Everett Stern

Everett Stern is a CEO and 2016 United States Senate candidate, known as a whistleblower in the HSBC money laundering scandal. He uncovered billions of dollars of illegal money laundering transactions which led to an SEC investigation and a $1.92 billion fine against HSBC in 2012.^[1]

Early life, education, and early career

Stern was born in New York City, New York, the son of Cheryl Ellen Schwam of The Bronx and Henry J. Stern of New Jersey. After moving several times, the family settled in Wellington, Florida where Stern attended Wellington High School. He received a BA degree from Florida Atlantic University in 2008.^[2] After being rejected for a position with the CIA, Stern earned an MBA from Stetson University in 2010.^[3] After working at HSBC for 13 months in 2010-2011 , Stern went on to found Tactical Rabbit, Inc. in 2012, a private intelligence company based in Pennsylvania.

HSBC scandal

After graduating from Stetson, Stern took a position as an AML compliance officer for HSBC in their New Castle, Delaware office in October 2010, where he monitored the bank's Middle Eastern transactions. After coming across many suspicious transactions tied to terrorist groups in the Middle East such as Hamas and Hezbollah, he repeatedly alerted his supervisors, who ignored his warnings.^[4] Specifically, he uncovered a multinational money-laundering network that generated millions for Hezbollah through the Lebanese brothers Ali, Husayn, and Kassim Tajideen through their Gambia-based company, Tajco Ltd.^[5] After several such episodes, Stern made contact with the FBI and CIA, which began to investigate HSBC. He left work at HSBC in November 2011.^[1] By the summer of 2012, the inquiry had broadened to the bank’s money laundering operations in the Middle East, Mexico, Iran, Sudan, and North Korea.^[6] A July 2012 congressional report found that from 2001 through 2010, HSBC had “exposed the U.S. financial system to a wide array of money laundering, drug trafficking, and terrorist financing risks due to poor anti-money laundering controls.”^[7] In December 2012, HSBC came to a settlement with U.S. authorities which required it to pay a record $1.92 billion fine, as well as improve its anti-money laundering controls, in exchange for a deferment of criminal prosecution for five years.^[8][9]

Post-HSBC career and further allegations

Stern left HSBC in October 2011, and began working at a P.F. Chang’s restaurant as a server^[10] before starting private intelligence firm Tactical Rabbit in the following year. In March 2013, Stern and the law firm Berger & Montague submitted evidence collected by Stern to the SEC that HSBC had continued to violate anti-money laundering regulations through October 2011, when Stern’s employment with HSBC ended.^[10] In August 2013, Stern joined with an Occupy Wall Street working group called Alternative Banking to further publicize his allegations against HSBC.^[11][12] At a protest held on August 29, 2013 in New York City, Stern publicly alleged that HSBC had committed anti-laundering violations through the end of his employment in 2011, and asked that the government re-open the case against HSBC.^[10][13][14]

In December 2013, HSBC reached a settlement with the U.S. Treasury’s Office of Foreign Assets Control regarding funds that had been transferred to financiers of the terrorist organization Hezbollah between December 2010 and April 2011. HSBC was required to pay $32,400. The Treasury department stated that this settlement was “unrelated to the bank’s December 2012 agreement.”^[15] Stern has continued to speak publicly through the media about his HSBC allegations, especially as they relate to the funding of terrorist groups and activities.^{[16][17][18][19][20]}

In June 2014, Stern and his company investigated the potential merger between Sprint and T-Mobile. He suspected the proposed merger would make the market “more cooperative than competitive” and allow prices to be more easily regulated. Because of the potential for antitrust law violations, Tactical Rabbit accurately predicted the merger would not succeed.^[21]

In August 2014, Stern announced an investigation of Students for Justice in Palestine, a student organization found in colleges across America. He reported his findings to federal law enforcement after his company's investigation indicated possible Hamas financing.^[22]

In September 2014, his company launched an investigation into JPMorgan Chase & Co. Stern and his company reported to regulators that JPMorgan was violating Office of the Comptroller of the Currency (OCC) and Bank Secrecy Act (BSA) regulations.^[23]

In March 2015, Tactical Rabbit launched an investigation into LifeLock, Inc. Stern commented that he believed "LifeLock has not simply made false advertising claims, but has criminally ascertained critical and sensitive information of its customers under false pretenses."^[24]

In May 2015, Stern announced an investigation into the closing of Sweet Briar College. Stern held a press conference on May 9, 2015 at the College and alleged that the companies' intelligence operation revealed fraud.^[25] Stern pleaded for the American public and the FBI to get involved. Stern noted that "Saving Sweet Briar is not a Virginia problem, but it is a national problem requiring all Americans to act." In May 2015 Stern issued a public letter to FBI Director James Comey asking for an FBI investigation into his company's findings on the closing of the College.^[26][27][28]

Political career

In the fall of 2013, Stern worked with Maxine Waters, D-CA, ranking Democrat on the House Financial Services Committee, on the “Holding Individuals Accountable and Deterring Money Laundering Act,” which sought to give the Financial Crimes Enforcement Network the authority to litigate on its own, and to stiffen penalties and prison sentences for bank executives involved in money laundering.^[29][30][31]

In February 2014, Stern, a Republican, announced he was running for Pennsylvania's 13th congressional district in the 2014 elections.^[32][33] He withdrew from the race before the April 2014 filing deadline.^[34] In April 2015, Stern announced his candidacy for United States Senate as the Republican candidate from Pennsylvania, challenging incumbent Pat Toomey for the seat in the 2016 election.^[35]

References