Capital One Says Money Laundering, Not January 6 Riot, Led To Shutdown Of Trump Accounts

from the be-careful-what-you-wish-for dept

I don’t know but when your best argument is “we got locked out of our accounts for supporting violent insurrectionists,” maybe it’s time to stop arguing.

But if there’s anything Trump likes, it’s being a plaintiff in a lawsuit. So, that’s exactly what the Trump Organization argued, in hopes of pressuring Capital One into a presumably hefty settlement.

The case centers on roughly 385 accounts tied to the Trump Organization, Eric Trump and a collection of affiliated businesses — including a winery, a bottled-water company and a golf course developer — that banked with Capital One for more than a decade before the accounts were shut down in mid-2021.

In an amended complaint filed earlier in July, the Trump-affiliated companies insisted the closures had nothing to do with financial crime or money-laundering, but everything to do with politics.

The Trump Organization alleges Capital One moved to distance itself from Donald Trump after the Capitol riot and that the bank’s cited anti-money-laundering rationale was invented after the fact to cover for that decision.

If you need a reason to “distance” your company from persons or organizations, that’s a pretty good reason. If you’ve chosen to align yourself with violent insurrectionists and rely on them for financial support, then it’s pretty much “you’ve made your bed, now please take your business elsewhere.”

But what Capital One is alleging in its response to the Trump Organization’s lawsuit somehow makes the Trump Organization look even worse than it did when it first filed its lawsuit alleging some weird form of political persecution.

According to Capital One’s motion to dismiss [PDF], this had nothing to do with acts that were unsavory (buddying up with violent insurrectionists) and everything to do with stuff that is indisputably illegal, rather than merely unseemly.

The SAC [second amended complaint] concedes that Capital One’s decision to terminate the accounts was expressly permitted by the governing agreement and instead rests on vague allegations of political discrimination that are not supported by any of the documents attached to the SAC. To the contrary, those documents and Plaintiffs’ own allegations make clear that Capital One closed Plaintiffs’ accounts for anti-money laundering (“AML”) reasons. The closures were the result of months of analysis and a careful review by Capital One’s AML team in accordance with bank policies and regulatory guidance. Capital One never publicized the termination decision nor its confidential internal process giving rise to the closure, and it permitted Plaintiffs several months (and granted several extensions) to find new banking services, which they did.

It wasn’t because you guys wanted to destroy democracy! It’s because you seemed like you were engaged in actual crimes!

In any event, as Trump and his Trumpians surely know, private companies can terminate accounts at a moment’s notice for any reason they choose to do so. That’s the bargain consumers agree to when utilizing corporate services. Just because it happens to you doesn’t make it immediately actionable. If you don’t like the terms of the agreement, don’t agree to it. Take your business elsewhere. Otherwise, deal with it and take your business elsewhere when you’re told this particular place of business is no longer an option.

But let’s not lose sight of the main thing here. The Trump Organization walked into court insisting it was the victim of “political discrimination.” Now, the organization is facing the considerable possibility of limping out of court looking like the grifters we’ve always assumed them to be.

And claiming Capital One had a legal obligation to tell the Trump Organization it was being investigated for suspected money laundering does nothing but allow Capital One to permanently link the organization to money-laundering allegations on the public record. No one suspected of criminal activity is due a head’s up, whether it’s from a private entity or a government agency.

As Capital One points out, no matter whose name is on the letterhead, the institution’s obligations during this money laundering investigation were to the government, not to the aggrieved party hoping to turn this into a paycheck.

Plaintiffs’ argument that Capital One should have proceeded with the contractually-permitted termination process differently and given Plaintiffs an opportunity to explain suspicious transactions fails for the additional reason that Capital One had no duty to do so. As a federally regulated financial institution, Capital One is subject to the Bank Secrecy Act (“BSA”) and its implementing regulations, under which a bank’s BSA-mandated compliance obligations are “owed to the United States and not private bank customers.”

The Trump Organization now has multiple self-inflicted gunshot wounds in its feet. It could stop the bleeding by conceding defeat and agreeing to the dismissal. But if history has proven anything, it’s that Trump never knows when to stop. And while this isn’t Trump himself suing, it’s safe to assume the Trump Organization won’t accept defeat. But it probably should. If it insists on keeping this case alive, there’s a good chance some more rounds of discovery will be necessary. And when that happens, all the details supporting Capital One’s money laundering investigation are going to come out. I, for one, hope this litigation survives this motion to dismiss.

Filed Under: corruption, debanking, donald trump, insurrection, january 6, money laundering, political violence, trump administration

Companies: capital one, trump organization