Wells Fargo’s Acquisition of Wachovia Was A Massive Tax Fraud

The Wells Fargo scandal is jaw-dropping! Thus far 5,300 employees have been fired for opening up thousands upon thousands of unauthorized accounts. Wells Fargo, a notoriously bad bank to work for pushed its employees to sell more and more financial products to customers. In order to meet unattainable goals Wells Fargo employees engaged in a massive fraud that may permanently stain the bank’s reputation with the public.

Wells Fargo once again proved the truth of Bill Black’s excellent line, “the best way to rob a bank is to own one.” Banks need to be trusted, their business is based on trust. When Wells Fargo steals from its customers, it betrays their trust. Wells Fargo associates itself with protecting their customers’ money, thus the Wells Fargo’s stagecoach featured on its signage. This recent scandal is yet another example that Wells Fargo isn’t what it claims to be

In fact Wells Fargo is run by thieves, for thieves engaged in fraud. Maybe most local branches are ok. But the higher-ups at Wells Fargo are criminals. The entire financial industry is parasitic; they’re getting free money from the Fed, loophole laws from Congress and a get out of jail card from the Department of Justice.

On October 20, 2011 the Wells Fargo stagecoach galloped through the streets of Winston-Salem. It was part of a parade that Wells Fargo sponsored to commemorate the transition from Wachovia to Wells. Wachovia  after a series of acquisitions in the 2000s was over-extended and insolvent, unable to weather the financial crisis of 2008. Wachovia unlike other more marque financial institutions wasn’t given TARP funds. It was allowed to fail.

Wells Fargo paid a reported $15.1 billion to acquire Wachovia, outbidding Citigroup. The deal became official in January of 2009. But it wasn’t until the October of 2011 that all the signage changed over from Wachovia’s blue and green to Well’s tacky red and yellow color scheme. Wells Fargo still has a large and visible presence in Winston, with thousands of employees located in Winston and the city’s tallest building bearing its name.

But what most people don’t know or don’t remember is that Wells Fargo’s acquisition of Wachovia was a massive tax fraud condoned by Congress. By comparison the blatant fraud that Wells Fargo recently admitted to is small time. Let me explain. When Wells Fargo purchased Wachovia in late 2008 they exploited a massive tax loophole.

This tax loophole was introduced by Congress to encourage banks that were strong to gobble up banks that were weak. This was bad legislation. It was more of a black hole than a loophole. It was revoked just three and a half months later. Essentially this massive loophole allowed Wells Fargo to use the losses on Wachovia’s books to avoid paying taxes on its billions of dollars in profits from 2008 to 2011.

Instead of nationalizing Wachovia and making investors take a haircut, Wachovia was essentially given away to Wells Fargo. Through tax manipulation they got Wachovia’s assets without paying for them. This is corruption at the highest levels of business and government.

Acquiring Wachovia allowed Wells Fargo to become the nation’s largest bank in terms of market capitalization, a distinction Wells Fargo held until just a few days ago. Wells Fargo is a massive, too big to fail bank that has contempt for its customers, as their pattern of scandals attests. The entire bailout of the financial industry was a massive theft from the general public to the 1 percent that our children and grandchildren will be paying for.

 

 

 

 

 

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