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BBVA Bank a bank with a history of money laundering has been  authorized to do business in the United States with the sponsorship of Wells Fargo Bank and the approval of the Federal Reserve.

This is a story of governmental actions or inactions that now have compelling consequences for the American people.  It’s a story that has gone un-noticed until now largely because we are constantly reminded how our government is preventing our banking industry from repeating activities that fueled our present financial  situation.  The powers to be would have us believe that they have banking matters of concern in hand.

It may be correct that our government has collared the obvious participants and held the most culpable of them accountable for their deeds but the illegal pilfering has not stopped.  In fact the trail of this story leads to political positions on high.

This is a story that does not prompt the question  “ How did these things happen?”  The how is obvious.  We can  assume this story is about corruption in our government.

BBVA stands for Banco Bilbao Vizcaya and Argentaria.

Wickipedia says:

Banco Bilbao Vizcaya Argentaria ( BBVA ) is a bank Spanish  with interests in financial institutions in over thirty countries.

It has about 107,000 employees, about 47 million customers worldwide and about 1 million shareholders.

Before the name BBVA they were BBV (Banco Bilbao Vizcaya). In 1999 BBV merged with its rival, Argentaria (an Argentinean Bank) amid an international money laundering scandal involving the CIA and the IRS.

Argentaria’s Chariman was Emillio Ybarra and the Co-Chariman was Francisco Rodriguez Gonzalez.

The new bank now known as BBVA was initially co-chaired by Argentaria’s chairman Emilio Ybarra and Francisco Gonzalez.  Ybarra resigned and now Gonzalez rules BBVA  himself.

The money laundering scandal investigation was launched in 2000 by the United States and in Spain .

The Financial Times’s Leslie Crawford reports:

In July 2002, it was reported that the US Department of Justice is investigating alleged money laundering by BBVA, Spain’s second largest bank.

US attorneys have arrived in Madrid to question Emilio Ybarra and Pedro Luis Uriarte, the bank’s former chairman and chief executive respectively, who resigned in December 2001 amid a scandal over secret offshore accounts.

The US probe centers on BBVA’s activities in Puerto Rico, where it has an offshore subsidiary.

A copy of the letter, obtained by the Financial Times, says former BBVA employees in Puerto Rico interviewed by US prosecutors alleged that “BBVA did not comply with US banking laws, did not place any importance on compliance, maintained customer accounts in false names to conceal their true identities”.

The probe was triggered by the testimony of Nelson Rodriguez, a former BBVA employee in Puerto Rico, who is serving a jail sentence for embezzlement.

This investigation resulted in a Spanish fine levied against the newly formed BBVA of 40 million pesos and the resignation of Emilio Ybarra as co-chairman.  This left total control of the bank in the hands of Franciso Rodriguez Gonzalez. Rodriguez escaped prosecution in the matter by proclaiming that the laundering allegation occurred prior to his association with Ybarra. It’s unclear how Rodriguez could co-chair the BBV without knowing about the laundering.

Although it was Ybarra who it seems  took the major fall in this particular investigation, the Spanish bank BBV has been the subject of Spanish investigations going back to 1970.

According to a BBVA spoksman, “There were funds in the Cayman Islands, Jersey, Liechtenstein and Switzerland, but they were not, as some people think, all in accounts. They were a mixture of accounts, corporations, foundations…all sorts of stuff. The total came to €225m or £139m. The funds were used for trading shares, derivatives and other things on the market. “After our merger in 2000 we closed the accounts, brought the money back to Spain and paid the tax. We actually informed the Bank of Spain ourselves; nobody knew about it beforehand. We didn’t want to make it public, but there it is. “The papers are saying that the accounts were used to influence politicians, pay Basque terrorists and provide sweeteners for business deals but that isn’t on the charge sheets.

 In fact, we deny any illegal use of money.” The reference to the payment of Basque terrorists harks back to the time in the 1970s when ETA, the separatist group, kidnapped a relative of Ybarra’s, and a ransom demanded of the bank. The bank did not pay up and the hostage was killed. Ybarra has been accused of being soft on terrorists ever since, although the spokesman denied that BBV had ever paid any protection money to shield its executives from kidnapping with embezzled money that was washed through the offshore accounts, trusts and institutions.

The relevant mergers in the story began in 1987, the year the offshore entities came into being. Banco de Vizcaya was in the process of merging with Banco de Bilbao, a task it completed in 1988. The resulting entity, Banco Bilbao Vizcaya or BBV, then merged with Argentaria in 2000 to form BBVA”

In 2002, Patrick Haynes the IRS special agent in charge of the New York field office and John Gilbride the special agent in charge of the New York DEA announced the unsealing of an indictment charging Alfonso Portillo, the former President of Guatemala with conspiring to launder millions of dollars he embezzeled from the Government of Guatemala through bank accounts located in the United States.

Starting in  2000 until 2002 Portillo embezzled about 2.5 million dollars provided by the government of Taiwan’s Embassy in Guatemala. Portillo endorsed these checks and caused them to be deposited  in a bank account in Miami Florida.

One million of the money was diverted through a series of transactions and transfers intended to conceal the source and origin of the funds to bank accounts in the name of Portillo’s ex wife and daughter at the BBVA bank in Paris. BBVA assisted Portillo by further laundering the money through financial institutions in Luxembourg and Switzerland among other places.

In 2001 Portillo embezzeled approximately 30 million Quetzales (3.9 million USD) from the Guatemalan Ministry of Defense. These funds ultimately ended up in a BBVA account controlled by Portillo’s wife.

Franciso Rodriguez Gonzalez has maintained his innocence in these illegal transactions stating: “I felt shocked, worried, and betrayed”  BBVA represents one of the biggest scandals to hit Europe’s banking sector in years.  The discovery of hidden BBVA bank accounts set off a chain of events that is still rocking Spain.

In July of 2002 the US Justice Department asked Spain’s Supreme Court Judge Baltazar Garzon to provide information on allegations of money laundering involving BBVA’s Puerto Rican unit. The allegation was that BBVA Puerto Rico helped Colombian drug smuggler Marco Aurelia Royo Anaya launder money, using accounts in tax-havens such as the Cayman Islands, through the unit itself and its private banking arm.

In January of 2005 BBVA was part of a criminal probe involving Venezuela’s Chavez. The allegation was that in 1998 and 1999 BBVA made two payments to aspiring president Chavez in the amount of $525,586 and $1,000,000.00 which was a violation of Venezuela’s law prohibiting the acceptance of contributions from foreign companies.

In spite of the previous laundering allegations against BBVA, in January of 2005 BBVA Group was authorized to acquire the Laredo National Bank based in Laredo Texas and in 2006 it acquired the Texas Regional Bancshares of McAllen Texas as well as the State National Bancshares to become the fourth biggest bank in Texas after Wells Fargo, Bank of America and JP Morgan Chase.

In December of 2009 the trustees in the Bernie Madoff case went after 7 global banks to recover more than 1 billion dollars.

Irving Picard, the trustee for the liquidation of Bernard Madoff Investment Securities filed complaints against Citigroup’s Citibank, Natixis, Fortis, ABN AMRO Bank, BBVA, Nomura and Merrill Lynch now owned by Bank of America.

The complaints allege that the banks enabled the Madoff Ponzi scheme by opening a spigot of new money into the Madoff feeder fund network by creating and offering derivative investment products linked to various Madoff feeder funds. Specifically 45 million dollars is sought to be recovered from BBVA.

In October of 2010 the Argentinean Financial Intelligence Unit sanctioned BBVA Banco Frances for breaching the anit-money laundering regulations by failing to report a transfer  in a fraudulent scheme.  All this under the watch of Francisco Rodriguez Gonzalez.

This operation was conducted by Jorge Pallavicino and involved an investigation that cost the Ministry of Finance to pay a non-existent debt valued at $53,963,112,072.50 pecos.

The Financial Intelligence Unit said in its decision to fine BBVA 40 million pesos that BBVA “never reported the deposit of 39,393.072.12 pesos into a Savings Account that was quickly transferred to the Banco De Valores SA.”

Purchases of financial institutions in the United States by foreign banks or holding companies are required to  be approved and sanctioned by the Federal Reserve. The Federal Reserve code of regulations specifically Title 12 includes the “Approval of offices of foreign banks: procedures for applications, standards for approval representative office activities and standards for approval and the preservation of existing authority.

This title says in part:

“Ensures that the foreign bank has adequate procedures for monitoring and controlling its activities worldwide”

“Obtains information on the dealings and relationship between the foreign bank and its affiliates, both foreign and domestic”

“In deciding whether to use its discretion under this paragraph (c)(1)(iii), the Board also shall consider whether the foreign bank has adopted and implemented procedures to combat money laundering.”

“Measures for prevention of money laundering. Whether the foreign bank has adopted and implemented procedures to combat money laundering, whether thre is legal regime in place in the home country to address money laundering and whether the home country is participating in multilateral efforts to combat money laundering.”

“Some of these supervisory responsibilities are delegated to the Reserve Banks by the Board of Governors. These responsibilities include the conduct of field examinations and inspections of state-chartered member banks, bank holding companies, and foreign bank offices in this country and the authority to approve certain types of bank and bank holding company applications.”

It appears that the Federal Reserve should not have allowed BBVA to do business in this country.

The Federal Reserve is made up of a board of governors with Ben S. Bernanke, serving as Chairman. The board supervises 12 Federal Reserve Bank districts.

BBVA’s main US office is located in Birmingham Alabama which is in the 6th Federal Reserve District.

Codefore researched the District Federal Reserve Bank Presidents to find which ones, if any, had direct connections or an employment history with the banking industry. All but one did not have any obvious connections with the private banking industry.

Dennis P Lockhart is the President of the 6^th Federal Reserve Bank district.  Lockhart was appointed in March 2007 by then President Bush.

According to Lockhart’s bio he held various positions, both domestic and international, with Citicorp/Citibank (now Citigroup) from 1971 to 1988. Early in his career with Citibank, he worked in the Middle East, first in Saudi Arabia as head of infrastructure project financing and then in Greece as training director for credit and managerial staff serving the region.

Mr. Lockhart also served in Iran as chief operating officer of a commercial and consumer banking joint venture between Citibank and an Iranian affiliate. From 1978 to 1986, he was senior corporate officer of the Southeast office of Citibank in Atlanta. From 1987 to 1988, Mr. Lockhart was head of the firm’s Latin American debt-to-equity swap investment program, designed to restructure sovereign debt.  Its plausible that Lockhart met Rodriguez while serving in Latin America where BBV had a significant presence.

From 1988 to 2001, he worked at Heller Financial, where he served as executive vice president and director of the parent company and as president of Heller International Group, which, through joint ventures or wholly owned operating companies, had activities in commercial banking, finance, and merchant banking in North and South America, Europe, and Asia.

From 2001 to 2003, Mr. Lockhart was managing partner at the private equity firm Zephyr Management L.P., based in New York with activity in Africa and Latin America.

How did a bank with a history of money laundering and questionable management become a significant banking player in the United States?

Before Franciso Gonzalez joined Argentania he was founder and chairman of FG Inversiones Bursátiles, a leading securities firm in Spain, eventually acquired by Merrill Lynch. He started his own company after having qualified as a licensed broker (first of 1981 class) and got a Seat at the Madrid Stock Exchange.

As of July 2006, he is the Chairman of the European Financial Services Round Table (EFR). He is also member of the Institute international d’ études bancaires, the Board of Directors of The Institute of International Finance (IIF), the Capital Markets Consultative Group of the IMF (CMCG), the Board of Directors of the International Monetary Conference (IMC), the Global Advisory Council of the Conference Board and the International Advisory Committee of the Federal Reserve Bank of New York, among other international fora.

As of July 2006, he is the Chairman of the European Financial Services Round Table (EFR). He is also member of the Institute international d’ études bancaires, the Board of Directors of The Institute of International Finance (IIF), the Capital Markets Consultative Group of the IMF (CMCG), the Board of Directors of the International Monetary Conference (IMC), the Global Advisory Council of the Conference Board and the International Advisory Committee of the Federal Reserve Bank of New York, among other international fora.

In 2006 BBVA outbid Banco Santander Central Hispano, and Bank of America by forming an alliance with China CITIC Bank, one of the largest banks in China by acquiring a stake in the bank and in CITIC International Financial Holdings Limited, China Citic Groups’s main international Arm.

In January of 2011 Prnewswire announced that BBVA and Wells Fargo Bank  join the Ex-IM Bank Medium-Term Delegated Authority Program. The two banks can now expand support and reduce transaction turnaround time for U.S. smallbusiness exporters. These two banks have been approved by the Export-Import Bank of the United States to be eligible lenders under it’s Medium-Term Delegated Authority Program.

In February 2007 BBVA announced a definitive agreement to acquire Compass Bancshares In. based in Birmingham Alabama. The deal was consummated in September 2007.

In August 2009 BBVA Compass acquired the deposits of failed Guaranty Bank of Austin Texas.  The deal gives BBVA Compass a first time presence in California.

All of the above business acquisitions have been approved by the Federal Reserve.

On September 13, 2010 BBVA became an official sponsor of the NBA.

BBVA Compass is quickly becoming a dynamic global banking force.  BBVA’s business practices have caused outrage.

It appears that BBVA as well as City Bank and Wells Fargo have not stopped laundering money and using loop holes in Federal Banking laws to extract money from customer’s accounts and in some cases even defrauding the Government.

In February 2012 The Associated Press reported that Citigroup was ordered to pay 158 Million in a Mortgage Fraud Settlement. The government said that Citi Mortgage had certified 30,000 mortgages for insurance provided by the FHA and submitted many certifications that were “knowingly or recklessly false”

On February 2012 a Federal Lawsuit was filed seeking the recovery of unpaid overtime for Mortgage Banking Officers that worked for BBVA Compass Bank.

BBVA Compass clients who have checking and savings accounts are routinely reporting money missing from their accounts as the result of excessive and unfair overdraft charges by withholding customer deposits, charging interest and overdraft fees on overdraft fees not paid and  creating a banking customer fee ponzi scheme.

shirley of Azle, TX on Feb. 27, 2012

“In 2000, I purchased CDs for my grandchildren (ages 4 to 14). All but 2 had been surrendered. In 2009, the bank notified one child (not me, the holder/custodian) of inactivity on his CD. This prompted me to go into the bank, and check on the CDs. I was told the CDs were active.

I went in again in April 2010, and checked. Again, I was assured they were fine. In August 2011, both kids were notified by the Texas State comptroller, that the CDs had been turned over to the state. As the holder/custodian (plainly stated on the CDs), I was never contacted. The bank has sent me checks for the state’s fee, and the lost interest from the time they were turned over to the state until October. At that time, I requested the status of my remaining CD, and was told it had been cashed in. I argued that was not so, but they insisted. When I went into the bank and closed my account on October 24, 2011, the man helping me asked if I wanted to keep my remaining CD. I was shocked.

Of course I cashed it in. I guess they would have sent that $6300. to the state.

Since my 2 grandchildren are not 18 yet, they cannot get their money from the state, but with lots of leg work and tons of paperwork, I was allowed to apply for the funds.

The state has had the claims for 22 weeks today. I just called to inquire how things were progressing, and was told they had not started on October’s claims. They are still working on August’s claims. Thanks, Compass Bank! Sara will graduate in May. The incompetence of your employees is inexcusable.”

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