It’s a mystery! The Disappearing Records of Bob Lee’s $34,000 Wells Fargo Loan

NOTE BY NORSE:   The use of prosecutorial terror to chill activism in Santa Cruz after the decline of the Occupy movement in the winter of 2011-2012 is particularly significant to homeless people.  It was at the courthouse and adjacent San Lorenzo Park campground that homeless locals, community activists, and travelers established a Sanctuary Village of their own.  It was makeshift, grubby, struggling, and plagued with all the problems homeless people usually face.    It wasn’t Middle Class Pretty.   However it provided a refuge for more than a hundred homeless folks at its height for two months (including toilet facilities–now scarce to non-existent in most of Santa Cruz).  See “Occupy Santa Cruz Helps Those Fallen Through the Cracks” at  &  “Occupy Santa Cruz Addresses Sanitation Concerns” at     It was trashed by police who gave refugees no place to go–since sleeping is illegal at night and “lodging” illegal all the time.  See “Police Raid and Destroy Occupy Santa Cruz Encampment in San Lorenzo Park” at .

by Becky Johnson (posted by Norse)
Saturday Aug 23rd, 2014 10:10 AM

One of D.A. Bob Lee’s principal demands in the Santa Cruz Eleven cases has been “restitution” to Wells Fargo Bank. Why are there “no records” of a $34,000 interest free loan to DA Bob Lee’s 2010 re-election campaign from Wells Fargo Bank? On Wednesday August 20th, Judge Steven Siegel held a hearing on a motion by attorney Alexis Briggs to uncover the records of Wells Fargo’s 2010 loan to Santa Cruz District Attorney Bob Lee. Lee has been relentless pursuing 11 activists at the cost of hundreds of thousands of dollars for a peaceful occupation of a 5 year-vacant Wells Fargo-leased bank building. 7 of the defendants, some of whom lost jobs, housing, and health because of this vendetta against the Occupy movement, had all charges dismissed after a grueling year of merry-go-round court appearances. The Final Four defendants still being hounded have been to court nearly 50 times, according to defendant Brent Adams.

Wednesday’s hearing in Judge Steven Siegel’s courtroom was a continuation of a hearing from the week before. Alexis Briggs, attorney for Cameron Laurendau of the Santa Cruz Eleven filed a motion on behalf of her client to recuse District Attorney Bob Lee from the case & have the State Attorney General take over the prosecution of the remaining four defendants.

At that hearing, a well-suited representative from Wells Fargo, Hani Ganji, appeared before the Judge to provide records, if any, of any financial relationship between the Bank & Bob Lee in the past 5 years.

In 2010, Bob Lee was running for re-election for his District Attorney for Santa Cruz County position. He submitted papers to the County elections board as required by law that he had taken out a loan from Wells Fargo Bank for $34,000. About six weeks later, he filed an addition affidavit claiming that $32,000 of the original $34,000 loan had been paid off. He also checked the box indicating that zero interest had been charged. This possible preferential treatment by the bank towards Lee prompted the motion.

DA Bob Lee was not in court, despite being the subject of the motion, and sent County Counsel, Mr. Sheinbaum, to court on his behalf, who explained that Lee “was ailing.”

The Hani Ganji told the Judge, “Wells Fargo has searched for any loans in the last five years and we didn’t find any records.”

Sheinbaum told Siegle that Lee had no records of the transaction, either, but that there was “a perfectly innocuous explanation” for the lack of records.

Siegle admitted he was “not clear how that works.” “Not only do we have no record of that loan. We have no records of any loan in the last five years.”

“It’s a mystery,” admitted Sheinbaum, “but there are several perfectly innocuous reasons for the lack of records.” When asked for even one such reason by Briggs & Defense Attorney Lisa McHaney, he did not offer a single response.

So did Lee submit fraudulent records to the County Elections department? Did Lee get a $34,000 interest-free loan from Wells Fargo and they have destroyed the records? Or even worse, did Lee get the loan & upon his victory, was gifted $32,000 8 months before he charged 11 local activists and whistle-blowers with felony charges and sought over $25,000 in “damages” from them for occupying an empty bank building, leased to Wells Fargo for three days and turning it into a community center.

Is Lee lying? Is Wells Fargo lying? Are they BOTH lying?

Upcoming, defense attorney, Brian Hackett has another hearing seeking to recuse DA Bob Lee for “misdemeanor shopping,” when Lee revealed to three defendants “There were $30,000 in damages! Come up with the money and we can talk” about reducing the felony charges to misdemeanors.”

Siegel set a continuance of the hearing for next Wednesday, Aug 27th and 9:00 AM in Department 6

(Full Disclosure: I am one of the Santa Cruz Eleven defendants. My charges were dropped in 2013 for lack of evidence)


Alexis Briggs provides more details of the hearing in a interview at (56 minutes into the audio file).

In 2012, D.A. Bob Lee was quite candid in stating it would be “a whole new ballgame” if the defendants paid off Wells Fargo: See “Impromptu Conversation Between DA Bob Lee and Two of the Santa Cruz Eleven” at reading

What is 75 River Street worth to Wells Fargo?

by Becky Johnson
December 23, 2012

Santa Cruz, Ca. —  On November 30th 2011, 100 to 200 people entered an empty bank building leased to Wells Fargo and turned it into a community center.  After 3 days, they cleaned up the building and silently departed, having made their point: Empty Building ARE the crime!  Especially in a City where over 1000 homeless people shiver in the cold each night, and hundreds of people would welcome having a space such as 75 River Street in which to open a business, a non-profit, or some City service which serves the public. Instead, we get nothing. No jobs. No services. Very little in the way of taxes. A deadspot right downtown, so central to Santa Cruz it shares a boundary with the main Santa Cruz Post Office building.

A forlorn-looking “For Lease” sign has been hanging on the north-west corner for years now. Records show that last time the building had an occupant was in 2008 when Wells Fargo “merged” with the locally-owned Coast Commercial Bank. As of this date, its been empty for four years and counting.

Here is why we shouldn’t expect this building to have a tenant anytime soon, especially not at the $28,790/mo. asking rent. You see, the ACTUAL rent Wells Fargo is paying to property owner, Barry Swenson Properties, is $37, 714.90/month. Rentals of commercial properties in downtown Santa Cruz are extremely costly, but even so, no one has rented this space at only 76% of its actual cost.

To understand why Wells Fargo continues this practice, one must understand how banks work. This isn’t the easiest of tasks as bank practices are shrouded in mystery, with all disputes settled in mediation and not subject to criminal prosecution or public record. However, back in the early ’90’s, the Federal Reserve Bank of Chicago published a helpful pamphlet called “Modern Money Mechanics.” While currently out of print, some enterprising person photo-copied it and helpfully posted it online here.

Here is undoubtedly what Wells Fargo is doing with the property at 75 River Street.

Taking the higher amount (the ACTUAL rental cost) of $37, 714.90/mo. we multiply this by 12 so we can determine the yearly value/cost of the lease = $452,578.80/yr

This value is added to Wells Fargo‘s portfolio as an asset with a dollar value, whether it is rented out or not. According to the rules of the Federal Reserve fractional banking system, WF must keep 1/10th on hand and can lend out 9/10ths of the value to its customers in the form of home, car, and business loans. Therefore, the $452,578.80 becomes the 1/10th and WF legally places 9/10ths of that amount into its general accounts, manufacturing that amount completely out of thin air.

Wells Fargo now has $4,073,209.20 to lend out to you and to me. EVERY YEAR!

Cumulative expansion in deposits on initial deposit of $10,000 over several stages resulting in over $95,000 after 20 stages under Federal Reserve fractional banking system. –From Modern Money Mechanics

They get to keep all of the interest made too.

Out of  this inflated amount they pay Barry Swenson Properties $452,578.80 a year rent. He pays the property taxes of $40,000/yr. netting a profit of $412,578.80 per year on the vacant building.

Wells Fargo is now $3,620,630.20 to the good for just one year. This exceeds the asking rental amount of $345,480.00/yr rental income they would get if they actually rented it out to a tenant. Since the property is NOT rented, WF is probably deducting either the lower amount or the higher amount of $452,578.80/yr as a LOSS to offset profits elsewhere in their portfolio.

Now if Wells Fargo has any kind of relationship with any other bank, let’s just say Bank of America, since they have a legal relationship with any bank registered with the Central Banking system of the United States, including BofA. They can “lend” the lease to B of A as a “Stage 2” deposit (minus the 10% WF keeps in its reserves).  So  B of A then takes the $4,073, 209.20 WF has available to loan.

Since they too are a bank, they can keep 10% as reserves so that THEY can now lend out $36,658,881 keeping the $4,073,209.20 “in reserve”. B of A can now “lend” this amount to another Central Bank, say Chase as a “Stage 3” deposit and they can inflate the amount by nine-fold as well. And this is how money is created.

Why do bankers get to manufacture all this money out of thin air? Because of the Federal Reserve System which was established in 1913.  Why do we allow bankers to profit so immensely while leaving “dead spots” in our community? I guess because no one can believe what the enormity of their crimes.

Currently I am facing 4 charges leveled by Wells Fargo against 11 local activists, Occupy Santa Cruz members, and alternative media journalists. I am accused of felony conspiracy to trespass and felony conspiracy to vandalize the empty building at 75 River Street, as well as 2 misdemeanor counts of trespass and vandalism.  You see, as a homeless activist, I believe these buildings should be used for housing, businesses, non-profits, or community services. With homeless people dying on our streets, Empty Building ARE the Crime! While I am innocent of these charges, I considered the 3-day occupation of the building to be a righteous act drawing attention to an injustice occurring right in our community.

In addition, Wells Fargo has cooked up enormously overblown charges of $26,000 in “damages” for which they have submitted billing sheets. Of the 9 contractors WF used, not a single one was from Santa Cruz County, including rekeying the entire building using a locksmith in Foster City and getting broken furniture removed and taken to the dump by a contractor in San Leandro, California. In fact, these invoices for “damages” mirror the trumped-up documents Wells Fargo uses as assets to charge you and me REAL money.

But until the fractional banking reserve system is reformed, we will see no changes. Empty buildings surround every bank we see. And indeed, in Santa Cruz, they are everywhere.

As You See It: Foreclosure rules needed

by Dean Oja, Boulder Creek
Santa Cruz Sentinel Aug. 15, 2012

What the supervisors of Santa Cruz County should do, like you said in “County tables housing rules,” is make the banks show that they have the title to a home before the county issues them a notice of default. As it is now, the bank just comes in and ask the recorder of the notice of default and they get it, without showing any documentation that they legally own the property. Nevada did this and foreclosures have been reduced to half as many as before.

Banks also do not have to pay a transfer tax like everybody else when we buy property. In San Francisco, the supervisors are voting on Nov. 8 to make the banks pay this fee because the title is being transferred.

My question is, do the banks have to pay property tax on the house after they take it back, and if not, why? They should have to pay the property tax for the same amount as the foreclosed owner was until the house is sold.

If you are being foreclosed on or heading that way go to — Home Owners for Justice — and see if they can help.

Let’s prosecute the bankers for fraud for the “robo-signing” that was happening and might still be happening.

This was mass fraud against the people. We could probably use RICO laws due to the mass conspiracy of defrauding the public and the courts, but nobody in the Justice Department seems to think it is a good idea to bite the hand that feeds you.

Family Net Worth Drops to Level of Early ’90s, Fed Says

NY Times – June 11, 2012

WASHINGTON — The recent economic crisis left the median American family in 2010 with no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity, the Federal Reserve said Monday.

Andrew Harrer/Bloomberg News

A house for sale in Washington. Falling home prices accounted for three-quarters of the losses in net worth.

A hypothetical family richer than half the nation’s families and poorer than the other half had a net worth of $77,300 in 2010, compared with $126,400 in 2007, the Fed said. The crash of housing prices directly accounted for three-quarters of the loss.

Families’ income also continued to decline, a trend that predated the crisis but accelerated over the same period. Median family income fell to $45,800 in 2010 from $49,600 in 2007. All figures were adjusted for inflation.

The new data comes from the Fed’s much-anticipated release on Monday of its Survey of Consumer Finances, a report issued every three years that is one of the broadest and deepest sources of information about the financial health of American families.

While the numbers are already 18 months old, the survey illuminates problems that continue to slow the pace of the economic recovery. The Fed found that middle-class families had sustained the largest percentage losses in both wealth and income during the crisis, limiting their ability and willingness to spend.

“It fills in details to a picture that we already knew was quite ugly, and these details very much underscore that,” said Jared Bernstein, an economist at the Center on Budget and Policy Priorities who served as an adviser to Vice President Joseph R. Biden Jr. “It makes clear how devastating this has been for the middle class.”

Given the scale of those losses, consumer spending has remained surprisingly resilient. The survey also illuminates where the money is coming from: American families saved less and only slowly repaid debts.

The share of families saving anything over the previous year fell to 52 percent in 2010 from 56.4 percent in 2007. Other government statistics show that total savings have increased since 2007, suggesting that a smaller group of families is saving more money, while a growing number manage to save nothing.

The survey also found a shift in the reasons that families set aside money, underscoring the lack of confidence that is weighing on the economy. More families said they were saving money as a precautionary measure, to make sure they had enough liquidity to meet short-term needs. Fewer said they were saving for retirement, or for education, or for a down payment on a home.

The report underscored the limited progress that households had made in reducing the amounts that they owed to lenders. The share of households reporting any debt declined by 2.1 percentage points over the last three years, but 74.9 percent of households still owed something, and the median amount did not change.

The decline in reported incomes could have increased the weight of those debts, tying up a larger share of families’ take-home pay. But one of the rare benefits of the crisis, historically lower interest rates, has helped to offset that effect. Families also have been able to reduce debt payments by refinancing into mortgages with longer terms and deferring repayment of student loans and other obligations.

The survey also confirmed that Americans are shifting the kinds of debts they carry. The share of families with credit card debt declined by 6.7 percentage points to 39.4 percent, and the median balance fell 16.1 percent to $2,600.

Families also reduced the number of credit cards that they carried, and 32 percent of families said they had no cards, up from 27 percent in 2007.

Conversely, the share of families with education-related debt rose to 19.2 percent in 2010 from 15.2 percent in 2007. The Fed noted that education loans made up a larger share of the average family’s obligations than loans to buy automobiles for the first time in the history of the survey.

The cumulative statistics concealed large disparities in the impact of the crisis.

Families with incomes in the middle 60 percent of the population lost a larger share of their wealth over the three-year period than the wealthiest and poorest families.

One basic reason for this disproportion is that the wealth of the middle class is mostly in housing, and the median amount of home equity dropped to $75,000 in 2010 from $110,000 in 2007. And while other forms of wealth have recovered much of the value lost in the crisis, housing prices have hardly budged.

Those middle-income families also lost a larger share of their income. The earnings of the median family in the bottom 20 percent of the income distribution actually increased from 2007 to 2010, in part because of the expansion of government aid programs during the recession. Wealthier families, which derive more income from investments, were also cushioned against the recession.

The data does provide the latest indication, however, that the recession reduced income inequality in the United States, at least temporarily. The average income of the wealthiest families fell much more sharply than the median, indicating that some of those at the very top of the ladder slipped down at least a few rungs.

Ranking American families by income, the top 10 percent of households still earned an average of $349,000 in 2010.

The average net worth of the same families was $2.9 million.

The Long Foreclosure Fight

Good Times, Wednesday, 23 May 2012 – Patrick Dwire

news1County supervisors urge banks to suspend foreclosures

The state legislature is broken. Not only is it broken, but it has also prevented local governments from doing what can’t seem to get done in Sacramento—such as providing homeowners with legal protection from banks conducting fraudulent foreclosures. That was the consensus of the Santa Cruz County Board of Supervisors at their May 15 meeting, when they adopted a resolution “urging” (but not requiring) local banks to suspend foreclosures until beefed-up, borrower protection laws are passed by the state legislature. The laws are known collectively as the “California Homeowner’s Bill of Rights.”


The county’s resolution, which is almost identical to a resolution adopted by the City and County of San Francisco last month, falls far short of what many housing activists believe is necessary. They would prefer to see the county mandating an outright moratorium on foreclosures until a program of independent legal review and certification of legality is established.

County Counsel Dana McCrea advised the Board of Supervisors that authority to mandate such a moratorium or require more stringent legal review in the foreclosure process is “almost entirely” preempted by current state law, and the county would almost certainly be sued, probably successfully, if it were to adopt such measures.

“This speaks directly to why people have so little faith in government,” Supervisor John Leopold said at the May 15 board meeting, explaining his frustration with the “lack of legal space” at the county level to seriously challenge banks on potentially fraudulent foreclosure practices.

“Not only is the banking lobby making the likelihood of passing the California Homeowner’s Bill of Rights very, very low in Sacramento—it comes as no surprise to me that these same moneyed interests have had their way preempting local government from initiating their own, more stringent local protections,” Leopold said.

Apart from the fact there are between 100 and 150 foreclosure filings per month in Santa Cruz County, there are two other developments that have enraged local activists and inspired the pressure they have brought to bear on local politicians for more protection against fraudulent foreclosures. The first is a forensic audit of 382 foreclosures conducted by the City and County of San Francisco Assessor-Recorder that found 82 percent of the foreclosure cases studied were legally defective, with at least one clear violation of law, and a majority had substantial evidence of fraud, including back-dated, “robo-signed” or fabricated documents, as well as false claims of beneficiary status.


news1-2Since the March to Stop Foreclosures (above), which was led by Occupy Santa Cruz’s Foreclosure Working Group in March, the number of local groups and organizations joining in the effort to end the foreclosure crisis continues to grow.

The second development is the drastic reduction in foreclosures in Nevada that are a direct result of a new state law requiring a notarized affidavit of authority, signed by a bank official, as a requirement of filing a foreclosure, along with clear documentation of the bank’s legal right to foreclose. The law includes severe criminal penalties for any fraud. This state law reduced foreclosure filings in Nevada, formally the nation’s leader in foreclosures, by 76 percent since the law took effect last October, according to Foreclosure Radar, a foreclosure data research firm.

“In light of the City of San Francisco’s Assessor’s report,” Supervisor Ellen Pirie said, “I’m incredibly frustrated and angry… I’m shocked that our legal system, which allows banks to foreclose without judicial review but seems to allow these fraudulent activities without any real supervision, and there’s nothing we can do about it. I don’t understand why our state legislators are not as angry as we are, and [aren’t] more willing to do something about it.”

The supervisors aren’t the only ones angry about the recent, stepped-up lobbying against the California Homeowners Bill of Rights by the banking industry in Sacramento. So is Gina Green, a spokesperson for the Center for Responsible Lending (CRL), a nonprofit advocacy organization that has been a leader in the fight against predatory lending to low-income communities. After more than three years of hard work advocating for borrower protections in the mortgage industry—protections now included in the California Homeowners Bill of Rights—Green said the frustration is high at CRL because this legislation is getting blocked by a few, key members in the state assembly and senate, both Democrat and Republican, who she says have apparently come under the influence of the banking lobby.

Green says CRL is “ready to take the gloves off, and start naming names of those members in the state legislature who are blocking the California Homeowners Bill of Rights legislation.” She goes on to say that this legislation is desperately needed, as shown by the extent of fraudulent practices brought to light in the nationwide law suit brought by 49 State Attorney Generals against five major banks last year, in which banks finally settled for $24 million in damages in February. But the banking industry continues to have a “near lock of influence in the California State legislature,” Green says.

Growing Grass Roots

Jeri Bodemar, a self-described “old activist” and member of the Santa Cruz Women’s International League for Peace and Freedom (WILPF), says the foreclosure crises just “grabbed her.” As a result, she started doing outreach and organizing and began talking to Joy Hinz, a lead activist and organizer of the local Occupy Foreclosure Working Group.

Hinz, along with several members of the working group that originally spun off from Occupy Santa Cruz, have been attending County Board of Supervisor meetings regularly for the last several months, and encouraging the supervisors during Oral Communications to take action to protect families from foreclosure.

Meanwhile, Bodemar was impressed by a KPFA radio show featuring C.J. Holmes, the founder of Home Owners For Justice, a nonprofit organization waging a statewide information and organizing campaign to stop foreclosures. Bodemar and Hinz invited Holmes, who is also a long time Sonoma County real estate broker, to Santa Cruz, and co-sponsored a recent training workshop and public information event about fraudulent foreclosures practices.

In addition to a training workshop for “citizen fraud investigators,” in which about 10 people were given an overview of what expert foreclosure fraud investigators look for, Holmes gave a three hour presentation to about 50 people at the Quaker Meeting House the evening of May 15, the same day the county supervisors adopted the foreclosure ordinance.

Holmes provided an in-depth analysis of how much the mortgage lending industry has changed over the course of her 25-year career in real estate brokerage, and showed that most of this change, made obvious by the combined Wall Street financial crises and collapse of the real estate market, has been for the worst. Holmes provided a fast but deeply researched summary of how the relatively safe, stodgy, local mortgage lending industry of 30 years ago was transformed into a Wall Street investor-driven casino of mortgage-backed securities, with players from all over the world.

One of the bottom lines, according to Holmes, is that the lack of accountability of banks in the foreclosure process is directly liked to the lack of accountability in the securitization of mortgage-baked securities sold on Wall Street, which was made technically possible by the industry created “MERS” recording system. Because the market crashed so hard and so fast, according to Holmes, banks had to resort to “extra-legal” techniques like robo-signing and forging documents to keep up with foreclosures once the “house of cards” began to collapse.

A key problem that Holmes said should be a “take away” from her talk was that the system continues to collapse, with a huge inventory of unsold, bank-owned homes, and that the idea that housing market will eventually stabilize under these conditions is misguided.

“It’s time for us to get out of the box that banks have put us in,” Hinz said after the presentation. “The banks have been setting us up for years, and gaming the system every step of the way. People are beginning to wake up and realize what’s been done to them, and realizing they can’t win playing by the banks rules.”