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Fort Lauderdale Federal Crime Attorney > Blog > Bank of America > Are Muslim-owned accounts being singled out by big banks ?

Are Muslim-owned accounts being singled out by big banks ?

MIAMI – Two days before a trip back to the Middle East to visit elderly parents this summer, Rami Abboud was interrupted by an assistant. Bank of America was calling and needed information.

The well-connected Miami businessman waved off the call, yet the assistant returned. The bank threatened to close his account if he didn’t get on the phone. He engaged and was asked unusually personal questions from a lender that had his business for more than a quarter century.

“Are you [expletive] kidding me? You are reconfirming my date of birth after almost 30 years? I was waiting for a profiling question,” recalled Abboud. “And I don’t know if I got it, but then she asked if I had dual citizenship. I am very upset.”

Rami Abboud is a pseudonym. His real identity is being kept private because he is a successful, high-profile businessman who rubs shoulders with Miami’s commercial elite. He fears the exposure could tarnish his reputation and cost him business.

But Abboud wanted to add his story to a steady chorus of American citizens with Middle Eastern surnames who have seen their bank accounts suddenly frozen or closed with little or no explanation or threatened with both.

Diba Mortazavi is among them. The 24-year-old medical researcher in San Diego feared her account at Chase Bank had been hacked last August when she suddenly couldn’t use her debit card. At the branch office, she said, confused employees made some calls and came back to say there had been concerns about Mortazavi’s Iranian background.

“They just went ahead without any kind of warning. They just closed my account and I found out on my own,” said Mortazavi, who arrived in the United States in August 2010 when her parents won a green card lottery and were granted residency.

Mortazavi has since become a U.S. citizen, and that’s why the bank action, almost eight years to the day of arrival, stung so much.

“It’s frankly heartbreaking. I was crying at the bank … it really just hindered my life, and it took a while to get back on track with everything,” she said.

Three weeks later she received a check from Chase for her closed account and deposited it at US Bank, where she had a joint family account. That bank had no similar concerns with her.

“I am very proud to be part of this country. I am working to go to medical school … I don’t consider myself an outsider,” Mortazavi said.

What caused the bank to shut her down without notice? She and the others were never told definitively, and banks reserve the right to cancel a customer and give no reason.

Under broad fair-lending laws, however, they don’t have the right to discriminate.

“It is what it looks like, the closure of bank accounts held by Muslims or those mistaken as Muslim. It’s Islamophobia,” insisted Gadeir Abbas, senior litigation attorney for the Council on American-Islamic Relations (CAIR), adding that “something is systematically happening that is resulting in the closure of bank accounts held by Muslims and Islamic institutions.”

A graduate of the University of California-San Diego, Mortazavi said she doesn’t have money abroad, nor does she send any overseas. Her account is tied to her work as a researcher at Rady Children’s Hospital.

A spokesman for JP Morgan Chase, after looking into Mortazavi’s complaint, acknowledged the bank erred in closing her account.

“We treat all our customers with respect and dignity and do not discriminate against anyone,” said spokesman Michael Fusco.

Mortazavi opened a savings account online, and she was mistakenly reviewed by Chase Bank as a new customer instead of an existing one. Although she had changed her address online, her driver’s license showed a different address than the existing file, and the bank sent a letter asking for proof of U.S. residency, closing the accounts after not hearing back.

Mortazavi insists she received no such letter, although the bank provided what it said was a copy.

“They had my phone number and email address on record. I receive countless emails from Chase on a weekly basis, so there is no reason why something this important could not have been communicated in these ways.

A Continuing Issue

Most of those who came forward to share their woes did so after a Miami Herald story in August that told of an Iran-born Ph.D. student, Saeed Moshfegh, at the University of Miami with a bank account frozen by Bank of America. A month earlier the Kansas City Star reported that Bank of America was asking citizenship questions of some account holders.

The stories prompted New Jersey Democratic Sen. Bob Menendez to write Bank of America CEO Brian Moynihan on Oct. 1 seeking answers. The three-page letter — cosigned by Sen. Catherine Cortez Masto, D-Nev. — demands answers about how many accounts the bank has frozen over citizenship questions, how it targets individuals from risk countries and how the bank identifies such customers from which it seeks to learn citizenship information.


In a statement to McClatchy-Miami Herald, the senator vowed to keep up pressure.

“The law is clear and there is no federal law that prohibits institutions from providing financial services, including maintaining open accounts, to non-citizens,” he said. “Bank of America’s actions, intentionally or not, have added to the environment of fear in the immigrant community and may create a resource for further targeting of immigrant communities by this administration.”

After publication, Sen. Menendez offered another statement saying his staff had met with Bank of America representatives “who assured us their actions were routine and in no way based on racial discrimination, being the last of their intentions to flame up the anti-immigrant rhetoric.

All of the complaints to McClatchy-Miami Herald came from people who did business with the nation’s largest banks, regulated by the Office of the Comptroller of the Currency, an independent division of the Treasury Department.

In a statement, agency spokeswoman Stephanie Collins said while there are no citizenship requirements to open an account at a U.S. bank, banks are required to document the identity of their customers, which can touch on questions about nationality and residence. These rules have been in place for a long time.

“The OCC has issued no new guidance on this subject,” the statement said, adding the agency doesn’t comment “on matters pertaining to particular institutions.”

Another regulator charged with combating illicit financing echoed that there has been no new guidance provided to banks.

“Financial institutions are generally required to maintain a Customer Identification Program [CIP], and the bank exam manual spells out the requirements. These basic rules haven’t changed for many years,” said Steven Hudak, spokesman for the Financial Crimes Enforcement Network, or FinCEN, part of the Treasury Department.

A spokeswoman for Bank of America said the financial giant sticks to federal guidelines.

“We don’t comment on individual customer circumstances, but we serve customers from all over the world while adhering to rigorous due diligence regulations and practices,” said Carla Molina.

What is going on?

The Trump administration’s proposed travel ban on citizens from predominantly Muslim countries raised suspicions about the bank account closures. But the problem appears to date back at least five years.

It first attracted media attention in Minnesota in early 2014, when at least 30 customers with Muslim surnames had their accounts closed by TCF Bank. The Minnesota chapter of CAIR got involved and did not get a satisfactory explanation. The problem continues with other banks, said Ellen Longfellow, a civil rights attorney in the Minnesota office.

“What happens if all the banks say no to Muslims? How can they lead an economic life?” she said.

Later in 2014, the Los Angeles Times brought renewed attention. And a year later, according to one former Obama administration official who demanded anonymity in order to discuss private meetings, there was internal disagreement among federal regulators over whether complaints about frozen accounts were legitimate.

It wasn’t until Chase Bank closed the account of a family member of a U.S. policymaker of Middle Eastern descent that there was grudging acceptance that something was happening — although the reasons later turned out to be more complicated than just citizenship.

There were people who didn’t agree that it was happening,” said the official, noting it became known in industry parlance as “de-risking” and banks frequently blamed the Treasury Department for tough know-your-customer rules and Congress and the White House for a growing sanctions list.

The latest examples are consistent with what seems to be an ongoing trend. For example, South Florida resident Khalid Mirza said in an interview that back in 2013 BB&T Bank suddenly closed the bank account of The Muslim Communities Association of South Florida, his charity.

Born in Pakistan, Mirza, 70, came to the United States in 1974. The charity learned of the action when volunteers tried to make a deposit but couldn’t.

“It was very strange,” said Mirza, a healthcare entrepreneur. “They quoted some federal law saying they could do this.”

In response, he now keeps as a precaution two bank accounts — one with Chase Bank and one with Citibank.

BB&T cited client privacy in a statement, declining to get into details.

“As a company and a culture, we embrace diversity and inclusion for all our associates and in all aspects of our business,” the statement said.

Banks feel an ever-growing list of sanctions against people and companies around the world makes it hard to keep pace with know-your-customer rules.

“We are in an environment today where regulatory expectations on risk are unclear, and due to that lack of clarity bankers have to make in many cases quick decisions on whether to continue a relationship or even start a relationship of a higher risk customer,” said John J. Byrne, former executive vice president of the Association of Certified Anti-Money Laundering Specialists. “If you make a mistake, formal criticism can and does occur.”

A former top risk manager at a large global bank, Byrne said interpretations vary across regulators and even inspectors within agencies, making for a difficult environment.

Another possibility is the complex new software used by large banks to mitigate risks in a world of ever-growing sanctions. Are customers with Middle Eastern surnames being flagged by software programs that snag them but offer little way out of the net?

“Software and datasets never make a decision to ‘exit’ their customers, it is people that do that,” said Dan Wager, vice president of financial crime compliance for LexisNexis Risk Solutions. “Banks use a wide variety of inputs. When done properly exit decisions are made based on a wide variety of inputs.”

A former financial investigator for the Department of Homeland Security, Wager cautioned against assuming there aren’t valid reasons for concern even if an ordinary customer doesn’t seem to pose risks.

“Unfortunately what’s available publicly about an individual is not the full picture. The key point is that software doesn’t make decisions … banks work through a process,” said Wager, whose

company provides banks and other corporations software tools to manage risks. “The banks exit a large number of people. You may not get the full picture if you focus just on those that hit the news.”

One murky example of that is Tamer Ibrahim.

He’s been in the United States for 40 of his 44 years, arriving before kindergarten from Egypt. Now a real-estate developer and drone-company owner in Southern California, Ibrahim said Bank of America abruptly closed two of his credit card accounts over the summer, one that he’s had since 1996.

Ibrahim is also a felon, convicted back in 2000 for being part of an international ring that smuggled the party drug Ecstasy for sale in Southern California nightclubs. He did his time, and reinvented himself as a businessman.

Was it his surname or his conviction? The bank, in a July 3 letter, told him only that “your risk profile no longer aligns with the bank’s risk tolerance.”

He’s left to wonder why he is more risky now, given that the bank never broke off business with him and that he has taken out credit with it since. He’s worried about a domino effect.

“It looks kind of suspicious in a way,” he said, noting the action might cause problems elsewhere for his business. “Why would a bank terminate a relationship with me after so many years if there is nothing going on?”

The American Bankers Association declined to discuss the cases but in a statement said lenders are under increasing regulatory scrutiny and failure to comply can result in “fines, penalties and even criminal prosecution, which explains why banks take their responsibilities in this area so seriously.”

December 27, 2018

By Kevin G. Hall and Rob Wile


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