HOUSE OF CARDS

HOUSE OF CARDS

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When good men do nothing, evil triumphs!


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Sin of Omission

An open letter to the Pittsburgh Grand Jury convened on March 10, 2009:

Justice Department statistics recently obtained by Legal Times, which reveal that 99.9 percent of the defendants called before federal grand juries are indicted, buttress the belief -- and concern -- that prosecutors today almost always get what they want from a system originally set up to protect citizens from governmental overreaching.

"The grand jury, as we now know it, is a foolish anachronism," says Arnold Burns, who was deputy attorney general in the Reagan administration and currently serves on a National Association of Criminal Defense Lawyers task force to change the grand jury system. "It is 100 percent in the control of the prosecutor."

Within days after the US Attorney in Pittsburgh received a certified letter from me charging her office with conspiring with American Express to conceal criminal activities, making suspicious deals even before a formal investigation and ignoring terrorism, you indicted me on Mail and Wire Fraud. A phone call from the USPS lead investigator convinced me that my letter set off this "quickie-rubber stamp" Indictment.

Damages - The alleged $545,291 debt owed American Express: Bank records clearly demonstrate that hundreds of thousands of dollars due me had been unjustly held hostage by American Express to offset one of my client's unpaid debt, not a penny of which I owed or received. However, a combination of coercion by American Express and personal responsibility forced me to borrow to pay at least part of their debt.

I not only borrowed to pay back all fees earned from my two year association with that client, in essence, I also paid all money withheld by American Express plus a number of uncovered cons by American Express employees to increase profits and commissions. American Express, in writing, admitted to withholding what amounted to $170.000, but whether it was $170,000 admittedly withheld or $170,000 in uncovered cons by American Express employees, my borrowing costs were upsetting.

Of the $481,395 borrowed from Compass Bank in Wilmerding, $170,000 represented 35%. After 40 months, I paid out $42,377. In addition, 35% of the in-place judgment ($179,273) and 35% of the ongoing interest ($15,945) added another $195,218. To that, I lost the proportionate liquidity value of the church building securing the $481,395 and the $90,000 lost railroad inventory housed in the building; totaling $171,500. Grand total is $579,095; all because American Express failed to credit $170,000 early on.

If American Express had timely paid me what it withheld, there would have been no debt in the first place.

The Scheme: Every time American Express invoiced without first crediting the $170,000 they owed, they not only charged unearned services fees of 2.95%, they fraudulently invoiced for debt not owed. In reality, their invoices were false. As a result, we were continually forced to invoice American Express for cash to cover their sham invoicing scheme. In other words, every time we invoiced a credit card, in reality we obtained cash to cover bills that would have been otherwise paid had American Express timely paid what it owed. We also had to cover unearned merchant service fees, admittedly fraudulent set up and ongoing service charges, and the cost at Compass Bank to borrow what American Express withheld.

You ignored my Documented Findings: For six years, I have repeatedly written about my findings:

1. I exposed American Express for encouraging credit card laundering, factoring and mail fraud. A client of mine had credit lines six times monthly revenues due in full each month; a by-product of relaxed lending standards in an apparent effort to bolster profits and commissions. Any fifth grader will tell you that no one can pay six times what one receives. American Express promoted credit lines created to fail, yet make the bank lots of money. But, charging 3% each month on inflated credit lines can influence anyone to promote and prolong this transparent scheme of greed. When my client proved unable to pay, American Express blamed them. By this action, American Express increased losses, thereby cheating its shareholders. In late 2007, American Express was fined $65 Million for money-laundering violations.

2. As this appeared to be a transparent scheme to defraud, and it used the mail and telephone, I accused American Express of mail and wire fraud; a charge that haunted me 5 years later.

3. I wrote American Express accusing them of dealing with suspected terrorists, a charge I substantiated.

4. I accused American Express of corruption within the ranks of its sales department, both card and merchant accounts, providing written instances. Despite my exposure, American Express never once acknowledged my concerns or the fact that I lost hundreds of thousands by these actions.

5. I blew the whistle that American Express conducted business through a "Left Hand - Right Hand" business philosophy. On one hand, commissions motivate its sales and merchant account departments to do whatever is necessary to market products and services. On the other hand, risk and legal, to protect the corporate image and guard against SEC intervention, monitor activities generated by the sales departments.

6. This double-dealing philosophy initiated a "Red Flag" list that American Express customers might follow to fly under the radar of risk and legal.

7. With suspicious lending standards, I wrote extensively about the likelihood that American Express was a "House of Cards"and a "Money Tree" from which anyone with criminal intent could profit.

There was no scheme on our part; no payments to do a scheme. The cost to fabricate a scheme and then have to defend an Indictment may end up exceeding $250,000, not including loss of reputation, career, business, credit and assets. That's not justice: That's malicious prosecution, conspiracy and fraud.

... Richard Shumaker

Mail and Wire Fraud

In that American Express withhold money, falsely billed me, and deceptively enticed me to re-open corporate credit and merchant services accounts, it perpetuated a fraudulent scheme. By using the mail and wire to perpetuate this scheme, American Express once more committed mail and wire fraud.

... Richard Shumaker

Mary Beth Buchanan, former US Attorney

In my case, she stepped over billions to pick up pennies ... that weren't even there.

... Richard Shumaker