Masih Madani, ebsg, and Innovative Bank

Update:

Failed O.C. bank says it lost millions to high-tech fraud
By RONALD CAMPBELLA

Los Angeles County businessman is accused of stealing at least $3.5 million in a high-tech skimming operation at an Orange County bank seized last month by federal regulators.

The failure of Westminster-based First Vietnamese American Bank cost the Federal Deposit Insurance Corporation $9.6 million.

Some 300 businesses and nonprofits have sued the bank and Chatsworth businessman Masih Madani, alleging Madani stole their money under the bank's nose. First Vietnamese in turn has sued Madani and a second failed institution, Oakland-based Innovative Bank.

The cases shed light on the vast but little-known Automated Clearinghouse, which handled nearly $20 trillion in 2009 alone. Operating through the Federal Reserve Board, banks and "third-party processors" such as Madani's company, Opus Ventures, individuals and companies make billions of payments each year.

You probably use the system to automatically deposit your paycheck or Social Security check or automatically debit your mortgage or gym fee from your bank account. For the rest of the article go to http://articles.ocregister.com/2010-12-08/news/25185657_1_bank-account-first-vietnamese-american-bank-orange-county-bank

The ebsg brand of cards which was offered previously through Innovative Bank and was the subject of a recent lawsuit by FVAB, is currently being offered on the internet. As has been noted before, it has been alleged in an on going Orange Country California court case, that losses from ACH and ebsg stored value card transactions through Innovative Bank and Mr. Madani have been estimated to be millions of dollars.

Update:

Previously posted 12/03/09: According to court documents, losses from stored value cards could exceed $80 million. These losses could have been prevented had other financial institutions performed to industry standards.

Mr. Madani admitted his theft to one of his lenders, and did not deny it when an investor inquired as to the Orange County Court Case. Court documents claim, 'Mr. Madani admitted to bank officers of the bank's corporate counsel that he and Opus had improperly taken over $3 million in ACH funds while Innovative Bank served as the ODFI for Mr. Madani, Opus, and possibly others. As a result of learning that Mr. Madani had stolen ACH money, FVAB instituted immediate action to stop any and all transactions related in any way to Mr. Madani.' FVAB acted immediately and appropriately.

Mr. Madani approached a bank with a request that it perform other banking services. Mr. Madani represented that there was a large market for banks to issue Stored-Value Cards. These cards represent money on deposit with the issuer, and are similar to debit cards. One major difference between Stored-Value Cards and debit cards is that debit cards are usually issued in the name of the individual account holders, while Stored-Value Cards are usually anonymous……"

UPDATE:

Many of Madani's card programs are now being offered by Western Commercial Bank.