Chase Source: Porn Star Accounts Not Targeted
LOS ANGELES — While J.P. Morgan Chase & Co. senior officials won't publicly comment about allegations that the bank routinely discriminates against performers by closing their accounts, a source deep within the company told XBIZ that the bank isn't specifically closing accounts of porn stars because of their occupation.
"There is absolutely no truth to reports that Chase incorporates a targeted effort because of their affiliation to this industry," the Chase source told XBIZ. "We routinely exit customers."
The Chase source further said that the bank has no policies that would preclude customers who work in the industry from opening an account.
"The affected parties are in the 'handful' — not hundreds as reported in the media," the Chase source said. "Also, as misreported, this has nothing to do with 'Operation Choke Hold.'"
Earlier this week, The Daily Beast theorized that the case with Chase and the reported "hundreds" of porn star account closures tracks back to Operation Choke Point, a Justice Department's program that allows banks to shut down accounts they deem fraudulent or sketchy in any way without warning.
But Melody L of L3 Payments told XBIZ that Operation Choke Point isn't applicable in the case of the porn stars who have lost accounts.
"Operation Choke Point is about stopping merchant fraud and protecting consumers," Melody L of L3 Payments told XBIZ. "It has little to do with adult porn stars and their banking relationships at all."
Melody L explained in an XBIZ World article in March that the Justice Department's program requires banks to perform due diligence to prevent fraud.
"Banks in the U.S. are responsible for adhering to the regulations of the Bank Secrecy Act, anti-money laundering regulations and many other laws," she wrote in the XBIZ World article. "To adhere to these regulations, a bank is charged with knowing their customers and if they see or believe that there is anything suspicious regarding their client’s transactional activity then they are to file a Suspicious Activity Report (SAR).
"Filing of this SAR protects the bank from being guilty of being a participant in the consumer or merchant activities and gives the authorities a heads-up on possible financial crimes that are potentially being committed."
The brouhaha over Chase accounts and porn stars began last month after porn star Teagan Presley told media outlets, including XBIZ, that Chase closed her account because the bank considered her "high-risk."
Earlier this week, XBIZ reported that some porn stars, many who offer performances on live webcams, have recently felt the pinch from PayPal.
Despite the company's long-standing policy over facilitating transactions involving “certain sexually oriented materials or services," some were recently given the boot and their accounts frozen for up to six months.
Some of the affected adult entertainment stars included Teal Conrad, Tasha Reign, Mika Tan, Bonnie Rotten and Spencer Scott, among others.