Riess said today.

Neither bank would disclose how many customers have been affected. Both institutions said card holders would not be held responsible for fraudulent charges.

Wachovia spokeswoman Mary Beth Navarro said the breach came outside Wachovia, but declined to name the third party. Customers who have been affected will receive a new card in the mail and a letter explaining the situation, she said.(emp.mine)

I wonder why neither bank would disclose how many customers were effected? What if it were 1,000 - would a thousand be newsworthy? 5,000? How many would be newsworthy? Who knows - but the MOTSPOV suggests by not announcing a number, people will speculate on a number much higher than were actually involved. Oh well...

Get out there and enjoy the day!