George Stephanopoulos interviews Peter Schweizer, author of Clinton Cash book

Accountants CPA Hartford Connecticut LLC:  This is a rush transcript for April 26, 2015. It may contain errors.

GEORGE STEPHANOPOULOS, HOST: And the author of “Clinton Clash,” Peter Schweizer, joins us now.

Thank you for joining us this morning, Peter.

You know, I was looking at the book jacket right here and you say that, here in the book jacket that your reporting raises serious and alarming questions about judgment of possible indebtedness to an array of foreign interests and ultimately, a fitness for high public office.

So how does your reporting show that Hillary Clinton may be unfit for the presidency?

PETER SCHWEIZER, AUTHOR, “CLINTON CLASH”: Well, I think the real question here, George, is when you ever have an issue of the flow of funds to political candidates, whether that’s to their campaigns, whether that’s to private foundations, whether that’s to their spouse, is there evidence of a pattern of — of favorable decisions being made for those individuals?

And I think the — the point that we make in the book is that there is a troubling pattern.

There are dozens of examples of that occurring.

Some people, I think particularly the Clinton camp, would say that these are all coincidence. I don’t think, when you’re talking about 12 instances, you’re talking coincidence. I think you’re talking trend.

STEPHANOPOULOS: But you take it pretty far. You write that, “The pattern of behavior is troubling enough to warrant further investigation by law enforcement (INAUDIBLE).”..


STEPHANOPOULOS: Do you have any evidence that a crime may have been committed?

SCHWEIZER: Well, I think it’s — if you look at a couple of recent examples. For example, Governor McConnell down in Virginia, or you look at Senator Menendez, in these cases, you didn’t have evidence of a quid pro quo. What you had was funds flowing to elected officials, some of them gifts, some of them campaign contributions and actions that were being taken by those public officials that seemed to benefit the contributors.

Certainly, I think it warrants investigation. What that investigation will reveal, we’ll see.

STEPHANOPOULOS: But a criminal investigation?

SCHWEIZER: Well, we’ll see. I mean that’s what the Governor McConnell has faced and that’s what Menendez has faced.


SCHWEIZER: And I think the evidence here is far more widespread in terms of repeated action than there were in those two instances.

STEPHANOPOULOS: As you know, the Clinton campaign says you haven’t produced a shred of evidence that there was any official action as secretary that — that supported the interests of donors.


STEPHANOPOULOS: We’ve done investigative work here at ABC News, found no proof of any kind of direct action. And an independent government ethics expert, Bill Allison, of the Sunline Foundation (ph), wrote this. He said, “There’s no smoking gun, no evidence that she changed the policy based on donations to the foundation.”

No smoking gun.

Is there a smoking gun?

SCHWEIZER: Yes. The smoking gun is in the pattern of behavior. And here’s the analogy I would give you. It’s a little bit like insider trading. I wrote a book on Congressional insider trading a couple of years ago and talked with prosecutors.

Most people that engage in criminal insider trading don’t send an e-mail that says I’ve got inside information, buy this stock.

The way they look at it, they look at a pattern of stock trades. If the person has access to that information and then they do a series of well-timed trades. That warrants investigation.

I think the same thing applies here.

By the way, what’s important to note is it was confirmed on Thursday, both by “The New York Times” and “The Wall Street Journal,” that there are multi-million dollar, non-disclosed donations that were made to the Clinton Foundation that were never disclosed by the Clintons.

This is a direct breach of an agreement they suggested with the White House.

STEPHANOPOULOS: That — that is an issue for them, but it’s not a criminal — it’s nothing that would warrant a cmii.

So let’s look at some of the specifics behind your pattern.


STEPHANOPOULOS: A lot of focus on the sale of a company, Uranium One, to a — to a Russian company. Of course, Frank Drisdra (ph), who had committed, what, a $130 million, a pledge to the Clinton Foundation back in 2006, had had an interest in this company.

But he actually sold it.

SCHWEIZER: Well, he sold his stock, but his firm, Endeavor Financial, continued to do finance deals well after that. And the individuals involved in the book, as you probably read, there are nine — count them, nine major contributors to the Clinton Foundation who were involved in that nuclear deal.

The two individuals who were the financial advisers on the deal of the sale to the Russians, they’re both major Clinton Foundation supporters. The chairman of that Foundation, Ian Telfer, whose donations were not disclosed, campaign — and sorry, Clinton Foundation contributor. And there are others.

So this is not just about Frank Giustra. This is multiple layers (INAUDIBLE)…

STEPHANOPOULOS: OK, but you didn’t disclose in your book that he had sold the interest.


STEPHANOPOULOS: Beyond that, this deal was approved by a — a board of the government called the CFIUS Board.


STEPHANOPOULOS: This actually chaired by the secretary of the Treasury…


STEPHANOPOULOS: — not the secretary of State.


STEPHANOPOULOS: Eight other agencies on board, the secretary of State, Homeland Security, Defense, Commerce…


STEPHANOPOULOS: — Energy, the Nuclear Regulatory Commission…


STEPHANOPOULOS: — signed off on it. And even though the State Department was one of nine agencies to sign off on it, there’s no evidence at all that Hillary Clinton got directly involved in this decision.

SCHWEIZER: Well, I think it warrants further investigation. And there’s a couple of things that need to be clarified.

Number one, she was one vote — or the State Department was one vote on CFIUS. But any agency has veto power. So it needs to be unanimous. So they had to support this agreement.

The second thing that I would say is that in the midst of all of this, Hillary Clinton was in charge of the Russian reset. She was in charge of — in — of the A123 nuclear agreements with the Russians. She was the one that was meeting with Lavrov. There were four senior congressmen on national security issues that raised concerns about this issue…

STEPHANOPOULOS: But wait a second. There were nine different agencies…


STEPHANOPOULOS: — who approved it.

Doesn’t that suggest that that was because there was no national security concern, not because of some nefarious influence by Hillary Clinton?

SCHWEIZER: But — but look at the nine individuals that were on the CFIUS committee, the nine agencies represented.

Who was, by far, the most hawkish on CFIUS issues in the past?

Hillary Clinton. She was big on rejecting the Dubai ports deal. She was big on other issues. She sponsored legislation when she was in the Senate to straighten CFIUS.

This was a signature issue for her and this is totally out of character…

STEPHANOPOULOS: But the assistant secretary who sat — the assistant secretary of State who sat on the committee said she never intervened on any CFIUS issue at all.

SCHWEIZER: Well, I think that deserves further scrutiny. I would question that.

To argue that (INAUDIBLE)…

STEPHANOPOULOS: But based on what?

Based on what?

SCHWEIZER: Well, I think based on her (INAUDIBLE)…

STEPHANOPOULOS: Do you have any evidence that she actually intervened in this issue?

SCHWEIZER: No, we don’t have direct evidence. But it warrants further investigation because, again, George, this is part of the broader pattern. You either have to come to the conclusion that these are all coincidences or something else is afoot.

STEPHANOPOULOS: And that — that is that — the Clintons do say it’s a coincidence. As they say, you have produced no evidence. And I still haven’t heard any direct evidence and you just said you had no evidence that she intervened here.

But I do want to ask a broader question.

It’s been reported that you — you briefed several Republicans on the Senate Foreign Relations Committee, including the chairman, Bob Corker.

Did you offer any briefings for Democrats?

SCHWEIZER: No, but I’d be glad to give them before the book is released. This was a — a friend that asked me. He thought it would be a good idea to talk to these individuals. This was the committee that confirmed her.

And I was glad to meet with them. They did not get copies of the book. They did not get any material. It was simply a verbal briefing.

And I’d be glad to brief any Democrats before May 5th, when the book comes out.

STEPHANOPOULOS: As you know, the Democrats have said this is — this is an indication of your partisan interest. They say…


STEPHANOPOULOS: — you used to work for President — President Bush as a speechwriter. You’re funded by the Koch brothers.

How do you respond to that?

SCHWEIZER: Well, George, what did I do when this book was completed?

I went to the investigative unit at “The New York Times,” the investigative unit here at ABC. I went to the investigative unit at “The Washington Post.” And I shared with them my findings, OK. These are not cupcakes. These are serious researchers and investigators.

And they are confirming what I’ve reported. So people can look at the facts and…

STEPHANOPOULOS: They haven’t come — they haven’t confirmed any evidence of any crime.

SCHWEIZER: Well, but — but it’s not up to an author to prove crime. I mean do you think that when people first started looking at Governor McConnell or they started looking at Menendez, that they immediately had evidence?

You need subpoena power. You need access to records and information. You need access to e-mails.

There’s all sorts of things that you can do. You can’t leave it up to an author to say that an author has to prove a criminal case.

STEPHANOPOULOS: Finally, Bloomberg News is reporting that you’re going to be looking into Jeb Bush’s business dealings, as well.

Is that true?

What have you found?

Where and when will you publish?

SCHWEIZER: We’ve been working on it for about four months. We’ve been looking at land deals. We’ve been looking at an airport deal. We’ve been looking at some financial transactions involving hedge funds based out of the UK.

We have already reached out to several media outlets and we’re going to adopt a similar model that we have here, which is to share that information with investigative journalists at established news outlets, share with them that information.

And I think that people will find it very, very interesting and compelling.

Peter Schweizer, thanks very much.

STEPHANOPOULOS: Thanks for having me, George.

Accountants CPA Hartford Connecticut LLC:  Please be advised that Peter Schweizer advised Sarah Palin on foreign policy, while George Stephanopoulos was communications director for the 1992 U.S. presidential campaign of Bill Clinton, and subsequently became Clinton’s White House Communications Director then Senior Advisor for Policy and Strategy.

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Hillary Faces Questions About Cash Donations to Clinton Foundation

Accountants CPA Hartford Connecticut LLC: This transcript may contain errors.

David Muir:  Hillary Clinton, the former secretary of state, now being summoned to testify on Benghazi before a House committee, not once, but twice. And Mrs. Clinton tonight facing something else, as well. A firestorm as questions mount about cash donations to the Clinton Foundation and from whom.

ABC’s Cecelia Vega, reporter: Hillary Clinton tonight taking the stage to roaring applause.

Hillary Clinton:  “I wanted to be here regardless of what else I was doing.”

Cecelia Vega: But today, the spotlight right here on the Clinton Foundation. Report after report questioning foreign donations it accepted while Clinton was Secretary of State. “The New York Times” reporting that as Clinton’s state department was signing off on the sale of one of America’s largest uranium mines to Russia, the mine’s chairman used his family’s charity to donate more than $2 million to the Clinton Foundation. And despite promises of transparency, those donations never disclosed. …

Cecelia Vega: On the campaign trail, we asked Clinton about the allegations. Did foreign entities receive any special treatment for making my kind of donations to the foundation or your husband?

Hillary Clinton: “The Republicans seem to be talking only about me. I don’t know what they’d talk about if I weren’t in the race.”

Cecelia Vega: Clinton’s camp now calling the claims of undue influence totally baseless and partisan conspiracy theories. But daughter Chelsea today promising even more transparency.

Chelsea Clinton:  “We will be even more transparent.”

David Muir: You can see Chelsea Clinton coming to the defense of her mother, but she also said, you won’t see much of me during the campaign, because I’m a new mom.

Cecelia Vega: She’s a huge asset to this campaign and the campaign staff knows that the donation allegations are not going away any time soon. I would be shocked if we don’t see Chelsea playing a big role for 2016. But look, when she’s out there, and the same for the rest of the Clinton family, as we saw today, they are all going to be facing tough questions, David.

David Muir:  These questions aren’t going away.  Cecilia, thank you

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Berlin Sanders asks what is Hillary Clinton campaigning on

Accountants CPA Hartford Connecticut LLC:  Good question.

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Intuit’s effort to stop tax fraud under scrutiny – who should be blamed for fraudsters using Turbotax to seal returns

Accountants CPA Hartford Connecticut LLC:  This transcript may contain errors.

The Willis Report:  And tonight’s stunning accusation against Intuit, the maker of Turbotax, the popular tax preparation software.  Two whistleblowers claim that Intuit knew that criminals used its tax software to file fraudulent returns and allowed that to happen.  And that the company is making money off the fraud.

Now Intuit for its part denies the accusations and says that the company is committed to fighting tax fraud.  One of the whistleblowers joins me now:  Shane McDougall.  He used to work in Intuit as a principal security engineer.  Also joining me is Adam Levin, founder of Identity Theft 911.  Welcome to you both.

Shane, these allegations are surprising, astonishing.  Tell us who is to blame for people having their refunds stolen when they use Intuit software.

Shane McDougall:  Ultimately the hackers are to blame, but Intuit and I am going to insert other industry leaders are to blame.  Intuit knew that fraud was happening, and they deliberately rolled back the protections, rolled back the alerting of the IRS, so that more fraudulent returns would get through that they could book as revenue.

And this way, returns that made it through but then the nonpayment of the refund transfer was … sent back by the IRS–they didn’t pay it in full–Intuit writes that off as bad debt.  So they get it coming and going.




Conference call to one of the executives of Intuit, Mike Lyons, Intuit Deputy General Counsel:  “The fraudsters are going to choose whatever they are going to choose while we are all trying to solve the uber problem of having the IRS be extremely good at noticing a fraudulent return no matter where it comes from….We want the IRS good enough to notice the abstract patterns and shut it down at the source.  Not based on whether any one particular vendor built the better mousetrap than the other.”

Willis:  Adam, you look at this all the time.  The IRS, of course, is in charge of making sure that tax returns are true, and Intuit, for its part, says it’s not our job to monitor this.  What’s your response?

Adam Levin:  I think it’s everybody’s job.  Every time any corporation doesn’t properly secure personal identifying information for people, any time that any corporation is really part of a problem, whether it created it or not, we’re in this together.  Without collaboration, cooperation, communication, without sharing threat assessment information, we’re never going to get a handle on this.

And one last thing on this, combine that with the fact that because of sequestration, the IRS has actually been cut back, which forced it to cut back its enforcement activities.

Willis:  That’s their excuse, that they don’t have enough money to do what they need to do.


…Chart “Total Turbotax customer growth”.  What you see in this chart is an incredible boom in what’s called multi filer customer growth.  That’s really the suspicious filer out there.  You see that grow over time.  Why did that happen to Turbotax?  Is it just because they are the biggest guy on the block or were they really doing something that courted that business?

Shane McDougall:  If you listen to the rest of that tape, you’ll literally hear the deputy counsel and also the director of the company talking about how they had cracked down on fraud, they saw their revenue drop, the amount of tax fraud reported to the IRS did not go down, so they said, “Well, you know, all we did was the tax fraud went somewhere else.”

And the reality is they did have the ability to cut back on fraud:   in fact, they did, and they saw the fraud go elsewhere.   So what they did was roll back the alerting of the IRS and literally they rolled back the protections, the things that were shutting fraud down.  They literally say in that tape that fraud fell off a cliff.  It can’t be any clearer than that.  And the very fact that they had stopped the fraud, then allowed it again, to me makes them accessories before the fact.

Willis:  …There’s a lot of interest in this story. …a lot of people are investigating this.


Turbotax is huge:  29 million customers last year.  If there’s going to be fraud in the system, it is going to be right through Turbotax because it’s so big.


The proportion of suspicious customers who successfully filed a tax return:  in 2010, 900,000.  In 2012, it jumps to 2.5 million.  What does that tell you, Adam?

Adam:  That tells me that the filtering systems are not filtering.  And as was said, when they see suspicious activity–and they see, for instance, multiple people using the same social security number–what does someone have to do?  Run a billboard in front of you to get you to do something about it?

Willis:  Is it that hard to track down?  Are you telling me it should be easy to see?

Adam:  It should be easier to see than apparently it is.  There’s no excuse for this.  That we all have to toughen up, we have to tighten up:  states, the IRS, the tax preparers, and the self tax preparation organizations like Turbotax.


Intuit Statement to FBN from Julie Miller at Intuit:  “…Allegations from former employees are without merit filled with inaccuracies and rely on a complete misunderstanding of the realities of Intuit’s business.”

Shane:  That graph that you showed earlier was from a planning document that went all the way up to the CEO.  And if you look at the very last chart, they not only knew how much fraud happened in the past, if you compare the numbers in that chart to what the actual report to the SEC, the numbers align perfectly.

And in that final bar, that final bar of the chart, they actually were saying how much fraud that they are going to cook in.  And they were saying one to one-and-one-half million highly suspicious filings.  That means, when we say highly suspicious, it’s fraud.  And they were actually baking those into the numbers.

Willis:  Shane, you say they’re baking it into that numbers, and that goes basically to your allegation essentially that this is something that they are banking on, they actually are counting on as revenues.

Americans are filing their taxes right now.  They don’t want to lose money.  They don’t want to lose that refund.  What’s your advice?

Adam:  You need to file early.  And you need to make sure that when you use these tax preparation services, you use long and strong alphanumeric passwords that can’t be easily deciphered.  You cannot use user name and password universally through your network of social networking, emails, financial services.  Tax should be very very special.  And also don’t save any tax preparation on your computer:  put it on an encrypted thumb drive and when you finish using whatever, don’t keep it on your computer because your computer could get hacked.

Shane:  Better yet, file by paper.

The Barefoot Accountant:  The above-mentioned “transcript” is not complete and may contain errors.  Please refer to the video tape for completeness and accuracy.

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TurboTax’s Anti-Fraud Efforts Under Scrutiny

TurboTax’s Anti-Fraud Efforts Under Scrutiny

Two former security employees at Intuit — the makers of the popular tax preparation software and service TurboTax – allege that the company has made millions of dollars knowingly processing state and federal tax refunds filed by cybercriminals. Intuit says it leads the industry in voluntarily reporting suspicious returns, and that ultimately it is up to theInternal Revenue Service to develop industry-wide requirements for tax preparation firms to follow in their fight against the multi-billion dollar problem of tax refund fraud.

Last week, KrebsOnSecurity published an exclusive interview with Indu Kodukula, Intuit’s chief information security officer. Kodukula explained that customer password re-use was a major cause of a spike this tax season in fraudulent state tax refund requests. The increase in phony state refund requests prompted several state revenue departments to complain to their state attorneys general. In response, TurboTax temporarily halted all state filings while it investigated claims of a possible breach. The company resumed state filing shortly after that pause, saying it could find no evidence that customers’ TurboTax credentials had been stolen from its network.

Kodukula noted that although the incidence of hijacked, existing TurboTax accounts was rapidly growing, the majority of refund scams the company has to deal with stem from “stolen identity refund fraud” or SIRF. In SIRF, the thieves gather pieces of data about taxpayers from outside means — through phishing attacks or identity theft services in the underground, for example — then create accounts at TurboTax in the victims’ names and file fraudulent tax refund claims with the IRS.

Kodukula cast Intuit as an industry leader in helping the IRS identify and ultimately deny suspicious tax returns. But that portrayal only tells part of the story, according to two former Intuit employees who until recently each held crucial security positions helping the company identify and fight tax fraud. Both individuals described a company that has intentionally dialed back efforts to crack down on SIRF so as not to lose market share when fraudsters began shifting their business to Intuit’s competitors.

Robert Lee, a security business partner at Intuit’s consumer tax group until his departure from the company in July 2014, said he and his team at Intuit developed sophisticated fraud models to help Intuit quickly identify and close accounts that were being used by crooks to commit massive amounts of SIRF fraud.

But Lee said he was mystified when Intuit repeatedly refused to adopt some basic policies that would make it more costly and complicated for fraudsters to abuse the company’s service for tax refund fraud, such as blocking the re-use of the same Social Security number across a certain number of TurboTax accounts, or preventing the same account from filing more than a small number of tax returns.

We found literally millions of accounts that were 100 percent used only for fraud. But management explicitly forbade us from either flagging the accounts as fraudulent, or turning off those accounts.

“If I sign up for an account and file tax refund requests on 100 people who are not me, it’s obviously fraud,” Lee said in an interview with KrebsOnSecurity. “We found literally millions of accounts that were 100 percent used only for fraud. But management explicitly forbade us from either flagging the accounts as fraudulent, or turning off those accounts.

The allegations surface just days after Senate Finance Committee Chairman Orrin Hatch (R., Utah) said his panel will be holding hearings on reports about a spike in fraudulent filings through TurboTax and elsewhere. The House Ways and Means Committee is reportedly looking into the matter and has held bipartisan staff-level discussions with the IRS and Intuit.

The Federal Trade Commission (FTC) said it received 332,646 identity theft complaints in the calendar year 2014, and that almost one-third of them — the largest portion — were tax-related identity theft complaints. Tax identity theft has been the largest ID theft category for the last five years.

According to a recent report (PDF) from the U.S. Government Accountability Office(GAO), the IRS estimated it prevented $24.2 billion in fraudulent identity theft refunds in 2013.  Unfortunately, the IRS also paid $5.8 billion that year for refund requests later determined to be fraud. The GAO noted that because of the difficulties in knowing the amount of undetected fraud, the actual amount could far exceed those estimates.


Lee said the scammers who hijack existing TurboTax accounts most often will use stolen credit cards to pay the $25-$50 TurboTax fee for processing and sending the refund request to the IRS.

But he said the crooks perpetrating SIRF typically force the IRS — and, by extension, U.S. taxpayers — to cover the fee for their bogus filings. That’s because most SIRF filings take advantage of what’s known in the online tax preparation business as a ‘refund transfer’, which deducts TurboTax’s filing fee from the total amount of the fraudulent refund request. If the IRS then approves the fraudulent return, TurboTax gets paid.

“The reason fraudsters love this system is because they don’t even have to use stolen credit cards to do it,” Lee said. “What’s really going on here is that the fraud business is actually profitable for Intuit.”

Lee confirmed Kodukula’s narrative that Intuit is an industry leader in sending the IRS regular reports about tax returns that appear suspicious. But he said the company eventually scaled back those reports after noticing that the overall fraud the IRS was reporting wasn’t decreasing as a result of Intuit’s reporting: Fraudsters were simply taking their business to Intuit’s competitors.

We started to see not only our fraud numbers but also our revenue go down before the peak of tax season a couple of years ago,” Lee recalled. “When we stopped or delayed sending those fraud numbers, we saw the fraud and our revenue go back up.

“We noticed the IRS started taking action, and because of this, we started to see not only our fraud numbers but also our revenue go down before the peak of tax season a couple of years ago,” Lee recalled. “When we stopped or delayed sending those fraud numbers, we saw the fraud and our revenue go back up.

Lee said that early on, the reports on returns that Intuit’s fraud teams flagged as bogus were sent immediately to the IRS.

“Then, there was a time period where we didn’t deliver that information at all,” he said. “And then at one point there was a two-week delay added between the time the information was ready and the time it was submitted to the IRS. There was no technical reason for that delay, but I can only speculate what the real justification for that was.”

KrebsOnSecurity obtained a copy of a recording made of an internal Intuit conference call on Oct. 14, 2014, in which Michael Lyons, TurboTax’s deputy general counsel, describes the risks of the company being overly aggressive — relative to its competitors — in flagging suspicious tax returns for the IRS.

“As you can imagine, the bad guys being smart and savvy, they saw this and noticed it, they just went somewhere else,” Lyons said in the recording. “The amount of fraudulent activity didn’t change. The landscape didn’t change. It was like squeezing a balloon. They recognized that TurboTax returns were getting stopped at the door. So they said, ‘We’ll just go over toH&R Block, to TaxSlayer or TaxAct, or whatever.’ And all of a sudden we saw what we call ‘multi-filer activity’ had completely dropped off a cliff but the amount that the IRS reported coming through digital channels and through their self reported fraud network was not changing at all. The bad guys had just gone from us to others.”

That recording was shared by Shane MacDougall, formerly a principal security engineer at Intuit. MacDougall resigned from the company last week and filed an official whistleblower complaint with the U.S. Securities and Exchange Commission, alleging that the company routinely placed profits ahead of ethics. MacDougall submitted the recording in his filing with the SEC.

“Complainant repeatedly raised issues with managers, directors, and even [a senior vice president] of the company to try to rectify ongoing fraud, but was repeatedly rebuffed and told Intuit couldn’t do anything that would ‘hurt the numbers’,” MacDougall wrote in his SEC filing. “Complainant repeatedly offered solutions to help stop the fraud, but was ignored.”


For its part, Intuit maintains that it is well out in front of its competitors in voluntarily reporting to the IRS refund requests that the company has flagged as suspicious. The company also stresses that it has done so even though the IRS still has not promulgated rules that require TurboTax and its competitors to report suspicious returns  — or even how to report such activity. Intuit executives say they went to the IRS three years ago to request specific authority to share that information. The IRS did not respond to requests for comment.

Intuit officials declined to address Lyons’ recorded comments specifically, although they did confirm that a company attorney led an employee WebEx meeting on the date the recording was made. But David Williams, Intuit’s chief tax officer, said what’s missing from the recorded conversation excerpted above is that Intuit has been at the forefront of asking the IRS to propose industry standards that every industry player can follow — requests that have so far gone unheeded.

“We have led the industry in making suspicious activity reports, and I’d venture to say that virtually all of the returns that Mr. Lee is quoted as referring to appear in our suspicious activity reports and are stopped by the IRS,” Williams said. “Whatever else Mr. Lee may have seen, I’m not buying the premise that somehow there was a profit motive in it for us.”

Robert Lanesey, Inuit’s chief communications officer, said Intuit doesn’t make a penny on tax filings that are ultimately rejected by the IRS.

“Revenue that comes from reports included in our suspicious activity reports to the IRS has dropped precipitously as we have changed and improved our reporting mechanisms,” Lanesey said. “When it comes to market share, it doesn’t count toward our market share unless it’s a successful return. We’ve gotten better and we’ve gotten more accurate, but it’s not about money.”

“Revenue that comes from reports included in our suspicious activity reports to the IRS has dropped precipitously as we have changed and improved our reporting mechanisms,” Lanesey said. “When it comes to market share, it doesn’t count toward our market share unless it’s a successful return. We’ve gotten better and we’ve gotten more accurate, but it’s not about money.”

Williams added that it is not up to Intuit to block returns from being filed, and that it is the IRS’s sole determination whether to process a given refund request.

“We will flag them as suspicious, but we do not get to determine if a return is fraud,” Williams said. “It’s the IRS’s responsibility and ultimately they make that decision. What I will tell you is that of the ones we report as suspicious, the IRS rejects a very high percentage, somewhere in the 80-90 percent range.”

Earlier this month, Intuit CEO Brad Smith sent a letter to the commissioner of the IRS,  noting that while Intuit sends reports to the IRS when it sees patterns of suspicious behavior, the government has been limited in the types of information it can share with parties, including tax-preparation firms.

“The IRS could be the convener to bring the States together to help drive common standards adoption,” Smith wrote, offering the assistance of Intuit staff members “to work directly with the IRS and the States in whatever ways may be of assistance…as the fight against fraud goes forward.”


Lee and MacDougall both said Intuit’s official approach to fighting fraud is guided by a policy of zero tolerance for so-called “false positives” — the problem of incorrectly flagging a legitimate customer refund request as suspicious, and possibly incurring the double whammy of a delay in the customer’s refund and an inquiry by the IRS. This is supported by audio recordings of conference calls between Intuit’s senior executives that were shared with KrebsOnSecurity.

“We protect the sanctity of the customer experience and hold it as inviolate,” Intuit’s General
Counsel Michael Lyons can be heard saying on a recorded October 2014 internal conference call. “We do everything we can to organize the best screening program we can, but we avoid false positives at all costs. Because getting a legitimate taxpayer ensnared in the ‘you’re a bad guy’ area with the IRS is hell. Once your return gets flagged as suspicious, rejected and the IRS starts investigating, you’re not in a good place. More than 50 percent of people out there are living paycheck to paycheck, and when this is the biggest paycheck of the year for them, they can’t afford to get erroneously flagged as fraud and have to prove to the IRS who they are so that they can get that legitimate refund that they were expecting months ago.”

On the same conference call, MacDougall can be heard asking Lyons why the company wouldn’t want to use security as a way to set the company apart from its competitors in the online tax preparation industry.

It is always possible for Intuit to build a better mousetrap. But because it doesn’t solve the systemic problem of bad guys doing this, all it really does is shoot us in the foot and make it slightly easier for IRS to continue to kick the can down the road.

“We don’t use security as a marketing tactic for Intuit,” Lyons explained. “We declared that this was one of our principles. It is always possible for Intuit to build a better mousetrap. But because it doesn’t solve the systemic problem of bad guys doing this, all it really does is shoot us in the foot and make it slightly easier for IRS to continue to kick the can down the road. What it does do is artificially harm our numbers and artificially inflate the competitive numbers associated with digital tax returns.”

Intuit’s Lanesey confirmed Lee’s claim that Intuit adds a delay — it is currently three weeks — from the time a customer files a refund claim and the time it transmits “scoring” data to the IRS intended to communicate which returns the company believes are suspicious. Lanesey said the delay was added specifically to avoid false positives.

“The reason we did that was that when we started this reporting, we weren’t accurate, and were ensnaring legitimate taxpayers in that process,” Lanesey said. “We slowed down and spent more time to review to make sure we could get more accurate and we have in fact done exactly that. The match rates between what the IRS rejects and what we send are now measurably higher today with the new reporting than they were then.”

Unfortunately, three weeks is about how long the IRS takes to decide whether to reject or approve tax refund requests. In an August 2014 report to Congress on the tax refund fraud epidemic, the GAO said that for 2014, the IRS informed taxpayers that it would generally issue refunds in less than 21 days after receiving a tax return — primarily because the IRS is required by law to pay interest if it takes longer than 45 days after the due date of the return to issue a refund.

Williams said Intuit is open to shortening its reporting delay.

“As we’ve gotten better at this and the IRS has gotten better at this, we can certainly look at shortening the timeframes,” he said. “Given the fact that over the past few years we’ve improved our speed, processes and techniques for reporting accurately, we can certainly explore whether they are able to take the data we give them and we are able to provide it to them in a way that is more useful.”


The scourge of tax fraud is hardly a problem confined to TurboTax, but with nearly 29 million customers last year TurboTax is by far the biggest player in the market. In contrast, H&R Block and TaxAct each handled seven million prepared returns last year, according to figures collected by The Wall Street Journal.

Both Lee and MacDougall said they wanted to go public with their concerns because TurboTax and the rest of the industry  have for so long put off implementing stronger account security measures. MacDougall said he filed the whistleblower complaint with the SEC because he witnessed a pattern of activity within Intuit’s management that suggested the firm was not interested in stopping fraud if it meant throttling profits when none of its competitors were doing the same.

MacDougall said that about a year ago he had a meeting with the head of Intuit’s security division wherein security team members were asked to pitch their projects for the year. MacDougall said he thought his idea was certain to generate an enthusiastic response from higher-ups at the company: Build a fraud ‘honeypot.’

In information security terminology, a honeypot is a virtual holding area to which known or suspected fraudsters are redirected, so that their actions and activities can be monitored and mined for patterns that potentially aid in better identifying fraudulent activity. Honeypots also serve a more cathartic — albeit potentially just as useful — purpose: They tie up the time and attention of the fraudsters and cause them to waste tons of resources on fruitless activity.

“My project was going to be a fraud honeypot,” MacDougall recalled. “My pitch was that we would create a honeypot in TurboTax so that every time a fraudster came in and we figured it out, we’d switch them over to the honeypot version of the site so that we could waste their time, exhaust their resources, and at the end of the day they wouldn’t know they’d been scammed for several weeks, when they finally realized that none of their fraudulent returns had even been filed.”

But MacDougall said he was stunned when his boss emphatically rejected his idea for use on TurboTax accounts. Instead, she brought up the fraud-as-a-balloon analogy, MacDougall said.

“She said ‘You can use this on any other product except TurboTax’,” MacDougall said. “I asked why we wouldn’t want to use this on our flagship product, and her answer was that this was an industry problem and not just a TurboTax problem.”

whattodo copyOnly after Intuit was forced to temporarily suspend state filings earlier this month did the company’s chief executive announce plans to beef up the security of customer accounts. Intuit now says it plans to start requiring customers to validate their accounts, either via email, text message or by answering questions about their financial history relayed through the service by big-three credit bureau Experian.

Lee says those requirements are long overdue, but that they don’t go nearly far enough considering how much sensitive information Intuit holds about tens of millions of taxpayers.

“Tax preparers ought to apply similar ‘know your customer’ practices that we see in the financial markets,” he said. “When you give your most sensitive data and that of your family’s to a company, that company should offer you more security than you can get at Facebook or World of Warcraft,” Lee said, referring to two popular online businesses that have long offered the type of multi-factor authentication that Intuit just announced this month.

At a minimum, Lee said, tax preparation companies should require users to prove they have access to the phone number and email address that they assign to their account, and should bar multiple accounts from using the same phone number or email address. TurboTax and others also should allow only one account per Social Security number, he said.

“The point here is not to shame Intuit, but to educate the American public about what’s going on,” Lee said. “The industry as a whole, not just Intuit, needs to grow up and tackle this fraud problem seriously.”

Intuit’s David Williams said the company is focused on remedying some of the account issues raised by Lee and others.

“To be fair, our recent experience with the states has been a wake-up call that we are going to be more aggressive than anybody going forward, even if we were just acting consistently [with the rest of the industry] in the past,” he said. “That’s why we always talk about our anti-fraud efforts as evolving. We don’t have every great idea in the world, but we’re always looking at improving.”

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Bring lunch, a sleeping bag, and a recording device when you telephone call the Internal Revenue Service (IRS)


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TurboTax accounts hacked, delaying tax refunds, compromising personal information, impairing credit rating

taxreturnidentitytheftSo you want to file your taxes online by using TurboTax, by Intuit?  Perhaps you should think again.  An audacious gang of online criminals have been systematically targeting TurboTax, filing fraudulent tax returns of individuals, and diverting their tax refunds to prepaid debit cards. The vulnerability of online tax preparation services became apparent last month when the Utah Tax Commission and the Minnesota Department of Revenue found thousands of potentially fraudulent returns. Those returns were filed using TurboTax, the popular program made by Intuit.

This kind of fraud associated with fictitious tax returns has risen sharply in recent years with some states seeing a thirty-seven fold increase in fraudulent returns this year.  But Intuit does not immediately alert taxation authorities even after it flagged many of the returns as “suspicious,” denying its responsibility to determine whether these suspicious tax returns are fraudulent, reasoning that it could not stop fraud in the industry.

But critics said Intuit and other tax software providers have a responsibility to protect the integrity of the tax filing system. And several security experts said the company is only now adding security measures that have been used by e-mail and social-media companies for years.

“They [e.g., Intuit] can’t blame everything on the IRS. That’s ridiculous,” said Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group.

Among Intuit’s critics are two former employees who said they protested Intuit’s decision not to do more to halt seemingly fraudulent returns when they worked at the company.

One of them, Shane MacDougall, who was a principal security engineer at Intuit until last month, recently filed a whistleblower complaint with the Securities and Exchange Commission that alleges Intuit chose not to take needed security measures because executives worried those actions would cut into the company’s market share.

“One of the main reasons that I left was that Intuit was seemingly unwilling to implement even the most basic safeguards to protect their users that we were recommending,” MacDougall said. “Something like preventing multiple people from using the same Social Security number is extremely simple to do and that would stop a ton of fraud dead in its tracks, and that was one of many recommendations that we made that they would not implement.”

An internal strategy presentation obtained by The Washington Post showed that the number of “suspicious” customers who successfully filed a return grew from about 900,000 in 2010 to about 2.5 million in 2012. About 29 million people used TurboTax last year.

Intuit declined to comment about the document.

Tax entities have observed that Intuit and its rivals in the self-preparation software business — H&R Block and Blucora, the maker of TaxAct — do not have a financial incentive to erect the strongest possible security protections for consumers. Such steps can make accessing accounts less convenient.

“Commercial tax preparation software vendors have a much different primary objective than tax agencies. They are driven by profit,” Julie Magee, commissioner of the Alabama Department of Revenue, wrote in a public letter this week. “The easier they make it to file a return, the more customers they can get and the more profitable they will become. There is no incentive for them to stop fraud.”

The hackers who targeted TurboTax this year appeared to use two techniques. Some seemed to already have people’s personal information and created fake accounts to submit phony tax returns. Others figured out users’ log-ins and passwords, by trying multiple iterations, and gained wide access to their accounts.

Indeed, many Americans will not discover that they have been victimized until they attempt to file returns in the coming weeks.  And after they report the fraud to the IRS, it could be at least six months, if not much longer, before the agency is able o verify their identities and issue their refunds.  They are also often required to file their tax returns through paper.

In addition to the considerable delay in obtaining a tax refund, another concern resulting from hackers gaining access to one’s account on TurboTax is their access to one’s personal information, and the impairment of one’s credit rating.

So do you still want to file your tax returns using TurboTax ?  LOL!

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Are accountants the future anthropologists of the cyber era?

Forty-nine years ago, when I was at the University of Connecticut, accountants and anthropologists seemed to be members of different social and intellectual tribes. The former appeared to be civilized folk who wore funny suits like penguins, used calculators or slide rules, and prepared tax returns; the latter worried about the environment and issues such as social welfare, and appeared in “The National Geographic” magazine with native women showing their titties.

Gillian TettBut are accountants about to leap into the sphere of anthropology, at least in an intellectual sense?  Gillian Tett, author of the recent article, “Accountancy: the new buzz“, found herself pondering “these questions after reading Six Capitals, or Can Accountants Save the Planet? by Australian business writer Jane Gleeson-White.”  What follows is the extract of her article suggesting that accountants may be the cyber era’s new anthropologists.  (LOL!  And I once thought my humanities and social science background was a waste of time and money!)

As the title suggests, the book is all about accountants. But not the dry number crunchers you might expect. Instead, Gleeson-White suggests that a mini-revolution is emerging on the fringes of the accountancy world — and that this has implications for us all.

The issue at stake is how we classify the world. Traditionally, the assumption has been that what accountants do is measure items that have clear, tangible value, sitting in bounded institutions or geographical areas: stock stored in warehouses, salaries, cash and so on. That was what the market economy and capitalism seemed to be about. What anthropologists or ecologists look at — such as the sustainability of the environment, human relations or social trust — is less tangible and, thus, usually ignored.

Gleeson-White believes the modern accounting practices we take for granted are the product of a particular economic environment, namely the industrial revolution. This system, known as double-entry bookkeeping, first appeared in 15th-century Venice. However, it really began to flourish when companies needed ways to measure their complex operations as they began to make vast quantities of products.

Double-entry bookkeeping worked well for the industrial age but is less effective in today’s digital world. The system does not really capture the value of the intangibles that drive modern growth (ideas, networks and human relations, for example). Nor does it measure costs that transcend boundaries, such as environmental problems or “externalities”, as economists like to say.

Gleeson-White argues that we need to change how accountants imagine capital to include human capital, social capital, environmental capital and so on. And she cites accountants who are doing just that. For example, companies such as Puma and Unilever are now actively looking at their environmental and social footprints, alongside the usual financial metrics.

Some years ago, Indian researchers attempted to quantify the environmental costs linked to a $4 hamburger (for example, loss of rainforests, loss of ecosystems provided by the rainforest, loss of carbon, loss of biodiversity etc) and concluded that the price of a burger should be nearer $200.

Governments have begun to play around with similar ideas. In 2007, the National Audit Office estimated the value of bees’ service to the British economy at £200m. The retail value of what the bees pollinate was estimated to be closer to £1bn.

“A quiet revolution [is] taking place in the least likely realm of all — our accounting systems,” Gleeson-White suggests. Now, I daresay that some FT readers will roll their eyes at this — albeit for different reasons. Many environmentalists consider it demeaning to put a price tag on nature; bees are not just valuable in financial terms. Conversely, many bankers and investment managers hate the concept of companies worrying about anything other than shareholders; they fear it will be distracting. And I admit that I often wince when companies talk too enthusiastically about their “social” or “environmental” responsibility. It often sounds like window dressing.

Nevertheless, it is worth taking Gleeson-White’s ideas seriously for one reason at least: they should make us think about how we measure and classify the world. This can be difficult for us to grasp, since our systems are so deeply ingrained that they seem normal. And most of us assume that it is quite natural for accountants to separate economic transactions from any social context.

In reality, though, as the French intellectual Marcel Mauss pointed out a century ago, the idea of ripping economic transactions out of a wider context is not “normal” to most cultures, during most of history. On the contrary, in most societies it is so hard to imagine economic transaction without social ties that the western idea that “gifts” are different from “commercial sales” is entirely alien.

So the next time you talk to an accountant, it is worth trying a little mental experiment. If you were to devise a system for classifying and measuring the world from scratch in a globalised cyber era, would it really look like what we have today? If your answer is “no”, then perhaps it is time to think of an alternative; and maybe even talk with an anthropologist.

Although east is east, and west is west, perhaps the twain may meet after all.

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Don’t let a stooge prepare your income tax returns.

Who does your tax returns? Don’t tell me you do your own income tax returns, or you go to one of those places where they have someone with a GED and 72 hours of training prepare your tax returns?

You won’t save any money having a stooge prepare your tax returns; in fact, you probably are paying needless amounts in taxes and more than our tax preparation services charge.

I am a Certified Public Accountant with a graduate degree in professional accounting and years and years of service in public accounting preparing tax returns. The tax law is so very complicated that even Albert Einstein said, “The hardest thing in the world to understand is the income tax.” Do you really believe that you or someone with merely 72 hours of training can understand the complexity of a tax code that baffled Albert Einstein?

So you trust a stooge to prepare your tax returns? That’s hilarious! Ha, ha, ha, ha, ha. Call me from jail or during your next IRS audit.

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Alayne Fleischmann blows whistle on JPMorgan Chase massive criminal securities fraud

A year ago this month the U.S. Department of Justice announced that the banking giant JPMorgan Chase would avoid criminal charges by agreeing to pay $13 billion to settle claims that it had routinely overstated the quality of mortgages it was selling to investors. But how did the bank avoid prosecution for committing fraud that helped cause the 2008 financial crisis? Today we speak to JPMorgan Chase whistleblower Alayne Fleischmann in her first televised interview discussing how she witnessed “massive criminal securities fraud” in the bank’s mortgage operations. She is profiled in Matt Taibbi’s new Rolling Stone investigation, “The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking.”


JUAN GONZÁLEZ: A year ago this month, the Justice Department announced the banking giant JPMorgan Chase would avoid criminal charges by agreeing to pay $13 billion to settle claims that it had routinely overstated the quality of mortgages it was selling to investors. When the toxic mortgage securities started turning bad, investors lost faith in the banking system, and a housing crisis turned into the 2008 financial crisis that led to millions of home foreclosures. New York Attorney General Eric Schneiderman unveiled the settlement last November.

ATTORNEY GENERAL ERIC SCHNEIDERMAN:Not only will Chase have to pay the largest settlement ever levied against a financial institution, but it has admitted in our statement of facts that its own employees, employees of Bear Stearns and employees of Washington Mutual made material misrepresentations to the investing public about a large number of residential mortgage-backed securities that they issued prior to the crash in 2008. This settlement is a major victory in the fight to hold accountable those who were responsible for that crash.

AMY GOODMAN: Soon after the JPMorgan Chase deal was reached, U.S. Attorney General Eric Holder discussed the bank’s misdeeds during an interview with NBC News’ Pete Williams.

ATTORNEY GENERAL ERIC HOLDER: It packaged loans that it knew did not pass its own stated due diligence test. We have a whistleblower who indicated that she expressed concerns about what the strength of these mortgage-backed securities were, and they put them out there to the market and said that they were perfectly fine, when in fact they were not.

PETE WILLIAMS: So, to be clear, you’re saying that JPMorgan’s conduct here contributed to the housing collapse?

ATTORNEY GENERAL ERIC HOLDER: Not only the conduct of JPMorgan, it was the conduct of other banks doing similar kinds of things that led directly to the collapse of our economy in 2008 and in 2009.

JUAN GONZÁLEZ: During that interview, Attorney General Eric Holder mentioned the role of an unnamed whistleblower from JPMorgan Chase who aided the Justice Department’s case against the bank. Well, until this week, that whistleblower, Alayne Fleischmann, a securities lawyer who worked for JPMorgan, had never spoken publicly about what she witnessed inside the bank. That changed yesterday when Rolling Stone magazine published a major new piece by Matt Taibbi headlined “The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking.”

AMY GOODMAN: In the article, Alayne Fleischmann criticizes not only JPMorgan’s banking practices, but how government regulators at the Holder Justice Department responded to the bank’s lawbreaking. Today, in her first televised interview, Alayne Fleischmann joins us here on Democracy Now!, along with Matt Taibbi, who has closely covered the financial crisis for years. His latest book,Divide: American Injustice in the Age of the Wealth Gap, has just come out in paperback.

And we welcome you both to Democracy Now! for the hour.

MATT TAIBBI: Thanks for having us on.

AMY GOODMAN: So, Alayne Fleischmann, start at the beginning. Why did you decide to come forward? And how did you end up at Chase?

ALAYNE FLEISCHMANN: Sure. For a long time, I was expecting it to come out. I’ve been talking to the government for two-and-a-half years now. And first it went through the SEC. Then it went through the Civil Division of the DOJ. And at some stage after watching all of these major banks have deals that actually the facts get wiped away, I started to feel that if I don’t come forward, there’s a real chance of that happening here, too.

In terms of JPMorgan Chase, I started there in March 2006 at sort of the height of the boom. When I started, everything seemed normal. I didn’t really realize some of the things that were happening in the background. And then things started to change in about May, a couple months after I had been there.

JUAN GONZÁLEZ: Well, what—when you went to work there, what specifically was your job? And if you could walk us through how you began to realize the huge problem that the bank was a part of?

ALAYNE FLEISCHMANN: Sure. I started as what they call a deal manager. Basically, we coordinate between all these different groups when we’re bringing in these loans, that are then going to be sold to investors. I first noticed that there was a problem when they brought in a new person to do our diligence, which is just the review of the loans themselves to make sure they’re of good quality. As soon as he came in, we suddenly—this wall sort of came down between myself and the group that was doing this review, and you couldn’t get information that you would normally get. On top of that, there was immediately a sort of a no-email policy. He wouldn’t send emails, and we weren’t allowed to send him emails. He would actually come out and yell at you if you sent him an email.

AMY GOODMAN: What was the reason?

ALAYNE FLEISCHMANN: It was never given, which was extremely worrisome, because normally the reason why you have a compliance and diligence department is to actually have written policies about what you’re doing, to be able to explain to people how you’re making your decisions. So it’s exactly the opposite of what you would normally expect.

JUAN GONZÁLEZ: And when you say to review the quality of the loans, if you could—


JUAN GONZÁLEZ: —for people who are not aware—you were, in essence, certifying that these individual loans could be packaged into a group of securities to then be sold to investors in a huge package, right? But you had to go through every individual loan? Was that—

ALAYNE FLEISCHMANN: Yeah, that’s pretty much what happens. It’s really that you’re taking the actual loan files, that was done between the lender and the borrower, and looking at them to make sure everything looks right. Does this person have enough money to pay off their loan? Do they have the sort of history where we think that they’re going to pay this loan? And if we find that they don’t, then we’re actually not supposed to purchase the loans, and certainly shouldn’t be selling them to other investors without at least telling them there’s something wrong with them.

AMY GOODMAN: And so, what was the smoking gun for you?

ALAYNE FLEISCHMANN: Everything about—what really started happening—in particular, it became apparent in October—was that sometimes we had deals coming in where even though I wasn’t even the person looking at the loans, you could tell from where I was that something was wrong with them. The GreenPoint deal, which is what Matt talks about in his article, even when the loans came in, they were very, very old, which usually you try to actually pull these loans and sell them within two to three months—these loans were going back to close to the beginning of the year. If you work in the industry, you know immediately what that means, is either they couldn’t sell them, because the buyers were telling them they weren’t any good, or, even worse, they’d been sold and then had missed a bunch of payments, so they had actually been sold back to the originator. Any of those loans you wouldn’t normally sell to investors as regular loans.

JUAN GONZÁLEZ: Now, Matt, you’ve referred in your article to these loans as basically selling old, beat-up used cars—


JUAN GONZÁLEZ: —as if they were new. Could you explain that?

MATT TAIBBI: Yeah, that’s exactly what Alayne is talking about. Essentially, what the bank was doing was they—you know, there are companies out there, these mortgage lenders, like a company that might be familiar to people is, like, Countrywide—in this case, it was an originator called GreenPoint—they would go out into neighborhoods, and during this boom period, they were giving mortgages to anybody and everybody with a pulse, essentially. They were especially low-income neighborhoods. They were offering these very advantageous loans to people, whether they could afford the houses or not. They were buying huge masses of these loans. And then they were—

JUAN GONZÁLEZ: They were called like “liar’s loans,” or stated income where no one even checked whether the person had the income to actually pay it off.

MATT TAIBBI: That’s exactly right. That’s exactly right. That was the verbiage, “liar’s loans.” TheFBI warned that there was going to be an epidemic of these liar’s loans way back in 2004. The industry ignored these warnings. The government ignored these warnings. And there was this huge influx of these stated income loans, where people could just say that they made an enormous amount of money, and nobody would check.

So the bank buys all these loans, and then what they were doing is essentially throwing them into big pools, making hamburger out of them, and then selling that hamburger to pension funds, insurance companies, hedge funds, all kinds of investors. Typically ordinary people were the people on the other end buying this stuff. They were investing in these securities, and often they didn’t even know it.

What Alayne was involved with was making sure that these loans were of good quality, so that pension funds, when they bought these securities, weren’t buying something that was going to blow up on them a year later. And what she found was that they were buying loans that were of very dubious quality, that were extremely risky, and that should not have been made into that hamburger.

AMY GOODMAN: We’re going to break, and when we come back, we want to find out what happened when you went to your colleagues, your superiors, and then went outside the company to the U.S. government, right on up to Eric Holder and the Obama administration. Today, a Democracy Now! broadcast exclusive, Alayne Fleischmann is with us, the JPMorgan Chase whistleblower, speaking for the first time about her experience as deal manager at JPMorgan, where she says she witnessed “massive criminal securities fraud” in the bank’s mortgage operations during the period leading up to the financial crisis. And Matt Taibbi is with us, award-winning journalist, now back withRolling Stone magazine, his latest piece headlined “The $9 Billion Witness.” Stay with us.


AMY GOODMAN: We’re speaking to JPMorgan Chase whistleblower Alayne Fleischmann and reporter Matt Taibbi. His latest piece, “The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking.” Last November, Attorney General Eric Holder appeared on NBC News just after the JPMorgan Chase settlement was reached. He was questioned by NBC’s Pete Williams.

PETE WILLIAMS: What about those who say, “Well, the message here is, if you do wrong, you just pay for it and move along”?

ATTORNEY GENERAL ERIC HOLDER: This was not simply something that JPMorgan simply signed a check and smilingly said, “This is a good deal for us.” This inflicts pain on that institution.

PETE WILLIAMS: But is this, in essence, a sort of template? We can expect to see other settlements now?

ATTORNEY GENERAL ERIC HOLDER: I certainly think that the way in which this case has been settled is a template of what we can expect, both in terms of getting maximum amounts of money and then using that money so that we get it to people who suffer the greatest amount—that is, either investors or homeowners.

AMY GOODMAN: That’s Attorney General Eric Holder. Alayne Fleischmann, let’s take it back a step. When you started to alert your colleagues and your supervisors at JPMorgan Chase, what did they say?

ALAYNE FLEISCHMANN: Well, what happened was the transaction, at one point, just stopped. It turned out that 40 percent of the loans in this deal had problems with them. When we tried raising this issue with our superiors, what actually happened is they just started yelling at the diligence managers who were clearing the loans, sort of yelling, berating them, making them do reports over and over again. And it became clear that, although they wouldn’t say it, it was going to be like that until they would clear the loans. So what actually happened is these loans started being cleared, but basically just by sort of the brute force of what was going on there.

I raised it first with a managing director and an executive director, and couldn’t get any response. After that, I decided the best possibility would be to write a letter to another managing director that actually laid out everything I was seeing. I used the GreenPoint deal as an example, which is why the letter specifically says exactly who was doing what all over this deal. But it also lays out general problems in our diligence that the salespeople were being involved, which isn’t normal, and that there seemed to be a lot of pressure on diligence managers to clear loans that shouldn’t have been purchased or sold.

JUAN GONZÁLEZ: And the importance of putting it down in a—


JUAN GONZÁLEZ: —putting all the facts down in a letter, what that meant inside the company?

ALAYNE FLEISCHMANN: Yeah. Well, what it used to be is that the way that you could stop these things from happening was, if you write a memo that lays out what’s happening, the management won’t go forward, because they realize that if they do, there’s going to be this evidence of what happened.

JUAN GONZÁLEZ: There’s going to be a paper trail of the—mm-hmm.

ALAYNE FLEISCHMANN: Yeah. The big worry with these settlements and the way they’re being done—and I’m not the only whistleblower in these cases—is that you have these emails and these memos, but nothing happens. A fine gets paid, and then all of the facts and who did what gets washed away. So, as a whistleblower, you’re thinking, “I did all of this, and the DOJ has all of this, but for some reason they’re not going forward on it.”

AMY GOODMAN: So, what happened when you went outside the company? How did you go outside?

ALAYNE FLEISCHMANN: Well, one issue I had is that although I warned not to securitize the loans, there was no way—I was blocked off, especially after I had raised complaints, from being able to see any of the data or the diligence process, which right there shows that something was wrong. So, after I left JPMorgan, I actually had no idea, for a full four years, that the loans had been securitized. On one hand, I was worried they would, but I really thought no one would ever actually securitize those loans.

MATT TAIBBI: This is an important distinction—


MATT TAIBBI: —because Alayne had no idea that a crime had been committed until she had concrete knowledge that the loans had actually been resold to somebody else. They’re certainly allowed to buy as many bad loans and as many risky mortgages as they want. It’s not until they go to some investor and represent to them that these are, you know, AAA-rated securities or whatever, or highly rated securities, that they’re actually committing fraud. And so, she had no way of knowing that. Even after she was laid off from the company, she had no knowledge of what actually happened. So she couldn’t actually report the crime yet, because she only saw one half of the deal.

JUAN GONZÁLEZ: And you were laid off in—at the beginning of 2008, right?


JUAN GONZÁLEZ: Yeah, actually before the crash. Already there was turmoil—


JUAN GONZÁLEZ: —in the home loan market, but there was not—the crash had not happened.


JUAN GONZÁLEZ: And so that the bank, when Jamie Dimon and other leaders later said that they had no realization that the market was tanking as fast as it could, at least your memos were certainly indicating to them that there were major problems in their portfolios.

MATT TAIBBI: Well, what’s funny is they actually said two completely opposite things. There was an article in Fortune magazine later in 2008 in which they report that Jamie Dimon, the CEO of the company, knew as early as October of 2006 that the industry was rife with underwriting problems, all the things that Alayne is talking about. The company was aware of this, and there are quotes in which the CEO is telling his subordinates, “We’ve got to get out of these investments, because this whole thing can go up in smoke.” And then, meanwhile, so Chase is selling its own investments in these kinds of mortgages, but they’re taking these same mortgages and selling them to investors and not telling them that they have these concerns. Later, when they testify in front of the Financial Crisis Inquiry Commission in 2010, Dimon said exactly the opposite. He said, essentially, “Well, we had no idea that these things were happening. We got caught up in the fact that housing prices were just going continually upward.”

AMY GOODMAN: So, talk about the settlement. What happened next?

MATT TAIBBI: Well, so, the settlement happened in—I guess, a year ago about this month. And what’s interesting about it is, Alayne, by that point, had already talked to civil investigators in the U.S. Attorney’s Office in Sacramento, and she talked to some very talented lawyers there who seemed very anxious to press this case. And they were about to release a very detailed civil complaint against Chase in September of last year, and just hours before that press conference, when they were going to announce that, reportedly, Jamie Dimon, again, the CEO of Chase, called up the assistant attorney general, asked to renegotiate, and they canceled the press conference, and they went back into negotiations. And a few months later, they had a settlement in which they paid a lot of money, but none of the facts came out in that.

AMY GOODMAN: Just like if you were in trouble, you could make that call.

MATT TAIBBI: Yeah, I could call up—yeah, I could call up the mayor or the president and have a court case go away. I mean, that’s exactly what happened in this case, is they basically put in a phone call to the very top of the criminal justice system.

JUAN GONZÁLEZ: And what happened to your contacts with the Justice Department, if you could talk about that, that process? How detailed did they want to get into the information that you had?

ALAYNE FLEISCHMANN: Well, my first contact, it was actually after four years. I was working in Calgary, and I got a call from the SEC.

AMY GOODMAN: Because you come from Canada.

ALAYNE FLEISCHMANN: Yeah. He introduced himself as an investigator from the Enforcement Division. And as I sort of paused for a minute, jokingly, he then said, “You weren’t expecting to hear from me, were you?” And after that, they set up my first interview with the SEC, which was very short. It was only maybe an hour, hour and a half. They were only interested in one deal. And even though I kept bringing up GreenPoint and they had the letter that I had written, they weren’t actually interested in that. And the SEC settlement was based on that other deal.

And then, it wasn’t until later, about December 2012, that I first met with the DOJ investigators. And it was very clear that this was going to be very different. As soon as they walked in, you could tell they knew these securities up and down, and they were really anxious to go forward with it and felt very comfortable going forward with the case. So, in that meeting, it was a very detailed meeting, sort of hours of going through how the process works and what happened. And then I had an actual deposition in about May of 2013, where they nailed down a lot more of that.

And you could see at that stage—first, I got to find out for the first time ever how many of these loans had actually gone into—had been sold to investors in sort of one pool, and it was hundreds of millions of dollars’ worth of them, with nothing actually disclosed about the problems with the loan. And then, second, I got to really see what their case was, and they clearly realized they had an incredible case there.

AMY GOODMAN: Testifying before the Senate Judiciary Committee in 2013, Attorney General Eric Holder suggested some banks are “too big to jail.”

ATTORNEY GENERAL ERIC HOLDER: I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large. Again, I’m not talking about HSBC; this is just a more general comment. I think it has an inhibiting influence—impact on our ability to bring resolutions that I think would be more appropriate.

AMY GOODMAN: Matt Taibbi, respond to what Attorney General Eric Holder has testified.

MATT TAIBBI: Well, again, I mean, it’s a crazy thing when the leading law enforcement official in the nation comes out and says, “Well, some companies are just so big that we can’t prosecute them no matter what they do.” In that case, he was speaking—he was testifying in the wake of a settlement the government had entered into with HSBC, which is the biggest bank in Europe and the biggest bank in Great Britain, which had admitted to laundering over $800 million for a pair of Central and South American drug cartels. And if you can’t send someone to jail for laundering $800 million of drug money, you know, because the company is too big, clearly something is very seriously wrong. But yet, this became sort of the unofficial official policy of the Justice Department. And this greatly affected the way they dealt with companies like JPMorgan Chase, like Citigroup, like Bank of America. They tried to find a way to effect some kind of resolution that didn’t involve criminal charges, didn’t involve penalties to individuals, and also didn’t put the facts of any of what they had actually done out into the public.

JUAN GONZÁLEZ: And in that vein, this is—you know, it’s the old Monopoly board game all over again, get out of jail free. Instead of paying $200 to get out of jail, you pay $2 billion to get out of jail. But the amounts of money that these governments are getting as a result of this—I mean, I just checked with the New York state comptroller. New York state alone, this year, is getting out of its bank settlements with Wall Street a windfall of $5 billion. That’s just New York state. Other states are getting their share, and of course the federal government is getting huge infusions. And so, they suddenly have all this cash. And then they also had this other stuff that you’ve talked about, which is consumer relief—


JUAN GONZÁLEZ: —apportions. So, the governments actually get cash settlements, but then they supposedly negotiate additional money for the citizens, a consumer relief. Could you talk about that?

MATT TAIBBI: Well, OK, there’s a couple of things here. First of all, these settlements, they always come up with a big number, but the number is always actually—when you actually look at the accounting, it turns out to be smaller than they announce. In the case of the Chase settlement, the number they announced was $13 billion. But there’s a couple of really important factors here. One is that $7 billion of that—it’s $7 billion, right?—was tax-deductible, which means that all of us, American citizens, anybody who pays taxes, actually picked up the check for about $2.4 billion worth of the settlement. So we paid part of that settlement, which is crazy. I mean, the ordinary person, if we get a speeding ticket, we can’t deduct that when we go to pay our taxes. But these people cratered the world economy, and they get to write a tax deduction for it.

Four billion dollars of the settlement was what they call consumer relief. And what this really boils down to, I mean, there’s some loan forgiveness, where they’re allowing people to pay less principal towards their home loans, but mostly it comes down to letting people have a little extra time to pay off their payments. And it’s not always the bank that is actually doing that; it’s often the investors in those loans who are actually giving the relief. So, it’s not really the bank paying $4 billion. It’s just a number.

AMY GOODMAN: I want to turn to President Obama speaking in September, when Attorney General Eric Holder announced that he would resign.

PRESIDENT BARACK OBAMA: He’s helped safeguard our markets from manipulation and consumers from financial fraud. Since 2009, the Justice Department has brought more than 60 cases against financial institutions and won some of the largest settlements in history for practices related to the financial crisis, recovering $85 billion, much of it returned to ordinary Americans who were badly hurt.

AMY GOODMAN: Matt Taibbi, your response?

MATT TAIBBI: Well, I mean, the first thing I would say is, OK, they brought a bunch of settlements and they collected a bunch of money, but there isn’t a single individual, in this entire tableau, who is actually individually paying any kind of penalty for any of these misdeeds. All of that money came out of the pockets of shareholders. No executives had to pay a fine. No executives had to do a single day in jail. There were not even charges filed against any individuals. And—

AMY GOODMAN: What was the actual crime you feel Jamie Dimon committed that you feel he should be in jail for?

MATT TAIBBI: Well, I can’t stand here and tell you that Jamie Dimon committed a crime. But certainly there are people in these companies, and in cases like Alayne’s case, who would be targets of criminal fraud prosecutions, and probably at a lower level than Jamie Dimon. I think it would be hard to prove, although who knows? Because they didn’t try. In a normal drug case, what you would do is you would take everybody who was guilty, and you would try to roll them up the chain and see how far you could go. And that’s exactly what they did not do in this case. They didn’t aggressively go after everybody. They didn’t follow every lead. Instead, they just sort of went into a back room, decided on a number and made the whole thing go away. And yes, that is a kind of justice, it’s a kind of resolution, but I think it’s insufficient.

JUAN GONZÁLEZ: In fact, as you note in your article, after the settlement agreement with JPMorgan Chase, the stock of the company went up dramatically, the stock price of the company went up dramatically, and Jamie Dimon ended up getting a huge raise from his board of directors.

MATT TAIBBI: Yeah, yeah, in the first weeks after the settlement was announced, the market capitalization of JPMorgan Chase went up 6 percent, which translated into about $12 billion worth of value. So that’s most of your settlement right there. Actually, it’s more than almost—more than the entire settlement, if you look at it as a $9 billion settlement. And yes, Jamie Dimon, just a few weeks after being dinged for the largest regulatory fine in the history of capitalism, got a 74 percent raise by the board of—by the Chase board.

AMY GOODMAN: And we’re going to break. When we come back, we’ll hear Senator Elizabeth Warren asking questions of Jamie Dimon about that raise. Stay with us.


AMY GOODMAN: This is Democracy Now!,, The War and Peace Report. I’m Amy Goodman, with Juan González. We’re talking about “The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking.” Today we’re talking with that woman. Alayne Fleischmann is with us. Alayne Fleischmann, a whistleblower who worked at JPMorgan Chase, she’s speaking today on Democracy Now! in this broadcast exclusive, featured in Matt Taibbi’s piece that came out in Rolling Stone this week, Matt Taibbi also with us. Well, earlier this year, Democratic Senator Elizabeth Warren criticized the size of Jamie Dimon’s salary.

SEN. ELIZABETH WARREN: In 2013 alone, JPMorgan spent nearly $17 billion to settle claims with the federal government, claims relating to its sale of fraudulent mortgage-backed securities, its illegal foreclosure practices like robo-signing, its manipulation of energy markets in California and the Midwest, and its handling of the disastrous London Whale trade. And at the end of the year, JPMorgan gave its CEO, Jamie Dimon, a 75 percent raise, bringing his total compensation to $20 million. Now, you might think that presiding over activities that resulted in $17 billion in payouts for illegal conduct would hurt your case for a fat pay bump, but according to The New York Times, members of the JPMorgan board of directors thought that Jamie Dimon earned the raise, in part—and I’m quoting here—”by acting as chief negotiator as JPMorgan worked out a string of banner government settlements.”

AMY GOODMAN: That was Senator Elizabeth Warren. I’d like Alayne Fleischmann, the whistleblower within JPMorgan Chase, to respond. I mean, do you think part of what you exposed to the government earned Jamie Dimon this increase of 75 percent?

ALAYNE FLEISCHMANN: And I suppose it—the question is whether you’re concerned about making money or whether there’s criminal activity going on at the bank. There’s actually an excellent website called with some lawyers who were involved in the Madoff case, where they’ve been tracking, actually, all of JPMorgan’s fines for fraud and illegal activity. And they’re actually at $29 billion now in the last four years alone. So, the question that needs to be asked is: How is it that you can be a CEO, over $29 billion worth of fines, and get a raise? It also clearly shows that there’s no deterrent to all of these fines. It’s just happening over and over again. And if there aren’t any individuals held accountable, there’s no reason for any of them to actually stop doing these very serious crimes.

JUAN GONZÁLEZ: Well, and not only that, if all of those fines are continually occurring—


JUAN GONZÁLEZ: —where are the crimes that are the basis of being fined?

ALAYNE FLEISCHMANN: Well, yeah, and so that’s one of the really important points, too, is there’s very little difference between civil securities fraud and criminal securities fraud, or even how you can do this as a wire fraud case. Once you have that strong of a civil fraud case, the only real difference is that you need a little more intent level—they had to have really intentionally been doing the fraud—and you have to prove it to a higher standard. You know, you have to show beyond a reasonable doubt that this is what they were doing. But when you look at these cases, these are some of the easiest white-collar crime cases that you’re ever going to see.

And one of the things that I think has been sold to the public is, well, these are really complex and difficult, or we don’t really know who did what. First, in my case, and what I’ve seen in these other cases, there are all sorts of documents that show exactly who was making the decisions and who knew what. The idea that they’re too complex, you know, these securities themselves that are sold to investors are complex, but the fact that the investors were lied to about the quality of the loans, that’s actually really easy. And the fact that obviously if you have people who can’t afford their loans, there’s going to be no money coming out of these loans, is also something that’s not a difficult thing to understand.

AMY GOODMAN: Alayne Fleischmann, why didn’t you go to the press back then? And what made you decide to do it now?

ALAYNE FLEISCHMANN: Yeah, I, for a long time, believed that this come out, that the government would do their investigation and come forward with it. It’s actually taken a really long time for me, because for me it’s a little bit of an incredible thing to believe. But after watching all of these cases over and over again, at some stage I’m in the position where if I keep silent and the statute of limitation runs, or they do one of these agreements where they whitewash everything, then it’s too late, which is what’s happened over and over again so far. So, I’m trying to change the pattern and come out first, so that they have to either follow these properly, the way they would for any other criminal defendant, or explain why they’re not doing it.

JUAN GONZÁLEZ: And, Matt Taibbi, the reality that all—despite all the claims of the Obama administration that they’ve pursued all these civil cases, that they never really went after the people who practically wrecked the world economy, and how that relates into this election result that we just had, where obviously Americans across the board, from Democrats to Republicans to Independents, are still furious about their economic situation and the failure of holding these people accountable?

MATT TAIBBI: Yeah, I think it’s hard not to make a connection between the total lack of enthusiasm that we saw for the Democratic Party this past week and, for instance, their behavior in pushing investigations of the financial services community. And we saw it with the Occupy protests. I talk to people on Wall Street all the time. I mean, all my sources come from Wall Street. And they all say the same thing, that Barack Obama had an incredible opportunity in late 2008, just after he took office. With his communication skills, he could have gone to the American people and explained to them exactly what happened and said, “This is why the economy is bad. This is why you’re losing your job. There was massive criminal activity. It’s not just an accident.” And then he could have gone and put a few people in jail and really put some teeth behind those words. Instead, they swept it all under the rug. And people, even if they don’t completely understand what happened, they sense that nothing was done. And I think it’s important to understand that.

AMY GOODMAN: I presume, Alayne Fleischmann, that you had a confidentiality agreement when you left JPMorgan Chase. Are you violating that? What made you decide to take the risk?

ALAYNE FLEISCHMANN: Yeah, and there are different arguments about whether I am or am not violating it, because of the criminal nature of what I’m bringing forward. For me, at some stage, it’s just sometimes you’re involved in something that’s bigger than you personally. Even right now, there are still all sorts of suits out there by private investors, retirement funds, pension plans, trying to get their money back. And they don’t—in a lot of cases, they don’t know that I have information. So I actually now have, in my email, contacts coming in, asking for help from me, so that they can get this money that was really stolen from their investors, these retirees, back to those people. So, for me, that’s more important than anything that’s going to happen to me.

AMY GOODMAN: Are you concerned about repercussions?

ALAYNE FLEISCHMANN: At some stage, I think I decided that this was more important. And at the end of the day, I’ll be OK. You know, I’ll figure something out, and I’ll get through this. But I think we’re at a stage where unless a lot of people start coming forward and say, “We care about this. We now know what’s happening, and we want someone to do something about it,” that this is all just going to pass into history.

AMY GOODMAN: The government contacted you again this summer?

ALAYNE FLEISCHMANN: Yeah, in August they contacted me.

AMY GOODMAN: That call that they made.


AMY GOODMAN: And do you feel this can reopen, this information, these cases?

ALAYNE FLEISCHMANN: I did meet with them, and I was happy to see that it was an enthusiastic group. The concern I have is that what we’ve seen is that even when they’re really strong cases—you look at the JPMorgan-Madoff case, HSBC—they still, no matter how strong it is, they just get hushed away. So, yeah.

MATT TAIBBI: And this is an important distinction, too, is that it’s often not the line investigators who are the problem. The people who actually work these cases, the career prosecutors who are doing this digging, oftentimes they’re very talented and aggressive lawyers who really know what they’re doing. The problem is, the political wing of the Justice Department can take those cases and do whatever they want with them. And we saw, in Alayne’s case and in many other cases, that they take these excellent investigations, and then they just turn them into these slap-on-the-wrist settlements. And that’s what she’s worried about, I think.

AMY GOODMAN: Well, Matt, it’s great to have you back reporting, to see your piece, but it’s inRolling Stone, it’s not at First Look. You had left Rolling Stone to be part of this new news organization. You were launching, like The Intercept at First Look, The Racket. You tweeted out that this piece was coming out in The Racket when you launched, The Racket launch, if you will.

MATT TAIBBI: Right, right.

AMY GOODMAN: But it didn’t happen.

MATT TAIBBI: No, it didn’t. You know, I think all I can really say about that is that I’m really devastated by the way everything turned out. It was a really horrible situation all around. I’m very, very sorry for the staff that is still there, the people that I hired who took a leap of faith to come work for me. And in a way, I’m—as happy as I am to be back at Rolling Stone, which I always loved, I’m sad that this piece isn’t out in Racket. I mean, I think it would have been a great piece to launch with, but it just didn’t work out that way, and that’s unfortunate.

AMY GOODMAN: Will Racket launch?

MATT TAIBBI: I don’t know. I don’t know. I’m not at the company anymore, so you’d have to direct that question to them. I think they—you know, they absolutely should. They have a very talented group over there and some great young writers, and there’s no reason that they couldn’t.

JUAN GONZÁLEZ: I just wanted to close by asking you about how you would judge the tenure of Eric Holder in—now, obviously, that he’s going to be leaving—in terms of his particular role in going after these banks, and just this whole idea of bankers being able to call directly to the Justice Department to negotiate their deals and stop prosecutions at the lower levels.

MATT TAIBBI: Well, you know, it’s funny. For years now, I’ve been covering a lot of this stuff. And I’ve spoken to a lot of people in law enforcement. And there are really two types of people that I talk to who are prosecutors. One is the kind of old-school law enforcement type that want to get the bad guy at all costs, and they’re really career civil servants who just want to do their jobs and want to see justice happen. And then there’s this new kind of person who’s appearing in government now, who comes out of the corporate defense sector. These are people who grew up as corporate lawyers defending companies like Chase and Bank of America. And that’s who Eric Holder is, very pointedly. He spent a long time at a company called Covington & Burling. And this type of lawyer, this type of law enforcement official, is much more interested in coming up with a settlement that everybody feels good about when they walk out of the room, as opposed to the old-school kind of justice where the bad guy gets his or her comeuppance in the end. And I think his tenure was very representative of a big sea change in the way we do white-collar crime in this country.

AMY GOODMAN: Well, I want to thank you both for being with us. Matt Taibbi, again, we will link to your piece at Rolling Stone. It’s called “The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking.” And thank you to that woman, Alayne Fleischmann. Thank you so much for joining us. Alayne Fleischmann, the JPMorgan Chase whistleblower, former deal manager at JPMorgan, where she says she witnessed “massive criminal securities fraud” in the bank’s mortgage operations during the period leading up to the financial crisis. And congratulations on your book coming out in paperback, Matt. Thanks so much, everyone, for being with us.

Happy birthday to Kieran Meadows. I’ll be speaking in Princeton on Sunday. Check our website.

Alayne Fleischmann, JPMorgan Chase whistleblower. She was a deal manager at the bank, where she says she witnessed “massive criminal securities fraud” in its mortgage operations during the period leading up to the financial crisis.

Matt Taibbi, award-winning journalist with Rolling Stonemagazine. His latest article is headlined “The $9 Billion Witness.” He is author of the book The Divide: American Injustice in the Age of the Wealth Gap.

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