The Department of Justice has been running a program called Operation Choke Point that pressures banks into refusing service to a variety of businesses that Eric Holder isn’t a fan of for political and other reasons.
For the past several months the program, which is headed by Attorney General Eric holder, has been trying to make sure that various legal businesses get shut down, like firearms dealers, purveyors of drug paraphernalia, pornography distributors and dating services. They’re doing it by forcing banks and other financial institutions to close both the bank and merchant accounts that these businesses have.
One of those businesses was a gun store that was owned by a couple who lives in Florida. In March they received a letter from their bank of seven years, BankUnited, letting them know that the bank was shutting down their business accounts. On top of shutting down their account out of the blue, the bank only gave the couple three days to transfer the money into an account somewhere else.
Elizabeth Liberti, one of the store’s owners, said she was “very angry” at the bank’s decision and that the people at the bank were “very inconsiderate.”
“We had all our credit cards going through that bank. All of a sudden, we had to run and find another bank to keep our business going. We shut down for two weeks, and they wouldn’t even tell us why.”
After a while of not hearing anything, Liberti finally got a response from the bank as to why their account was closed.
After clarifying that Liberti had done nothing wrong and kept her account in good standing with the bank, branch manager Ricardo Garcia wrote “Unfortunately your company’s line of business is not commensurate with the industries we work with.”
Most recently the DOJ has targeted the porn industry, and just last week an adult entertainment news outlet reported that hundreds of different porn stars had received letters letting them know their accounts were going to be terminated.
Teagan Presley told Xbiz that the letter she received told her to cancel all of her transactions, fix her automatic pay account and make sure it’s all taken care of by May 11. Upon calling them there was no debate about it either, “I called them and they told me that because I am, I guess, public and am recognizable in the adult business, they’re closing my account.”
“Even though I don’t use my account, it’s my personal account that I’ve had since I was 18, when it was Washington Mutual before Chase bought them out.”
To make matters worse, when Presley went to Bank of America to try and open another account she was denied there as well.
It’s not uncommon for banks to deny service to people in the adult film industry, however an industry attorney said “nothing like this.”
How the DOJ is going about doing this is extremely shady and abusive of their power. What they’re doing is threatening financial institutions using subpoenas, civil investigative demands, and anything else in their bag of tricks that will cost them money, according to Jason Oxman who’s the CEO of the Electronic Transactions Association.
He says it’s working exactly as intended too, “payments companies across the country are cutting off service to categories of merchants that – although providing a legal service – are creating the potential for significant financial and reputational harm as law enforcement publicizes its activities.”
Nice to know that a rogue branch of the government has this much power that they’re able to unilaterally target businesses to get them shut down in one way or another. If this isn’t a strong argument for the reduction of the size and scope of the government and its regulatory agencies then who knows what is.