Financial Mines

The Wall Street Journal has a good piece on Wall Street Banks exiting space in the city to save some dough.

It’s not a good news for the region’s financial sector or landlords in New York, but it does beg the question of whether the sweet deal Gov. Malloy handed UBS in Stamford was necessary. In August, the Gov. and Swiss banking giant UBS signed a deal to provide UBS $20 million to keep 2,000 employees in the Connecticut city through 2017. That’s the year UBS’ lease on its building runs out, by the way.

At the time, UBS was reportedly looking for space befitting a world financier in New York City and all indications from employees and a variety of other sources indicated the bank was as good as gone.

Now comes this report that in the face of more layoffs and drive to make profits, major Wall Street banks are exiting NYC space.

You can argue it both ways of course… Rents might become even more cheap in the City and thus open up space for UBS, so the deal was good, or you can call the deal a waste because in the end, the Stamford rent is a money saver for UBS and a corporate executive who increases rental costs in this environment might not be well received by his board and investors…

Her’es the WSJ article, if you’re a subscriber take a look at the whole thing, if not the blurb gives you an idea of what’s going on.

http://on.wsj.com/yjg8mY

Our Fairfield Reporter Genevieve Reilly reported this week that a local real estate developer surpassed General Electric Co. as the largest taxpayer in town.

1. Kleban Holding Co., real estate developer, $72,986,557

2. General Electric, corporate headquarters, $71,443,609

For the full story, visit

http://bit.ly/yjaDLn

We’re for a strong market here at FinMines, but even our poetic heart can’t out bluff reality:

A pretty smart lawyer who advises fiduciaries on obligations, remarked last month during a conference, that the S&P 500 is at about the same level it was in 2001.

We at FinMines finally got around to checking and here is the depressing closing numbers more than a decade apart:

Feb. 5, 2001, S&P 500 1,354.41

Feb. 3 2012 S&P 500 1,345.

It’s enough to make a man or woman, …

Howl

I saw the best portfolios of a generation destroyed by madness

Traders dragging themselves down Wall St. wondering where to find a fix

Silver haired investors, gazing, bleary-eyed, at retirement visions chewed up by the economic dynamo

Who sit in barren flats dreaming of Caribbean jazz filled days and left wishing on stars like children for better returns

…..

With apologies to Allen Ginsberg and readers. I’ll spare you a full parody and besides, Monday’s a new day.

On Jan. 27, the U.S. Attorney Southern District of New York announced the arrest of three Chase Bank employees involved in an alleged scheme to fraudulent cash tax refund checks…

Here’s the USA’s release about the employees of the bank the State of Connecticut just awarded a contract to to provide debit card tax refunds.

Three Chase Bank Employees Allegedly Received Tens of Thousands of Dollars in Bribes to
Help Cash Fraudulent Refund Checks
Preet Bharara, the United States Attorney for the Southern District of New York, and
Victor Lessoff, the Acting Special Agent-in-Charge of the New York Field Office of the Internal
Revenue Service, Criminal Investigation Division (“IRS-CI”), announced charges today against
three employees of J.P Morgan Chase Bank (“Chase”) and another individual for participating in
tax refund schemes that used the identities of Puerto Rican citizens to obtain fraudulent tax
returns. KATHERINE TORRES, a Chase branch manager, ROSALIND SMITH, a Chase
employee, and CARLOS DELEON are charged in one scheme that defrauded the Internal
Revenue Service (“IRS”) and New York State out of more than $3 million. JUDITH
FULGENCIO, a personal banker at Chase, is charged in a separate scheme that defrauded the
IRS and New York State out of more than $1.8 million. TORRES and DELEON were arrested
this morning, and SMITH surrendered to authorities. They will be presented and arraigned in
Magistrate Court later today. FULGENCIO will surrender on Monday and be presented and
arraigned at that time.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, these bank employees were up
for sale – willing to help defraud the IRS out of millions in exchange for tens of thousands of
dollars under the table. These types of fraud schemes deprive the Government of vital revenue,
and we are committed to bringing the perpetrators to justice.”
IRS CI Acting Special Agent-in-Charge Victor Lessoff said: “IRS Criminal Investigation
has made investigating identity theft and refund fraud a top priority. Filing fraudulent tax returns
in the names of other individuals may result in significant harm to those individuals whose
identities were stolen, as well as a monetary loss against the U.S. Treasury. Our Agency will
respond to this type activity using every legal resource at our disposal. Let these actions serve as
a warning to those who are considering similar conduct.”
The following allegations are based on the Indictments, which were unsealed today in
Manhattan federal court:
Overview of the Schemes
Although operated separately, the two schemes worked in similar fashion. Participants
would unlawfully obtain identification information, including names, dates of birth, and social
security numbers, of Puerto Rican citizens. These Puerto Rican identities would then be used to
file fraudulent tax returns, which claimed large refunds from New York State and the federal
government. Participants in the scheme had the resulting tax refund checks directed to addresses
they controlled, or along specific mail routes assigned to a U.S. Postal Service employee who
had been bribed to pull the checks from the mail. The checks were then cashed at a Chase bank
branch at which one or more Chase employees had been bribed to facilitate the transactions.
U.S. v. Katherine Torres, et al.
In one scheme, TORRES, SMITH, and DELEON conspired to cash, and share in the
proceeds of, more than $3 million in fraudulently-issued tax refund checks. TORRES and
SMITH, who both worked at a Chase branch on University Avenue in the Bronx, were paid tens
of thousands of dollars in bribes. In exchange, they directed tellers whom they supervised to
cash the fraudulent tax refund checks in a manner that deliberately avoided the filing of Currency
Transaction Reports (“CTRs”) and concealed the fact that DELEON cashed tens of thousands of
dollars in fraudulent tax refund checks on a near daily basis between 2006 and June 2007.
TORRES and SMITH offered thousands of dollars in cash bribes to tellers who followed their
instructions. The case is assigned to U.S. District Judge Denise Cote.
U.S. v. Judith Fulgencio
In another scheme, FULGENCIO, who worked at a Chase branch at Yankee Stadium,
conspired to cash, and share in the proceeds of, more than $1.8 million in fraudulently-issued tax
refund checks. In exchange, she was paid tens of thousands of dollars in bribes. FULGENCIO
directed tellers whom she supervised to cash the fraudulent tax refund checks in a manner that
deliberately avoided the filing of CTRs and concealed the fact that a co-conspirator cashed tens
of thousands of dollars in fraudulent tax refund checks on a regular basis between 2006 and June
2007. FULGENCIO offered thousands of dollars in cash bribes to tellers who followed her
instructions. The case is assigned to U.S. District Judge Robert P. Patterson.
* * *
TORRES, 52, SMITH, 31, and FULGENCIO, 32, all of the Bronx, New York, are each
charged with one count of conspiracy, one count of theft of government funds and two counts of
bank bribery. They each face a maximum sentence of 75 years of in prison. DELEON, 44, of
New Rochelle, New York is charged with one count of conspiracy, one count of theft of
government funds, and one count of bank bribery. He faces a maximum sentence of 45 years of
in prison.
Mr. Bharara praised the outstanding investigative work of the IRS-CI. He also thanked
the U.S. Postal Inspection Service (“USPIS”), USPIS Office of Inspector General, the Federal
Bureau of Investigation, and the New York State Division of Taxation and Finance for their
assistance in the investigation.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorney
Howard Master is in charge of the prosecutions.
The charges and allegations contained in the Indictments are merely accusations, and the
defendants are presumed innocent unless and until proven guilty.
12-036 ###

Whoops or just kidding? Perhaps that’s the catchy name Congress could use for a new bill trying to head off $500 billion in Defense cuts over the next decade that were part of that unseemly standoff last year over the debt ceiling and budget.

U.S. Sen John McCain, R-Ariz., and a group of other senators is offering up a new bill to delay planned cuts to military spending that will automatically kick in because a special committee failed to agree on how to trim $1.2 trillion from the U.S. budget.

The deal was cut last year when Republicans and Democrats squared off over whether to raise the debt ceiling to allow the U.S. to continue borrowing. While there was hyperbole on both sides, the ultimate compromise put the nation in this situation.

Namely, right as the economy appears to be generating job growth, more than 200,000 last month according to Labor, the nation’s defense industry must prepare for massive cuts which will ultimately put a lot of people out of work.

McCain and supporters of rolling back the cuts, say this would gut national defense.

So far, the official line from the Obama Administration can be summed up as –  no backsies.

And Obama received support from 100 members of Congress, including U.S. Rep. Jim Himes, Conn.-4.

In case you missed it, the Senate actually passed a measure to hold its members and staff in the executive branch to the same standards, well, to which you and I are held.
It’ll be interesting to watch the debate in the House and one wonders if this will discourage people from running for office; isn’t investing how one makes the real money in Congress? And, will it affect the Presidential race? Who are the candidates’ advisors and what will this mean for potential administrations and the current one?
So many questions to answer.

Well, it appears the Department of Revenue Services has heard some concerns about a unilateral decision to stop issuing tax refund checks in favor of Chase Bank issued debit cards.

On Thursday, the department re-issued “10 facts people need to know about the new policy for personal income tax refunds.” (Does this mean businesses are still getting checks?)

Here are the DRS’ facts:

Taxpayers can:

• Have their refund direct deposited into their bank account free of charge – this is the fastest method;
• Be confident  in knowing a refund debit card can only be  accessed by a secure activation process;
• Cash in the debit card at any bank or credit union affiliated with Visa by asking a teller for a no fee cash advance up to the full balance on the card. If desired, the cash can then be deposited into one or more bank accounts;
• Get cash back on any debit card purchase with no fee;
• Make free retail purchases anywhere Visa is accepted;
• Use a Chase or People’s Bank ATM for no fee withdrawals of up to $800 per day;
• Use at a non-Chase or non-People’s Bank ATM for up to three no fee withdrawals (other bank fees may apply);
• Transfer the card balance to a Chase account free of charge;
• Transfer the card balance to a non-Chase account for a $0.75 transaction fee(other bank fees may apply);
• Pay bills online without a fee.

The reason the state is doing this is at least two-fold — get more people to opt for direct deposit and thus save money and to help those who don’t have banks avoid check cashing fees (as high as 10 percent, according to the DRS.)

But one savvy entrepreneur, Michael McClure, CEO of Muddler.com, noted in a conversation Thursday, issuing debit cards could also be a way to spark consumer spending.

It is an interesting idea: Consider the list of rules and fees above for using the card versus what it takes to convert a check to money.

If you have a bank account, you sign the back of the check and deposit it. Usually, you can access up to $500 of the cash that day, with the rest available when the check from the government clears.

If you don’t have a bank account, then you go to a check cashing place, and they do it for a fee.

So, yeah, FinMines believes people who get the cards will be more likely to use them and not just have their banks deposit the money.

And, once again the DRS raised the issue of the needs of the unbanked. With this amount of concern, maybe someone should investigate the matter and why Connecticut has such a big population of people without accounts.

Are the banks creating an environment that’s hostile to certain segments of the population? Are they catering to a select demographic, namely the ubber wealthy, who by the way, can still get a check if their return is above $10k.

Anyway, other concerns we at FinMines have heard:

What happens if you have a few dollars left on the card after using it? Does Chase get that money if you don’t use it right away? Why can’t you just keep the unused balance on the card until next year? Will the state issue new refund cards every year, or are you supposed to keep this one?

So, DebitCard Gate continues.

The State Labor Department has extended the hours of its unemployment insurance processing center to handle a heavy volume in calls — see notice below.

Historically, unemployment claims are usually peak in January following the holiday hiring season. There is some nervousness about the job market, which still appears to be on thin ice for a recovery.

And Challenger Gray & Christmas reported Thursday that announced private sector layoffs totaled 53,486 for January, the largest job cut number since September, when employers planned 115,730 cuts.

Challenger, Gray & Christmas, an outplacement firm, noted the January 2012 number was also 39 percent higher than a year ago. However, the average number of layoffs for the month of January during nearly two decades of data, is 101,084, the firm reported.

Here’s the Conn. DOL notice:

February 2, 2012: Due to the heavy volume of callers filing unemployment claims, mainly as the result of seasonal shutdowns, the agency’s TeleBenefits Call Centers are open extended hours Mondays through Thursdays (7:30 a.m. to 6 p.m.) and regular hours on Fridays. Please note: Call Centers will close at 4:30 p.m. today, February 2, 2012 for equipment maintenance. Extended hours will resume Monday, February 6.