Topic: HU: Wells Fargo acct / Coinbase issue. [s]Scam?[/s] (Read 5492 times)

Here's an update:

I was drawing down the balances in my Wells Fargo accounts intending to leave them since they cannot serve my needs and I feel they screwed me.

When I got down to having less than $10k it occurred to me that I am very likely under one of those 'operation chokepoint' type deals where the bank has to supply the Feds with a ton of information about me and it costs them money.

I decided that my best way of getting even is to keep a tiny bit of money in the bank and do little bits of activity.  They won't have many funds of mine to use as 'hot money'.  That is, money to deposit with the central bank and thus be able to create 10x that (or more) in new money to loan out and take interest on.

So, Wells Fargo gets all of the pain of having a 'problem' customer and none of the gain.  I'll switch over to paper bills also which will go direction into the trash.  If anyone can think of other ways to cost them money, lemme know.

Right-O!

Thanks for sharing your story. I've encountered similar strange issues with my cell phone, and also been refused a second simple checking account my bank, where I already have numerous accounts. I did not pursue as you did, but suspected it had something to do with Bitcoin.

Laws are like ivy. The first few that you plant are quite beautiful, but without proper containment, you'll soon be fighting uncontrollable weeds.

Money laundering is defined by dealing with money acquired by illegal means.  Specifically attempting to hide evidence of a crime.  I know with certainty that I am not in this category.  My transactions were large, but I've dealt with fairly sizable sums of money when buying property and such in the past, and so have many others.  In fact it was with some deliberation that I exceeded the $10k threshold on some transactions and I did this to avoid any potential to be accused of 'structuring'.

The banks does not know that I am not laundering money, but the same can be said for literally anyone else.  In my opinion they should be trying to flag suspect actions and my operations would certainly qualify.  The next step would be to validate or invalidate their suspicions.  In my case they will have to find me innocent of any wrongdoing because, again, that is the reality of the situation.

The banks are taking the easy way out and harming innocent participants in the economy in the process.

As for pursuing the case, if this is related to extra-legal harassment from the justice department for the purposes of interfering with things that they, for whatever reason, simply don't like but are to lazy to pass laws against, then I realistically can expect relatively little support from this same justice system.

This goes back to the reason I got involved with Bitcoin in the first place.  Gold is backed by physics, Bitcoin by mathematics, and the USD by law.  The legal system and thus the backing of the USD is failing.  So far my faith in physics and mathematics are proving more well-placed.

Just to play Devills Advocate - looking at it from the banks point of view, how would they have been able to distinguish you from a money launderer ?

 I don't know the size of your transactions (and have no desire to know btw) but in the UK transfers into your account over 15k Euros would have your account flagged and you'd be classed as a "High Value Dealer" under Money Laundering Regs. http://www.hmrc.gov.uk/mlr/getstarted/register/hvd.htm.

   This is aside from the (aggravating) Bitcoin association - or in addition to it at least.

Maybe several different accounts with split sums being transferred might be a way forward.

As for pursuing the case - once the idea (even suspicion of (albeit unfounded)) money laundering is thrown into the debate I reckon you'd be peeing into the wind to be honest.

  Just my two penneth 

Update:

A person from the 'high value risk assessment' office at Wells Fargo got a hold of me ASAP due to the OCC complaint.  He was nice enough and seemed to work with me a bit.

Turns out that Wells Fargo also put a block on my credit card which I've had for over a decade.  It was a signiture card.  They gave no warning of this and I found out just before I was doing some travel when a bill I was trying to pay on-line was rejected.

I complained bitterly about this and the guy from the aformentioned dept called the credit card dept and relayed to me info that they refuse to unblock the visa unless his office reversed the decision about the dedicated account.

Recently I got a mail saying that their decision on the checking account stands.  Also another mail saying that the Visa card will be canceled as well.  Nobody will say anything about the rational for any of these actions.  The credit card wing writes:


(The italics are my addition.)

This text gets my 'attention'.  Now they are explicitly defaming me but will not explain the manner in which I supposedly "unsatisfactorily" handled my account.  Again, the ONLY think I ever used the account for was to receive funds from Coinbase.

I'm sort of weighing whether I should drop things or pursue them further.  A little of it depends on whether I am subject to further financial grief at other institutions.  If so I could reasonably infer that Wells Fargo has engaged in libel as well as defamation.

Here's an interesting article, and I have to wonder if it is a factor in the experience I am having:  http://bitcointaco.com/blog/us-doj-closing-bank-accounts-operation-choke-point/

Yes, I see what you are saying - but I guess the final proof of the pudding is in the eating. It will be interesting to see the eventual outcome. In my experience, no matter the degree of injustice involved in the specific case, those delegated the responsibility/authority to pass a judgement are much more likely to do nothing at all if they can manufacture a (seemingly) plausible excuse for having done so. Its to do with  1) risk/reward ratios   and 2) weak character.


   Having said that I do believe the good will out in the end - I suppose its about having faith in human beings in the end  .

Update:

As mentioned, I contacted my representative.  BTW, this is Peter DeFazio who was out front during the 2008 'bailout' and proposed a tiny tax on trading rather than having the bailout be funded by Joe Sixpack taxpayers.  Needless to say, that proposal didn't get far in congress where most members got their jobs in large part thanks to sponsorship from the financial services industry.  But I digress.

DeFazio's office got back to me quickly and suggested that I file a ticket with 'www.helpwithmybank.gov'.  This I did.

It seems that someone glances over complaints and decides whether to escalate them whereupon one gets a ticket number.  I got one the next morning.

It seems that in my mode, at least, this department (which is associated with the Office of the Comptroller of the Currency) mostly passes the complaint to the bank and the bank then evaluates it and handles things directly with the customer.  I'm currently in the phase of waiting for Wells Fargo to get back in touch with me.

I stopped by Wells Fargo yesterday and gave my personal banker a heads-up about my actions since I had to use her name as a point of contact.  I feel that she has been nothing but responsive and sympathetic to my situation but the problems are well beyond her reach within Wells Fargo's organization.

I almost don't want to provide this information in public least the 'sovereign citizen' dip-shits among us abuse things and try to gum up the works and ruin things for the rest of us.  Given the power of the financial services industry in our government, I find it quite laudable that there even exists a usable system for the masses to try to seek resolution and redress without going broke paying for attorneys and what-not.  In order to be credible in critiquing the failures of our government one really needs to also recognize the things which the government is, or may be, doing right.  IMHO.

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I also hooked up my new bank to Coinbase and did a small test sale to probe for what might be triggered.  So far, so good.  I won't be back on my sales regime until if/when we get up into the $1000+/BTC range most likely.

Update:

Last week I used my representative's on-line form to compose a mail specifically requesting a brief analysis of this situation.  I've heard nothing back yet.

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Last week I chatted with my personal banker at Wells Fargo again.  She called me.  She said that she tried and failed to get any sort of written statement which states either of these:

 - that the closure of my account was related to 'bitcoin'.

 - that further accounts will be closed if I attach them to Coinbase.

though verbal assertions of these things stand.  I do believe that she tried to get the written confirmations I requested.  She was very apologetic and seemed fairly upset.

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Last week I stopped by a smaller more local bank and told them that I was contemplating switching my accounts and all of my money to them, but I wished to talk to a person in some level of authority, and I wished them to analyze Bitcoin, Coinbase, and the use patterns and sums of money I might be putting through the accounts first.

A higher-up called me today.  We had a nice long chat.  Since I basically understand and empathize with the issues the banks are facing I am not very antagonistic and this helps discuss such things.  To make a long story short, it will be hard to guarantee that I won't have problems, and I am probably more likely to have problems at a smaller bank than a big one due to their more limited resources in the compliance department.

The lady I talked to is going to do some more research and get back a hold of me, but I am not hopeful.

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The options I can see open to me now are:

 - play cat-n-mouse by setting up accounts at any bank I can util I run out of banks.

 - find a completely different market where the larger players play (I still plan to sell a few hundred BTC in this batch if the price gets up into the $1000/BTC ballpark again.)

 - explore some off-shore banks.

I don't know anything about the larger more private BTC markets,  I hoped that Coinbase would be a satisfactory solution for me since I am completely clean and can prove it.  For a while it seemed a good solution

I also don't know the last thing about off-shore banks or if they would solve my problem.  Since I never had any plan or need to hide fiat or leverage them for 'tax strategies' I've no experience with them.

If anyone has experience with either of these, I would love to hear it.

Update:  My interaction with Coinbase.

Preface:  I told Coinbase that I would be thoughtful about public descriptions of our interaction if we cooperated.  We didn't really end up cooperating in a meaningful way, though I'll use some digression anyway since there is no reason not to.  The following condensation is effectively accurate and hopefully amusing.

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Me:  I got this problem with Wells Fargo and Coinbase is implicated by name.

CB:  Can we see the Wells Fargo letter?

Me: 

CB:  Yup.  Looks like you've got a problem.  Sucks to be you.  BTW, where'd ya get them bitcoins?

Me:  Tradehill.  BTW, do you have a problem with me?

CB:

CB:  Not at this time, but we'll let you know if we do.

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I don't blame Coinbase for not wanting to get involved with any kerfuffle between me and Wells Fargo.  Doing so could jeopardize their operations and integration with the mainstream financial system is key to their success.  It's just business.

My next step is to see if I can solicit any interest on the part of my elected representatives.  I've funded our governments significantly with taxes which are a direct result of successful speculation on Bitcoin.  Bitcoin has been analyzed in congress and guidance from the IRS has been issued so, in short, it's perfectly legal as are all of my activities associated with it (and everything else.)

Singling out a person for different treatment is, by definition, discrimination.  There is a limit to how much the banking system can engage in discrimination, and this makes sense because they have the legal authority to operate in public.  They (e.g., Wells Fargo) realize a competitive advantage because the government stops other would-be competition from competing.  This is the basis for my continued exploration.  That is, to find out if the discrimination I've experienced is or is not acceptable under our political system.

I decided to deal with my land-line phone problem again.  This time I went the 'report a problem' route.  After describing the problem the rep took about 3.5 minutes to get back to me and ask if I had a answering machine.  Nope.  After another 5 minutes he got back again and said he'd file a ticket and it should be fixed looked at by noon tomorrow.

I've worked with and on telecommunications software in a previous life.  By law in most (and probably all) nations, such software needs to allow tapping facilities known in the industry as 'lawful intercept'.

I know that it can happen that a low level tech can use these facilities for fun.  Whether for fun and profit, I've no knowedge of, but I'd be surprised if such things didn't happen from time to time.

I also know a little bit about how telecommunications software is typically requisitioned and designed.  It is rarely developed as a unified piece, and rarely are all parts and pieces of a system developed by the same company.  Whoever developed the answering service part of my vendor's solution is very unlikely to be the same people who developed the data stream components.  They are vastly different problems.  Meeting the 'lawful intercept' requirements is basically a triviality from the standpoint of system design in both systems but a genuinely difficult problem is create an integrated lawful intercept solution due to how the systems are commissioned.  Also, it is probably a rarely used sub-system which doesn't warrant the expenditure of high levels of QA and usability.

Anyway, these are some of the reasons why having the types of phone problems I'm having (at the same time as other problems) perks up my eyebrows.  It is certainly not proof of anything, but it is an observation that should not be completely ignored.

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For fun, while I'm on the topic, it would be interesting to hypothesis a little about the mass data collections which have been in the news.

These would actually be quite different than the 'lawful intercept' stuff.  Indeed, the 'lawful intercept' functions of most telecommunications software would in many cases probably not even be usable for bulk collection for system design reasons.  This data would likely be tapped at a different junction, and the recipient (the NSA) would not require any special organization via the vendor.  They'll do that themselves and are much more qualified and better able anyway.

What we can glean from Snowden's docs (and anticipate using deductive reasoning even before that) is that higher-ups in various agencies knew about the NSA data and wanted it to help with their own charters.  One can imagine a fair amount of power struggles.  The NSA (quite legitimately) didn't want to give it up since doing so will compromise their own methods.

Ultimately some of the NSA data did get fed into other organizations such as the DEA, but through a separate entity.  More than a little care was taken to 'launder' the data through what is termed 'parallel construction'.  That is, making up other stories about how an investigation came about.

One of the big dangers that this bulk collection is that it leads to (and has already led to) is that for law enforcement use, the system is wholly incompatible with our legal system here in the U.S. (and relatively few other places.)  By design, a defendant is supposed to have access to evidence against him/her so that they can analyze it for exculpatory material.  Secret data collections and collation of secret dossiers on individuals is simply not compatible.

So here, finally, is an update.

I played phone tag all week trying to get a hold of my personal banker.  Someone else scheduled an appointment, but their calendar doubled my time-slot and the lady was already with another customer but she took a couple of minutes for me anyway.

My banker could find no records of problems with the account in question (I have multiple accounts.)  She had asked me to bring in the mail I received.  I did, and she looked at it for a while then went to chat with the bank manager privately.

When she came back she said 'it is bitcoin related.'  She clearly wanted to say more but could not.  This was either because she didn't know any more or there was bank policy stopping her from doing so, or there is a gag order on the bank itself.  I, of course, have no way to know.  I have a good relationship with my banker and was completely up-front with her about what I was doing vis-a-vis Bitcoin.  I even predicted that the account could have problems which she thought unlikely.  She clearly felt terrible about things.

My banker told me that it was not going to work to just set up another account and link it to Coinbase.  It will be shut down.  I told her that at this point Bitcoin has been analyzed in congressional hearings and guidance has been issued by the IRS so it is clearly 'legal'.  Further, Coinbase is a registered business who complies with all of their obligations.  So, if it is Wells Fargo policy to dis-allow accounts to be linked to Coinbase I would like to have it in writing.  She said that she understood this fully and promised to try to produce such a document.

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Several more pieces of potentially interesting news:

I got a weird call from 'Gallop' claiming that Wells Fargo had hired them to do customer satisfaction survey follow-up and wished to know about my visit on a particular day (the day before the call.)  I had not visited the bank on that day so I told the guy (not an Indian) that I could not participate since it was meaningless.  He thanked me and hung up.  When I questioned the banker about that I was told that Wells Fargo did indeed hire Gallop to do such surveys.

Part of the reason I spent three days trying unsuccessfully to set up an appointment with my banker is that my land-line is all fucked up.  I get a stutter dial-tone, but there are no messages.  I called the phone company last night asking them to re-set things.  After a loooong wait, the service person came back and said that it would be re-set and it could take 2 to 4 hours.  24 hours later I continue to have the same problem.

When I went into town today I found that all of the settings on my cell phone have been re-set.  I like outside of cell range so my cell phone only works when I go to town.

If I were a paranoid type guy I would be convinced that 'they' are out to get me.  I'm not, but it remains a valid hypothesis in my mind that I've actually been tagged for enhanced surveillance of some sort.  I could even understand this.  I've done multiple hundred large through BTC and the account in question this year.  A certain fraction of people doing likewise probably have the ability due to either having stolen BTC or some other form of crime.  I have not.  The U.S. government has on me (and everyone else) all my phone calls, movements, e-mails, bio-metric data, pictures of my penis, and God knows what else.  If their algorithms have flagged me, they should put a human on the case for a few minutes and I'd be un-flagged if they have the Tradehill-I data (which I assume they do, and if they do not, they should ask me and I'd give it to them.)

An alternate hypothesis are that I am targeted by criminals who are somewhat technically competent.  I've always assumed that was a possibility at some point and have made significant arrangements to ensure that such entities could at best achieve little or nothing for their efforts.

The most likely hypothesis is that it's all just coincidence and bad luck.

Called my banker this morning.  She and I talk about Bitcoin quite a bit and she knows the exact details of what I am doing.  (I've got a PMA account with more personalized service.)  She didn't initially seem to think that it was likely a scam, but said she'd look into it.  I just got a message saying that she could find nothing in any records and wishes me to bring the mail in to town for her to have a look at it.  It's a 30 minute drive and I go to town are rarely as possible.  I just followed up but she's out to lunch.

I'll follow up with more details when I know them.

Have you asked Wells Fargo about it yet?

 - edit: Updates in-lined

Just a Heads-up:

I just received a mail to my non-mailing address which purports to be from Wells Fargo.  I normally receive no mail to anything but my P.O. Box.  Fortunately the mail delivery person knows that I don't check my mailbox since mail theft is a problem and delivered the mail to my sister's place so I received it.  All other correspondence from Wells Fargo goes to my mailing address.

The mail claims that Wells Fargo is closing down a particular account of mine in association with "the Bank's responsibility to oversee and manage risks in its banking operations."

I logged into my on-line banking and see no such indication of a notice.  I looked up the phone number which was provided 1-888-231-0757 and can see no indication of it being a Wells Fargo number.  The postmark was from zip 28269.

The account in question was set up for the expressed purpose of hooking up to Coinbase, and that is all that I have ever done with it.  Whenever I sell BTC, I immediately transfer the money out to my regular checking account and keep the balance in that account low.

I'll get a hold of my personal banker on Monday and find out if the mail is legit.  In the mean time I thought I'd send out a warning and see if anyone else has received such a mail.

Edit:  BTW, the letter looks official enough, but it had some hand applied scotch tape holding the envelope closed with the glue never have been sealed.  The ink also slightly transferred to the facing area (single tri-folded letter sized sheet.)