SAN FRANCISCO, March 12, 2024 — Silicon Valley Bank (SVB), a division of First Citizens Bank and financial services provider to some of the world's most innovative companies and investors, today announced the opening of its new office in downtown San Francisco. Located at 222 2nd Street, the updated space features modern workspaces as well as an event room and outdoor terrace for meetings with clients and innovation economy partners.

“SVB has enjoyed being part of the innovation community for 40 years and we are excited to continue serving Bay Area founders and investors from our vibrant new location in the city,” said Marshall Hawks, SVB senior market manager in San Francisco. “Our customers value our ability to bring our ecosystem partners together, and our new office event space enables even more of that connection.”

This investment from SVB and parent company First Citizens in San Francisco supports the bank's growth objectives and continued commitment to serving the innovation economy. SVB has been actively serving the innovation economy since it was taken over by First Citizens in March 2023. With 40 years of experience, SVB has more experience serving innovation clients than any other financial services provider. The entire business is designed specifically for high-growth companies and investors and delivered at the speed they need. SVB remains committed to the success of the investors and innovators who are inventing the future and now has the full support of the 125-year-old First Citizens Bank to continue pursuing this mission.

SVB will occupy several floors of the building and will move from its office at 505 Howard Street just a block away. SVB has a flexible hybrid work policy, so the space is equipped with numerous collaboration areas as well as private video conferencing areas for hybrid working.

The new office also includes more than 6,000 square feet of entertainment space for events. SVB is known for hosting events that bring the innovation economy together. In the last three quarters of 2023, SVB held or sponsored more than 400 events nationwide. The SVB Experience Center at 532 Market Street will continue to be used for customer events.

SVB has had a presence in San Francisco for 25 years since opening its first office at 185 Berry Street in China Basin in 1999. In addition to the San Francisco office, SVB has Bay Area offices in Menlo Park, Palo Alto and Santa Clara.

About Silicon Valley Bank

Silicon Valley Bank (SVB), a division of First Citizens Bank, banks some of the world's most innovative companies and investors. SVB provides commercial and private banking to individuals and companies in the technology, life sciences and healthcare, private equity, venture capital and premium wine sectors. Operating in innovation centers across the United States, SVB serves the unique needs of its dynamic clients with deep industry knowledge, insights and connections. SVB's parent company, First Citizens BancShares, Inc. (NASDAQ: FNCCA), is one of the 20 largest U.S. financial institutions with more than $200 billion in assets. First Citizens Bank, member FDIC. Find out more at svb.com.

Media contact 

Katie Ellis Fredlund

kellis@svb.com

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The office has event rooms for customers from the innovation economy

SAN FRANCISCO, March 12, 2024 /PRNewswire/ — Silicon Valley Bank (SVB), a division of First Citizens Bank and a financial services provider to some of the world's most innovative companies and investors, today announced the opening of its new downtown office San Francisco. Located at 222 2nd Street, the updated space features modern workspaces as well as an event room and outdoor terrace for meetings with clients and innovation economy partners.

Silicon Valley Bank today announced the opening of its new office in downtown San Francisco. Located at 222 2nd Street, the updated space features modern workspaces as well as an event room and outdoor terrace for meetings with clients and innovation economy partners.

“SVB has enjoyed being part of the innovation community for 40 years and we are excited to continue serving Bay Area founders and investors from our vibrant new location in the city,” he said Marshall HawksSVB Senior Market Manager San Francisco. “Our customers value our ability to bring our ecosystem partners together, and our new office event space enables even more of that connection.”

The San Francisco The investment by SVB and parent company First Citizens supports the bank's growth objectives and its ongoing commitment to serving the innovation economy. SVB has been actively committed to the innovation economy since it was taken over by First Citizens in 2011 March 2023. With 40 years of experience, SVB has more experience serving innovation clients than any other financial services provider. The entire business is designed specifically for high-growth companies and investors and delivered at the speed they need. SVB remains committed to the success of the investors and innovators who are inventing the future and now has the full support of the 125-year-old First Citizens Bank to continue pursuing this mission.

SVB will occupy several floors of the building and will move from its office at 505 Howard Street just a block away. SVB has a flexible hybrid working policy, so the space is equipped with numerous collaboration areas as well as private video conferencing areas for hybrid working.

The new office also includes more than 6,000 square feet of entertainment space for events. SVB is known for hosting events that bring the innovation economy together. In the last three quarters of 2023, SVB held or sponsored more than 400 events nationwide. The SVB Experience Center at 532 Market Street will continue to be used for customer events.

SVB was represented in San Francisco for 25 years, since opening its first office at 185 Berry Street in China Basin in 1999. In addition to the San Francisco Office, SVB has offices in the Bay Area Menlo Park, Palo Alto and Santa Clara.

About Silicon Valley Bank
Silicon Valley Bank (SVB), a division of First Citizens Bank, banks some of the world's most innovative companies and investors. SVB provides commercial and private banking to individuals and companies in the technology, life sciences and healthcare, private equity, venture capital and premium wine sectors. SVB is continuously active in innovation centers The United StatesWe serve the unique needs of its dynamic customers with deep industry expertise, insights and connections. SVB's parent company, First Citizens BancShares, Inc. (NASDAQ: FCNCA), is among the 20 largest U.S. financial institutions with more than 200 billion dollars in assets. First Citizens Bank, Member FDIC. Find out more at svb.com.

SOURCE Silicon Valley Bank

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The Ambassador Hotel houses 134 residents, serves as critical affordable housing

NORTHAMPTON, MA / ACCESSWIRE / November 22, 2023 / U.S. Bank

The Ambassador Hotel was built in 1911 and is on the National Register of Historic Places. (Photo by Toolbox Video Services)

Originally published on U.S. Bank company blog

The historic Ambassador Hotel has played a role in San Francisco’s history for 112 years, including serving as an informal hospice during the 1980s and 1990s AIDS crisis, and housing low-income individuals today.

Time along with wear and tear left the building in need of a comprehensive rehab, and San Francisco’s Tenderloin Neighborhood Development Corp., which acquired the Ambassador in 1999, is in the midst of a such a rehab project, which includes funding from U.S. Bancorp Impact Finance.

Impact Finance invested $67 million in Low-Income Housing Tax Credits (LIHTC) and provided a $71 million construction loan. It instituted a financial structure involving LIHTCS that included tax exempt and taxable construction financing.

“The Ambassador Hotel holds a rich and cherished history in the heart of San Francisco, particularly among the Tenderloin community,” said TNDC CEO Maurilio Leon. “During the 1980’s and 1990s, it served as a vital sanctuary for numerous AIDS patients, extending compassion and support to those who were without the means to care for themselves or connect with support networks. In the early 2000s, TNDC assumed the stewardship of this historic place, and today, in 2023, we take great pride in continuing its enduring legacy by preserving affordable housing for our community.”

Constructed in 1911 and on the National Register of Historic Places, the Ambassador Hotel is a six-story building with 134 single-room apartments that include full bathrooms and kitchenettes. The property houses very low-income individuals with an area median income between 30-60%.

Located on the corner of Eddy and Mason Streets, the Ambassador’s rehab included a mega structural upgrade featuring structural steel plus life safety upgrades, code upgrades and replacement of building systems.

Story continues

“At a time when other financial partners hesitated to move forward with an investment due to the complexities, we leaned in,” said Lisa Gutierrez, director of business development, affordable housing, for Impact Finance. “We’ve specialized in complex developments like this for over 30 years. The coordination to get to the finish line was intense, from understanding the relocation plan of this vulnerable resident population to aligning with the many public funding sources and rental subsidies, all while managing the building rehabilitation needs of this historic building.”

In addition to this financing, since 2005, the U.S. Bank Foundation has provided $225,000 in grant and corporate contribution funding to TNDC.

The project is expected to be completed in 2024, and Ambassador residents said they are excited about the changes.

“I really like the new modern features at the Ambassador – especially the additional cabinet space in my room,” said one resident.

“I enjoyed returning to my newly rehabbed unit. Everything is so new and works well,” said another.

“I especially like the outdoor furniture on the Ambassador’s courtyard patio,” another resident said. “I’m planning to do my schoolwork out there at one of the new tables.”

Over nearly 30 years, Impact Finance has provided $1.25 billion in debt and almost $800 million in equity within San Francisco’s larger five-county metropolitan statistical area.

Gutierrez said the bank’s motivation to be involved in the Ambassador project is the investment’s high impact.

“We’re investors with heart,” she said, “and our primary goal is to create lasting change in our communities.”

View additional multimedia and more ESG storytelling from U.S. Bank on 3blmedia.com.

Contact Info:
Spokesperson: U.S. Bank
Website: https://www.3blmedia.com/profiles/us-bank
Email: info@3blmedia.com

SOURCE: U.S. Bank

View source version on accesswire.com:
https://www.accesswire.com/808507/bank-investing-in-san-franciscos-tenderloin-community

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SAN FRANCISCO – A federal jury today convicted Harlan Kelly, the former General Manager of the San Francisco Public Utilities Commission (PUC) of charges that he accepted bribes and gifts from a local businessman in a scheme to provide confidential information about the city public bidding process and steer city contracts to that person’s businesses, announced First Assistant United States Attorney Patrick Robbins, Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp, and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge Darren Lian. The verdict follows a two-week trial before United States Chief District Judge Richard Seeborg.

Kelly, 61, of San Francisco, was arrested on a criminal complaint in November 2020, and he was tried on charges contained in a May 31, 2022, superseding indictment that included charges of conspiracy to commit honest services wire fraud and honest services wire fraud. The superseding indictment also included charges of false statements to a bank, conspiracy to make false statements to a bank, bank fraud, and bank fraud conspiracy, related to a scheme to defraud Quicken Loans in connection with a $1.3 million mortgage refinance loan obtained by Kelly.

Kelly was convicted of one count of conspiracy to commit honest services wire fraud, one count of honest services wire fraud, and all four counts related to the bank fraud scheme. The jury found Kelly not guilty of two honest services wire fraud counts.

The charges against, and prosecution of, Kelly grew out of a years-long investigation into bribery and public corruption in San Francisco city government, led by the U.S. Attorney’s Office, the FBI, and IRS-CI. To date, 13 individuals have been charged in connection that larger set of investigations, including Mohammed Nuru, former director of the San Francisco Public Works department, and multiple city contractors and other facilitators of bribes and corruption.

The evidence at trial showed that Kelly, appointed in 2012 as General Manager of the San Francisco PUC, had access to confidential information about city contract bidding processes, and the ability to influence the awarding of some city contracts. Documents and testimony showed that Kelly had a close personal and professional relationship with San Francisco business owner and contractor Walter Wong, and that during the time Wong both conducted business with the city and sought additional lucrative contracts to supply the PUC with LED streetlights. While he was doing business with the city and seeking contracts, Wong provided numerous gifts, benefits, and bribes to Kelly. These bribes including discounted construction work on Kelly’s personal residence and a lavish international trip hosted by and in part paid for by Wong. Evidence showed that Wong paid travel and personal expenses for Kelly and his family during a March 2016 Kelly family vacation to Hong Kong, Macau, and China, and that Wong paid for hotel expenses and incidentals such as meals and luxury excursions. Wong has previously pleaded guilty to charges that he engaged in an honest services fraud conspiracy in connection with his interactions with Kelly and others.

The evidence at trial showed that as part of the bribery conspiracy, Kelly provided confidential information and documents about the details of bids submitted by other contractors, including proprietary pricing and cost information, and information and documents with internal notes about how city employees in the PUC were evaluating and rating the bidders. The evidence showed that Kelly delivered these documents to Wong and his associates in violation of Kelly’s fiduciary obligations to the city and its residents, and that the confidential information assisted Wong and his company in improving Wong’s chances to obtain the contract award.

Trial evidence also showed that Kelly defrauded Quicken Loans, a financial institution, in a $1.3 million dollar real estate mortgage loan provided to Kelly. The evidence at trial showed that Kelly worked with an associate, prominent city businessman and property manager Victor Makras, to mislead the bank. According to the evidence, in the application for the loan Kelly falsely represented that he had a $915,000 mortgage and concealed the true nature of his debts from Quicken. According to the trial evidence, these misrepresentations were material to the bank’s evaluation of the borrower and the loan. The outstanding debts that Kelly concealed from Quicken included a construction debt owed to the contractor, Walter Wong that amounted to about $89,000. Another debt concealed from the company was a $70,000 unsecured personal loan made by Makras to Kelly, a result of Makras directly paying Kelly’s credit card debt in order to conceal the fact that Kelly received this loan from Makras.

Co-defendant Makras, 64 of San Francisco, was also charged in the May 31, 2022 superseding indictment, and was convicted of making false statements to a bank and bank fraud at a separate trial in August 2022.

The federal jury today convicted Kelly of the following:

•    One count of conspiracy to commit honest services wire fraud, in violation of 18 U.S.C. §§ 1343, 1346, and 1349, which carries a maximum possible penalty of 20 years in prison and a fine of $250,000, or the greater of twice the gross gain or gross loss
•    One count of honest services wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346, which carries a maximum possible penalty of 20 years in prison and a fine of $250,000, or the greater of twice the gross gain or gross loss
•    One count of making false statements to a bank in violation of 18 U.S.C. § 1014, which carries a maximum possible penalty of 30 years in prison and a $1,000,000 fine
•    One count of conspiracy to make false statements to a bank in violation of 18 U.S.C. § 371, which carries a maximum possible penalty of 5 years in prison and a fine of $250,000
•    One count of bank fraud, in violation of 18 U.S.C. §§ 1344(1),(2), which carries a maximum possible penalty of 30 years in prison and a fine of $1,000,000, or not more than the greater of twice the gross gain or gross loss
•    One count of conspiracy to commit bank fraud, in violation of 18 U.S.C. §§ 1344(1),(2) and 1349, which carries a maximum possible penalty of 30 years in prison and a fine of $1,000,000, or not more than the greater of twice the gross gain or gross loss

As part of any sentence, the court also may order the defendant to serve an additional period of supervised release to begin after any prison term, to pay additional penalties, and to pay restitution, if appropriate. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing imposition of a sentence, 18 U.S.C. § 3553. Defendant Kelly remains out of custody pending sentencing. No future date has yet been set.

The case is being prosecuted by the Corporate and Securities Fraud Section of the U.S. Attorney’s Office. Assistant U.S. Attorneys David Ward and Kristina Green prosecuted the case at trial with the assistance of Tina Rosenbaum. The case is being investigated by the FBI and the IRS-CI.

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The City of San Francisco is reeling from rampant crime and facing a commercial real estate crash. Arguably, City policies have created both problems – the former, a result of lax law enforcement, and the latter, a consequence of the first, coupled with unfriendly business policies. Meanwhile, the City is facing a $489 million budget deficit in 2024-2025 that grows to $1.3 billion by 2027-2028. 

The anatomy of failed municipal decision-making

How does a municipality dig such a deep hole for itself and then proceed to dig itself even deeper? Recently, the City’s Board of Supervisors unanimously approved a plan that exemplifies just how cities bring about such compounding failure. Failure that comes not from corruption, not from the lack of diligent execution, and not from insufficient resources, but from pursuing goals that are undesirable and/or unachievable. Such dysfunctional goals are enabled by unbounded municipal missions that encourage the proliferation of municipal goals without the board/council/supervisor/public scrutiny that could expose why such goals are undesirable and/or unachievable.

On September 5, 2023, City Supervisors unanimously approved a “Final Governance Plan, Business Plan and Viability Study for a San Francisco Public Bank.” Describing the document as a “viability study” suggests that the working group that prepared the report evaluated the prospect of a City-run public bank to help policy makers reach an informed decision. But those closely watching the City over the past several years know – and a review of the June 2021 Administrative Ordinance that established the working group clearly shows – that the City Supervisors have long decided to create a public bank.

Over a nine-year period that began in 2011, City Supervisors commissioned several studies related to the creation of a City-run bank. Within 18 months after the California legislature authorized public banks (AB 857), effective January 1, 2020, the Supervisors had already determined that “a San Francisco Public Bank would create a fiscally safe and sound institution to invest public funds in a manner that aligns with the values and interests of the City, including investments in City residents, businesses, and sectors that serve the public good and that are underserved or unserved by the existing financial industry,” and that a public bank could “create significant long-term benefits for the City, which include allowing local tax dollars to be invested in local priorities while still ensuring the safety and preservation of capital, liquidity to meet City cash flow needs, and return on investments.”

If, in June 2021 when the Administrative Ordinance was being considered, a resident had objected to the City’s pursuit of a banking endeavor, he or she would have been told something to the effect: “This action simply paves the way for the study of a bank’s viability and the development of a plan; it does not itself establish a public bank. There will be plenty of opportunity for public comment before any formal action to create and fund a bank is taken.” When decision-making is orchestrated over several years in such a way, there is no appropriate time to voice concern. Objections are unavoidably either too early or too late. Such is the cloudy decision-making process that leads to the cavalier diversion of funds from core municipal services to sports facilities, convention centers, and now public banks.

The working group’s report

The working group’s report states that “the fundamental need for a City-owned Bank stems from the historic failure of existing financial institutions to equitably serve the needs of low-income communities and communities of color and to deliver financial services that are not extractive or damaging to those same communities.” A City-owned bank would “address the three main areas where financing disparities are most pronounced: affordable housing, small businesses, and green investments.”

The working group reported that when they reviewed outcomes in homeownership rates and lending by gender, race, and ethnicity, they discovered disparities (e.g., lending outcomes that were inconsistent with the City’s demographic makeup). The working group did not pursue causal explanations for the disparate outcomes (e.g., actual instances of discrimination in lending practices or underlying explanatory factors), instead simply concluding that such disparities constitute “a pattern of discrimination.” 

The working group proceeded to estimate the “gap in the local financial market” – i.e., the loans and funding expected to go unmet by existing financial institutions – to rest between $1.3 and $2.4 billion per year through 2030. Its report went on to state that “local enterprise lending for small businesses unsupported by existing large banks and other financial institutions likely runs to several tens of millions of dollars annually.” 

The working group did not disclose all the assumptions and calculations that led to these estimates, but the broad dollar range in the case of affordable housing and the vague dollar range in the case of small business assistance should not be surprising. If one attempts to quantify all the loans and other financial assistance that did not get made by conventional banks and then uses that estimate as a basis for projecting future “funding gaps,” based on a goal of closing assumed outcome gaps, the possibilities are endless. 

But the analysis overlooks a key fact of economics: At any given time, there is a fixed amount of investment capital. Any attempt to close an assumed “funding gap” requires diverting capital from where it otherwise would have gone. For example, City funds appropriated for its public bank are funds that cannot be used for protecting residents, businesses, and their property or for maintaining City property. (Later, I’ll discuss the issues related to using the City’s investment funds to further finance the public bank’s activities.) The report does not acknowledge such consequences. Meanwhile, the Supervisors brushed aside a joint letter from the Office of the Controller and Office of the Treasurer and Tax Collector that points out that “given the significant costs associated with a [sic] forming MFC/Public Bank, policymakers would likely need to divert funding from other initiatives.”

The one initiative that policymakers clearly do not want to jeopardize is the City’s Climate Action Plan (CAP). The CAP begets a $21.9 billion funding gap that the working group takes at face value and suggests can be addressed by the public bank. The CAP declares war on fossil fuels, culminating in a laser-focused goal of achieving “net-zero greenhouse gas emissions by 2040.” While it was not in the purview of the working group to challenge the goals of the CAP, the CAP’s goals are relevant to this discussion because we are examining a crisis in the making. By accepting the legitimacy of the CAP’s strategies, the working group incorporated the CAP’s goals, methods, and assumptions into its recommendations.

The City’s CAP falsely equates some climate impact from fossil fuels with catastrophic climate impact and uses this evaluation to conclude that “it is urgent that San Francisco take aggressive and equitable action to mitigate the catastrophic impacts of climate change.” The CAP fails to acknowledge that the most significant instances of CO2 reductions have come from nuclear energy and the substitution of natural gas for coal. Nowhere in the 300-page CAP does the City acknowledge the positive contributions made by fossil fuels; that fossil fuels are uniquely capable of providing safe, reliable, affordable, and scalable energy; and that their use is essential to protecting residents and businesses from the dangerous effects of climate. Nor does the CAP discuss the impact on its residents and businesses of requiring or encouraging the City government organization, City residents, and City businesses to adopt less reliable, more expensive forms of energy. (For a full account of why “net-zero” is an undesirable goal from the perspective of residents and businesses, see Fossil Future, by Alex Epstein.) 

The rush to replace fossil fuels will make San Francisco a more expensive place to live, work, and operate the city government organization. Low-income residents and small businesses – who are particularly sensitive to the cost of energy – will be the most visible victims of the CAP’s implementation. Meanwhile, the CAP’s strategies will benefit green cronies and opportunists who will be happy to partake in loans and grants that require little scrutiny or accountability. The working group’s recommendation to use a public bank to implement CAP strategies encourages such abuse of City funds.

The working group’s plan assumes funding the City-run bank with $60 million in contributed capital by the beginning of year four, the first year of banking operations. This amount is to be appropriated by the City and granted to the municipal finance corporation (MFC) to establish a public bank. The plan calls for an additional “contributed funding” of $250 million over an eight-year period. These funds would also be appropriated from the City but could be reduced by any amounts received from outside grants and donations.

According to the plan, in addition to receiving a $310 million commitment over the eight-year planning horizon, the bank would “serve as the depository for the City’s assets,” including those assets currently held in the Treasurer’s $15 billion Pooled Investment Fund. For now, the State’s public investment requirements might save the City from itself, since the proposed bank will have difficulty complying with the California Government Code for public funds investments. But if the State were to make special provisions for deposits of public funds in public banks, the City Treasurer will be challenged to maintain his professional responsibilities in the face of political pressure to invest in activities that are, by their nature, riskier than those in which the City currently invests. 

There is an additional, unaccounted-for effect of converting the City’s pooled investments from their current securities to deposits in a public bank. Such action would reduce the demand for such securities, thus negatively affecting the federal agencies, bond sellers, commercial paper sellers, and money market funds whose securities the City currently holds as investments. The point here is not that such an impact would be large but, rather, that the working group did not consider such an impact. Nor did the group discuss the risk to taxpayers if the City were to deliberately move from a proven investment strategy to one that compromises on safety, liquidity, and return.   

The working group’s plan relies heavily on Community Financial Institutions (CFIs) and Community Development Financial Institutions (CDFIs) to carry out many of the details of the public bank’s financing programs. (In San Francisco, there are several such community banks, credit unions, and lending funds whose missions are to support designated sectors of the community.) Such a strategy makes sense from the perspective of operational efficiency. However, this approach puts the City in the position of picking winners from the pool of CFIs and CDFIs. Moreover, as the Office of the Controller and Office of the Treasurer and Tax Collector jointly point out, such an arrangement does not promote accountability: “The impact of City funds may be harder to quantify as compared to existing City programs that involve more direct lending practices.”

What should the city do for housing, small businesses, and its residents’ environment?

The City can help residents who struggle with housing affordability by evaluating its role in sustaining land use and zoning policies that promote racism and its role and that of the State in hampering developers with requirements such as single-family zoning and other building restrictions that make housing less affordable. Such policies have extended the racist housing laws of the past and are at the root of current housing shortages. Rather than divert local tax dollars and other public funds to compensate assumed victims of such policies, it would be more effective – and just – to reform the restrictive land use, zoning, and building policies that continue to create real victims. 

The City could help its small businesses by rolling back its burdensome commercial regulations. City officials’ indifference and insensitivity to small businesses were clearly displayed during the pandemic and are further evidenced by the City’s slow post-pandemic recovery. The City’s priorities for small businesses should be to remove its own barriers to the free conduct of all business within the City and to refrain from actions that restrict energy freedom.  

In its evaluation of residential lending, home ownership, and business lending, the City should reconsider why it regards individual residents and business-owners only as members of an ethnic group, gender, or income class. That such a superficial, divisive approach to public policy continues unchallenged does not inspire confidence that municipal officials will correctly identify problems, develop effective solutions, or ever be able to clearly define their organization’s mission. A city cannot do justice to its residents – who are merely a group of individuals living in the agency’s jurisdiction – if it does not treat them as individuals. 

Finally, the City needs to reevaluate the goals and underlying assumptions put forward in its CAP. It’s bad enough that affordable and reliable energy sources are being abandoned in favor of expensive, unreliable sources. But the implementation of the City’s CAP comes at the expense of residents and business owners who are now pleading with the City to address the rampant crime and deterioration of City-maintained spaces.

Public banks are not a bad idea because they cost too much

San Francisco, a city with a multibillion-dollar budget deficit and a host of serious challenges, is enthusiastically committing over $300 million and jeopardizing its $15 billion investment pool for the sake of a financial venture that incorporates a flawed approach to affordable housing, a counter-productive approach to supporting small businesses, and a fixation on expensive, unreliable energy sources that will further compromise the City’s ability to perform municipal services.

Sadly, San Francisco City leaders now disparage the industry that helped build the City – i.e., the industry that built the Bank of America building and the Crocker Bank Tower (now Wells Fargo) and Galleria. Even New York-based Chase Bank spent $300 million for naming rights to the Chase Center. Instead, these officials should be grateful for the banking industry’s enormous contributions over decades – the commercial, home, and personal loans; the local employment, the local sponsorships, the business and property taxes paid, etc. Whatever deficiencies exist in the highly regulated banking industry will not be overcome by ambitious politicians who want to declare themselves bankers by fiat and execute a plan that promises “profitable operations” while vowing not to “maximize profitability.” 

Unfortunately, San Francisco is not alone in its quest to fund and operate a public bank. The Cities of Los Angeles, Seattle, Philadelphia, and Oakland are in the process of creating their own public banks. 

Public banks are not a bad idea because they cost too much. Such banks would be undesirable at any cost. Public banks are a bad idea because they are a product of municipalities with an unbound mission using their legislative authority to pursue undesirable and/or unachievable goals at the expense of residents and local businesses. A better idea would be for municipal officials to reform their city missions and bind them to a delimited scope of activity, based upon what local legislative and enforcement authorities can and should do on behalf of their residents and businesses. 

Mark Moses is a senior fellow with California Policy Center. He has thirty years of experience in local government administration and finance. His recent book, The Municipal Financial Crisis – A Framework for Understanding and Fixing Government Budgeting, was published by Palgrave Macmillan in 2022 and is available from major online booksellers. 

https://munifinanceguy.com/     Twitter: @MuniFinanceGuy

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Provided homes for parolees, probationers; used multiple aliases

Sought $34,655,437 in fraudulent PPP loans during COVID

Jury found former religious leader guilty on 44 felony counts

By U.S. Attorney’s Office, Northern District of California

OAKLAND – Attila Colar, aka Dahood Sharieff Bey, aka Sharieff Dahood Bey, aka Sharieff Pasha, aka David Lee, aka Georgi Petrakov, was sentenced to serve 204 months (17 years) in prison after being convicted of forty-four (44) felonies including conspiracy, bank fraud, wire fraud, aggravated identity theft, false statements to a bank, destruction of property to prevent a search, possession of a firearm as a felon, making a false tax return, obstruction, and witness tampering. The sentence was handed down by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge.

Colar, 51, of Richmond, Calif., was convicted of the crimes by a jury on June 23, 2023, after a three-week trial. Colar is the former Chief Executive Officer of All Hands on Deck, a Richmond, Calif., company that held itself out as providing a residential reentry home for probationers, parolees, homeless persons, and persons with mild mental illness. In finding him guilty of the sundry crimes, the jury concluded Colar carried out multiple schemes to defraud, including defrauding organizations that placed residents at his company’s transitional housing facilities and defrauding several lenders that were participating in the Paycheck Protection Program (PPP). The jury also found that Colar attempted to destroy evidence, obstructed the FBI’s and grand jury’s investigations into his crimes, and tampered with a witness by attempting to concealing the witness while law enforcement was taking steps to execute a material witness order.

According to opengovus.com the organization was incorporated in Hercules and is listed as a “Minority-Owned”, and “Black American Owned” non-profit in 2015 but the registration has expired. The only officer listed is Jamlia Pasha as Manager.

According to transitionalhousing.org, “All Hands on Deck Ink is a clean and sober living environment that offers a structured living program for recovering individuals, Homeless Veterans, Parolees, and Individuals with Mental Health Conditions. The environment creates good habits and healthy outlooks that will lead their residents to positive results. Offer all of the residents access to a clean and stable environment, life skill courses, 12 step program, educational opportunities, business and economic training, and resource referrals. There is a sliding scale fee. Accept self pay, vouchers and other housing rent assistance programs. Residents will have access to internet, washer and dryer, cable, a healthy meal, programs, resources and more. As accepting new residents now, call their housing managers today for placement.” It has a location at a home in El Sobrante. That information was last updated on July 13, 2023.

“In the wake of a national crisis, the government established programs, including the Paycheck Protection Program, to ease the pain inflicted by a global pandemic,” said Ismail J. Ramsey, United States Attorney for the Northern District of California. “Colar took this opportunity to defraud the government, while also defrauding several other initiatives intended to help the homeless, newly released prisoners, and those with drug problems, to name just a few of his victims. This sentence should serve as a warning that this office will pursue with vigor those who seek to line their own pockets by defrauding government efforts to address our communities’ needs.”

“Colar is now facing the consequences for his attempt to steal from a taxpayer-funded program designed to offer crucial relief to those businesses affected during the pandemic,” said Robert K. Tripp, Special Agent in Charge, San Francisco Field Office, Federal Bureau of Investigation. “We are proud to have worked in close coordination with our federal partners to ensure justice prevailed in this case.”

“This sentencing sends a clear warning that you will be brought to justice if you defraud the federal government of pandemic relief funds,” said Jon Ellwanger, Special Agent in Charge, Western Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau. “We are proud to have worked with our federal law enforcement partners and the U.S. Attorney’s Office to hold Mr. Colar accountable for his crimes.”

“Abusing SBA’s pandemic relief programs that are intended to provide critical relief to small businesses is unconscionable.” said SBA OIG’s Western Region Special Agent in Charge Weston King. “This sentencing further showcases that those who fraudulently take advantage of federal government programs will face justice for their selfish deeds. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and commitment to seeing justice served.”

“Mr. Colar attempted to defraud the U.S. government by filing multiple false tax documents to further his Paycheck Protection Program scheme. Along the way, he harmed the members of the community those funds are designed to aid and protect,” said IRS-Criminal Investigation Special Agent in Charge Darren Lian of the Oakland Field Office. “This sentencing reinforces that people who abuse the U.S. tax system and victimize taxpayers will be held accountable. IRS Criminal Investigation agents work closely with multiple agencies to help ensure those who choose to break the law are caught and punished. I would like to thank the United States’ Attorney’s Office’s and its federal partners for working together to achieve a just result.”

“When individuals corruptly obstruct the due administration of the Internal Revenue Code and file documents under false pretenses, they defraud and steal funds from taxpayer-funded programs intended to assist small businesses. TIGTA will always pursue these individuals and ensure they are prosecuted to the fullest extent of the law,” stated Special Agent in Charge Rod Ammari. “I want to thank our law enforcement partners and the U.S. Attorney’s Office for their joint efforts to hold these criminals accountable for their actions.”

Evidence at trial showed that starting in late 2018, Colar engaged in a scheme to defraud, among others, GEO Reentry, which provided treatment and supervision programs for adult probationers, parolees, and pretrial defendants in residential, in-custody, and non-residential reentry centers for the California Department of Corrections and Rehabilitation (CDCR). Specifically, in or about 2019, Colar fraudulently induced GEO Reentry to refer parolees to All Hands on Deck using falsified fire inspection clearance reports, a false letter of recommendation, false security clearance documents, and false and misleading information about its staff.

Additional evidence demonstrated that in April and June of 2020, Colar engaged in a second scheme to defraud lenders participating in the PPP lending plan authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act was designed to provide emergency financial assistance to the millions of Americans who were suffering from the economic effects caused by the COVID-19 pandemic. Pursuant to the CARES Act, the SBA managed the PPP lending plan. Trial evidence established Colar submitted multiple loan applications on behalf of All Hands on Deck to lenders that were false and misleading. For example, the applications substantially overstated the number and payroll of All Hands on Deck employees—while Colar’s loan applications stated All Hands on Deck had approximately 73 to 81 employees, the business had, in fact, perhaps other than himself, no salaried employees.

Colar was also convicted of offenses related to the submission of multiple fraudulent loan applications in the name of other companies. The evidence demonstrated Colar hastily revived two dormant companies, and then submitted loan applications from the PPP lending plan for the bogus businesses. To carry out this scheme to defraud, Colar used, without legal authority, the names and identities of two persons living in his residential reentry facility. Colar falsely represented that the residents were “CEO”s of companies with hundreds of employees with million-dollar payrolls.

In all, the evidence at trial showed that Colar submitted a total of 16 fraudulent loan applications to the PPP lending plan seeking approximately $34,655,437 in PPP loans.

Colar also was convicted of obstruction and witness tampering relating to the investigations into his crimes. Colar has been found guilty of destroying documents during a search of his home, lying to the FBI about a firearm, falsifying records produced to the grand jury, interfering with the representation by counsel of a material witness by impersonating the witness’s Power of Attorney, coaching a witness to falsely state that the witness was the CEO of one of Colar’s bogus companies that submitted fraudulent loan applications, and concealing a witness in multiple hotels and other locations in the Bay Area to forestall or prevent the witness from providing testimony in the federal grand jury.

In sum, Colar was convicted of forty-four (44) federal criminal offenses for his conduct. The convictions include the following: one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349; one count to commit conspiracy to commit bank fraud and wire fraud, in violation of 18 U.S.C. § 1349; two counts of bank fraud, in violation of 18 U.S.C. § 1344; sixteen counts of wire fraud, in violation of 18 U.S.C. § 1343; eight counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A; two counts of false statement to a bank, in violation of 18 U.S.C. § 1014; one count of possession of a firearm by a felon, in violation of 18 U.S.C. § 922(g); one count of destruction of property to prevent a search or seizure, in violation of 18 U.S.C. § 2232(a); one count of obstruction of justice, in violation of 18 U.S.C. § 1512(c)(2); two counts of falsification of records in a federal investigation, in violation of 18 U.S.C. § 1519; six counts of making a false tax return, in violation of 26 U.S.C. § 7206; one count of conspiracy to tamper with a witness, in violation of 18 U.S.C. § 1512(k); one count of tampering with a witness, in violation of 18 U.S.C. § 1512(b)(1); and one count of tampering with a witness, in violation of 18 U.S.C. § 1512(b)(2).

In addition to the prison term, Judge Gilliam also ordered Colar to serve 60 months (five years) of supervised release, to begin after his prison term. Restitution will be determined at a later date. Colar is currently in federal custody and will begin serving his prison term immediately.

According to an Oct. 3, 2020 ABC7 News report, “Colar was the leader of a Black Muslim temple in Oakland and a group that was a spinoff of Your Black Muslim Bakery, after the leader of the bakery was arrested and later convicted of ordering the murder of Oakland journalist Chauncey Bailey.” He “was convicted in 2015 and sentenced to five years in state prison for submitting bogus documents to win security contracts with Alameda County, the Los Angeles Department of Water and Power and the Housing Authority of the City of Los Angeles.”

Assistant U.S. Attorneys Barbara J. Valliere, Adam A. Reeves, and Ross D. Mazer are prosecuting the case with the assistance of Paralegal Specialist Laurie Worthen and Legal Assistant Kathy Tat. The prosecution is the result of an investigation by the FBI, IRS-Criminal Investigation, Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau, Internal Revenue Service: Criminal Investigation, Treasury Inspector General for Tax Administration, and Office of Inspector General for the U.S. Small Business Administration.

Allen D. Payton contributed to this report.

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In the point-of-sale financing space, fintech Wisetack is taking a different path than big buy now, pay later players by focusing on installment payments for in-person services such as home repairs. 

By linking with both banks and software companies, the San Francisco, California-based Wisetack’s platform enables pay over time options for the services industry. Wisetack, which has raised $64 million since its 2018 founding, works with tens of thousands of small services merchants through its software integrations, said CEO Bobby Tzekin during an Aug. 2 interview.

The company’s fintech infrastructure is embedded into the software those merchants use, allowing the customers of those companies to pay over time for their services, he said. Some of Wisetack’s software partners include Jobber, SmartServ and Thumbtack. Wisetack’s bank partners handle the lending aspect of the transaction. 

Wisetack most commonly competes with credit cards, although private label card issuer Synchrony Financial and bank Wells Fargo are other competitors in this corner of the market, Tzekin said.

In June, Wisetack and Citizens Financial Group teamed up. The partnership offers the Providence, Rhode Island-based bank a potential customer base it wouldn’t otherwise have access to, while Wisetack benefits from working with a large financial institution, Tzekin said. 

Wisetack, which also partners with San Marcos, California-based Hatch Bank, plans to announce more bank partners in the next couple of quarters, Tzekin said. 

Editor’s note: This interview has been edited for clarity and brevity. 

PAYMENTS DIVE: What is Wisetack’s focus in the point-of-sale financing space?

BOBBY TZEKIN: We don’t do e-commerce; we focus on small, services-based merchants. Our installment payment plans go anywhere from three months to five years, and everything that we do is an actual consumer loan issued by a bank. Our average transaction size is close to $5,000. We work with a lot of home services merchants, like folks doing HVAC, or plumbing, or electrical; landscaping, roofing, windows. We work with dental offices, we work with car repair providers. We reach these businesses through the software they’re already using. We embed into that software as an integrated payment option for in-person services. Many of these merchants either would not have that option available to them, or they’re using another product that is not embedded and tends to be more confusing and more expensive for customers.

Bobby Tzekin

Permission granted by Wisetack

What’s Wisetack’s strategy in landing more bank partnerships?

Our strategy with the banks, for the time being, will be to partner with fewer but better partners, so banks that are large enough and committed to the space. We’re not looking to have dozens of partners, but have several that are really strategic and committed.

Given this year’s bank failures and the uncertain economic outlook, have financial institutions’ interest in this type of partnership changed?

The partnerships and conversations we have with banks are long-term and strategic in nature. These banks see the market changes and move towards installment payments for consumers and know they need to participate in the market shifts to keep their large consumer business units successful. We’re working with the (executive) teams as they plan for many years ahead. Overall, nothing has changed in how we work with these banks.

How does Wisetack’s position in the installment lending space differ from traditional BNPL providers? 

We’re much more differentiated. There are a number of BNPL brands doing very similar things. In terms of profitability, I think many companies, given the environment the past few years, maybe managed their financials in a certain way that assumed access to lots of capital. We did less of that, in general. 

How has the BNPL trend brought more attention to the installment lending space?

Point-of-sale borrowing in general is short-circuiting a two step that was happening before: Fifteen years ago, people would run up their credit card bills, and then a few months later, they would go to online lenders and refinance the credit card, because they knew, OK, if it’s a bad deal that I’m revolving, I’ll get a loan to pay it off. So there’s no need for that if I can just take out the installment payment when I’m making the purchase. Technology is finally making that available everywhere.

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Wong added that Schachterle’s role as senior liaison to FHLBank San Francisco’s member institutions “has never been more important” as the bank continues to develop products, services and tools to “support and sustain local lending.”

Most recently, Schachterle served as warehouse loan sales manager at Arizona-based Western Alliance Bank. Prior to that, she held other leadership positions at Comerica Bank, PennyMac, Bank of America, Aurora Loan Services and US Bank. She has also served on the board of directors of the California Mortgage Bankers Association since 2019.

Continue reading: The originator closes the circle with the family business

“I am excited to join FHLBank San Francisco and the team as they fulfill their mission to provide liquidity to members and support home ownership, fund affordable housing development and provide economic boost to communities,” said Schachterle. “As a former member of FHLBank San Francisco, I have seen its impact firsthand on so many touchpoints, and am inspired by the opportunity to partner with our member banks, credit unions, community development financial institutions and insurance companies to provide products, services and grant programs that… improve the lives of millions of consumers.”

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ANKARA, Turkey (AP) – Turkey’s President Recep Tayyip Erdogan has appointed a former US bank executive to head the central bank…

ANKARA, Turkey (AP) — Turkey’s President Recep Tayyip Erdogan on Friday appointed a former U.S. bank executive to head the central bank, sending the strongest signal yet that the newly re-elected leader may be backing away from his unusual economic policies that many advocate blame the worsening cost of living crisis.

Hafize Gaye Erkan, 41, has a Princeton education and will be the first woman to head Turkey’s central bank. In 2021, she briefly served as co-chief executive officer of First Republic Bank, which became the second-largest US bank to fail last month as its wealthy customers pulled out their money during the broader industry turmoil.

Her nomination follows last week’s appointment of Mehmet Simsek, an internationally renowned former banker, as finance and finance minister. He was a former finance minister and deputy prime minister under Erdogan, returning from politics after a five-year hiatus.

The selection of two key financial positions has raised hopes that Erdogan, who was re-elected to a third term last month, is backing down from his insistence that lower interest rates will combat Turkey’s soaring inflation. The rate peaked at 85% in October and people are struggling to afford food, housing and other necessities.

Critics blame the cost-of-living crisis on Erdogan’s unorthodox approach that runs counter to conventional economic thinking – that raising interest rates would fight inflation. Central banks like the US Federal Reserve, the European Central Bank and others around the world are raising the cost of borrowing to curb consumer price inflation.

Erkan’s appointment “is an important step towards more credible economic policy and encourages President Erdogan to relax his grip on the central bank,” said Liam Peach, chief emerging market economist at Capital Economics.

“Recent political appointments must now be translated into policy action so investors can be confident that this shift towards orthodoxy is the real deal,” he said.

The next steps are crucial as the economy grapples with a plummeting currency and still-high inflation at 39.5%. The central bank will meet later this month to decide on interest rates – a key indicator of the course of Turkey’s economy.

In recent years, Erdogan has sacked three central bank governors for failing to comply with his rate-cutting policy.

“Erkan needs to be given the freedom to raise interest rates a lot,” Peach said. “A sharp rate hike from about 8.5% to about 20% would send a very strong signal that a credible policy shift is at hand.”

It must also show that it is important to keep interest rates high in order to curb inflation. While higher borrowing costs are meant to fight inflation, they can slow economic growth as borrowing becomes more expensive.

This could be another pain point for households and businesses whose food and energy costs have skyrocketed in the wake of Russia’s invasion of Ukraine and whose currency has hit record lows against the US dollar.

Erkan was CEO of investment banking firm Goldman Sachs and worked at San Francisco-based First Republic Bank, where he served as co-CEO for six months in 2021. JPMorgan Chase took over the failed bank after US regulators seized it in May.

She replaces Sahap Kavcioglu, who has overseen a series of rate cuts since 2021. Kavcioglu will now head the Turkish banking supervisory authority BBDK.

“The appointment of Kavcioglu – a proponent of Erdogan’s ‘new economic model’ – as head of banking supervision is a powerful reminder that Erdonomics can retaliate at any time,” said Wolfango Piccoli, co-president of London-based risk consultancy Teneo.

Erkan will have to rebuild the central bank “after years of mismanagement, purges and demotions,” Piccoli wrote in a note.

“Like most other important institutions, the (central bank) has lost its independence and has been undermined by Erdogan’s drive to centralize power, with key tasks being given to loyalists and cronies,” he said.

Copyright © 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.

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