Something is rotten in Pornville.
Several of the biggest names in porn took to Twitter last month to rail against Chase, claiming that the bank had terminated their accounts or denied them banking services because of their XXX-rated line of work. News reports surfaced from Vice, The Guardian, and other outlets soon after accusing Chase, a unit of New York-based JPMorgan Chase & Co., of denying service to hundreds of current and former porn stars, serving them with curt letters of account termination without further explanation.
What could be a better 21st-century story than bankers vs. porn stars: those that fuck for money pitted against those that fuck people out of it? The $14 trillion U.S. banking industry vs. the $3 billion U.S. porn industry? But this seemingly straightforward narrative of a bankers’ war on porn gets more complicated, the deeper you dig. It may even lead to one of the most powerful agencies in the American government.
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The recent controversy seems to have begun on March 31 when David Lord, a prominent porn director responsible for hits like Miso Horny 2 and Breaking Bad XXX, claimed to receive a letter from Chase out of the blue saying that his account had been closed.
“I was totally surprised… I have no problem with my banking,” Lord tells The Daily Beast, claiming he’s had an account with Chase for years without any issues. Befuddled, he posted his letter from Chase to Twitter. “This is before I found out it went to hundreds of people,” he says, adding, “Once I posted it, it turned into a huge thing.”
Lord’s form letter from Chase reads: “We recently reviewed your account and determined that we will be closing it on May 11, 2014,” the letter said. “You may close your account before the date we’ve provided. Your account agreement says that either of us may close your account at any time, without notice and without a reason. We will mail you a check for the remaining balance in your account 10 business days after it is closed.”
The result set off a frenzy of solidarity among porn performers past and present, many of whom recounted receiving similar letters from Chase.
Among those who also say they have received the infamous form letter were Teagan Presley, a renowned ex-porn star-cum-stripper, and her husband, porn director Josh Lehman. Presley, who has 188,000-plus Twitter followers, shot back at the bank via social media in a series of tweets.
“After receiving the letter which said I had two weeks, the story went viral and Chase reached out to me on direct message on Twitter asking for my account number to see if they could ‘help,’” says Presley. “One hour later, my account was closed. When my husband spoke to their executive branch they said my account was closed for being high-risk and wouldn’t explain what that meant.”
According to Presley, she’s had an account with Washington Mutual for 11 years—since she was 18—which was transferred over to Chase in 2009 following her original bank’s collapse. Retired from porn since May 2013, she’s getting by via stripping, and is also working on “a pilot for a gun show for a major sporting network that will air later this year.”“We used our accounts only for personal expenses,” she says. “Literally our rent, food, clothes, gymnastics for our kids. That’s it.” Presley also says she was in good standing with the bank, saying, “I have never even bounced a check with them.”
Other porn stars, including Cougarland’s Veronica Avluv and White House Orgy’s Layton Benton, took to Twitter to vent about receiving similar letters of closure from Chase. Benton, who says she has been banking with Chase for “a couple of years,” says she first sensed things were awry when she tried to withdraw money last month from an ATM and it told her to see a teller.
“The teller told me my account had been closed and do I want to see a banker,” says Benton. “The banker told me my account was closed and to call customer service to find out what is going on. We call customer service. They told me the reason they closed my account was that it was a risk for them to have the account and they want to prevent any fraudulent activity that could occur in the future.” She adds, “I tried to get the money in my bank account and they said I could have it in 10 days. I started crying in the bank asking them if there was anything I could do to get my money so I could go about my business. So, they withdrew all the money in my account and gave it to me and that was that. Then I get a letter in the mail on March 28.”
Chase wouldn’t provide an official statement on the matter. But when contacted by The Daily Beast, a Chase representative, speaking on background, denied both that hundreds of performer accounts had been closed and that the adult industry was being targeted at all. Further, the spokesperson denied that the bank had any policy discriminating against employees in the adult industry.
Despite the Chase representative’s claim, several adult performers who had been banking with Chase decided to preemptively close their accounts as word spread online of the bank’s seeming issues with the porn industry. Bonnie Rotten, winner of the 2014 AVN Award for Female Performer of the Year, closed her account and migrated over to Wells Fargo; Bentley says she is planning to bank there, as well.
“We treat all prospective customers the same way,” a spokesperson for Wells Fargo told The Daily Beast.
Jessica Drake, another prominent porn performer, told The Daily Beast she feels lucky she’s had no problems with her banking, but noted that a close friend of hers in the industry was recently declined a bank account. And Stoya, a renowned adult star, took to Twitter last month to complain about the alarming trend of porn performers being denied bank accounts.
It’s not just banks, either. PayPal has long banned adult sites from using its money-sending services, and DailyDot recently reported that a number of porn stars were upset that their Amazon Wish Lists, a common way for XXX performers to be sent free gifts from admiring fans, had been terminated.
Exactly how many Chase accounts were closed and why the bank decided to close them remains nebulous. After canvassing the industry, in addition to Rotten, most of the two dozen or so porn performers we contacted appear to be having no problems with Chase or any other banks. Porn talent agent Mark Spiegler reported no problems with any of his clients—save an incident last year when Chanel Preston said she had her bank account closed by City National Bank (again, without explanation). And Marci Hirsch, VP of Production at Vivid Entertainment, checked with all her hosts at Vivid Radio—many of whom bank with Chase—and reported that none of them have had any issues.
There may be some in the industry who are reluctant to go public with their account shutdown stories for fear of drawing attention to their finances. But by our estimate, the number of people impacted by Chase account closures is closer to tens than hundreds. The shutdowns haven’t been sudden, either, but playing out over the course of the past few months.
Furthermore, in 2014, as the porn industry struggles to fend off competition from amateurs and rampant piracy, many adult performers earn money from a variety of backdoor methods which may give banks pause. Those include giving paid private Skype shows sold over Twitter, escorting, and more. Layton Benton, one of the porn stars who claimed Chase shut down her account—and told The Daily Beast she’s mulling suing Chase over it—has what appears to be a longstanding listing at the well-known escort site EroticReview. When contacted by The Daily Beast about the escort ad, Benton denied it was real, saying, “That is not my ad. I would never put myself in that kind of position.”
David Lord, the porn director who first set off the firestorm, was arrested in 2008 in connection with an attempt at “tricking Hungarian women to come to the United States and work as prostitutes in a Sherman Oaks brothel,” according to a report by the Los Angeles Times.
Lord, however, claims the alleged incident had nothing to do with Chase’s cancellation of his account. “It boiled down to a perjury charge,” he tells The Daily Beast. “I feel it in no way has anything to do with the Chase situation. If they got rid of everyone who ever got arrested they would have very few customers left.”
Porn stars began experiencing problems with their bank accounts in May 2013, including the aforementioned Preston, who says she had her account terminated that month by City National Bank. The timing is curious, to say the least.
Morality in Media (MIM) is an American faith-based nonprofit organization run by federal lobbyist Patrick A. Trueman, who hunted down pornographers as a member of the U.S. Department of Justice during the Reagan administration. It was established in 1962, and bills itself as “the leading national organization opposing pornography and indecency through public education and the application of the law.” In addition to various donors, they’ve received funding via annual grants from the DOJ to combat obscenity complaints, reported The New York Times. Currently, they direct The Coalition for the War on Illegal Pornography—a bipartisan coalition of over 115 national, state, and local groups that exists to pressure the DOJ to enforce federal obscenity laws.
Back in April 2013, MIM issued their “Dirty Dozen List”—an annual list of what they deem to be the “12 Leading Contributors of Sexual Exploitation.” The dubious list singled out everyone from Facebook to the tome Fifty Shades of Grey for, in their eyes, promoting sexual exploitation. At the top of the list was Attorney General Eric Holder, leader of the DOJ. The list accused Holder of refusing “to enforce existing federal obscenity laws against hardcore adult pornography, despite the fact that these laws have been upheld by the U.S. Supreme Court and effectively enforced by previous attorneys general.”
One month after Holder was called out on the Dirty Dozen List, Preston had her bank account closed.
Why? The answer may lie in a DOJ probe known as “Operation Choke Point.”
Operation Choke Point was first disclosed in March 2013 and, according to American Banker magazine, the probe “aims to prevent fraudsters from accessing consumer bank accounts by choking off their access to the payments system. Its effects have been felt by banks, payment processors and companies that make short-term consumer loans over the Internet, with some banking industry officials arguing that at least some of the affected online lenders are legitimate businesses.”
On April 24, Frank Keating, president and CEO of the American Bankers Association, penned an op-ed in The Wall Street Journal claiming that the DOJ is “telling bankers to behave like policemen and judges.”
“‘Operation Choke Point,’ is asking banks to identify customers who may be breaking the law or simply doing something government officials don’t like,” wrote Keating. “Banks must then ‘choke off’ those customers' access to financial services, shutting down their accounts.”
Keating added, “Bank regulators—particularly the FDIC—have joined in the action, warning banks away from serving more than 22 categories of businesses, including ‘Get Rich Products,’ ‘Ammunition Sales,’ ‘Pharmaceutical Sales,’ ‘Home Based Charities,’ and even ‘As Seen on TV’ businesses. Some of these businesses may indeed be risky. But that doesn't justify pre-emptively declaring them all criminals and freezing their access to the payments system.”
One other business on the FDIC’s list: pornography.
In 2011, the FDIC released a report titled “Managing Risks in Third-Party Payment Processor Relationships.” According to the report, pornography is one of 30 categories of businesses targeted as havens for “high-risk activity” that warrant close scrutiny.
The report concluded:
“Financial institutions should act promptly if they believe fraudulent or improper activities have occurred related to a payment processor’s activities. Appropriate actions may include filing a Suspicious Activity Report, requiring the payment processor to cease processing for that specific merchant, or terminating the financial institution’s relationship with the payment processor.”
Operation Choke Point was also derided in an op-ed in American Banker magazine by William M. Isaac, former chairman of the FDIC. He called it “an abuse of power” and concluded, “The DOJ should not be involved in bank regulation to any extent whatsoever. Its job is to investigate and prosecute crimes. Bank regulators need to stay out of the political arena and focus all of their energy on ensuring banks are operating in a safe and sound manner and are complying with all laws and regulations. Neither the DOJ nor bank regulators should be allowed to dictate which lawful businesses will be granted or denied access to banking services.”
When contacted by The Daily Beast about whether or not Operation Choke Point is putting pressure on various banks to target those in the adult industry, a spokesman for the DOJ replied: “The department declines to comment.”
