Global Hookah Distributors Targeted by Operation Choke Point
Timeline of events
Brennan Appel is the owner of Global Hookah Distributors (GHD), a tobacco and tobacco products distributor based in Charlotte, North Carolina. Founded in 2002, GHD has been featured in numerous mainstream publications such as The Times-Picayune, The Denver Post, USA Today, The Miami Herald, among others.
In 2014, Bank of America abruptly shut down GHD’s numerous bank accounts after serving their business for 12 years. Just days before the account closures, representatives from Merrill Lynch met with GHD to discuss future opportunities.
Initially, Bank of America offered no explanation as to why the accounts were closed. In early February 2015, GHD’s payment processor, EFT Network, shut down their account due to regulatory pressure from Operation Choke Point. In a call with Mr. Appel, EFT Network president Alex Bacon explicitly blames Operation Choke Point for the account closures. Furthermore, Mr. Bacon lists out a number of lawful industries considered “high-risk” by federal regulators, including tobacco.
The audio recording of the call can be heard below:
February 13, 2015 call between GHD owner Brennan Appel and EFT president Alex Bacon.
Note: This recording was made by Global Hookah Distributors. The US Consumer Coalition was not involved in the taping or recording of this conversation.
1- “Why in the past have we done high amounts before with no problem?”
2- “Have you heard of a little thing called Chokepoint and CFPB?”
3- “We had a bank account with JP Morgan & Chase and we got the same letter because of what we do as a business. We got a 30 day letter after 14 years.”
4- “Choke Point is a bona fide legislative agenda by legislative fiat without judicial review or legislative process”
5- “They’re going after clinics, collection agencies, gun dealers, ammunition dealers, payment processors”
6- “[Examiners say] We’re going to make your life miserable. Instead of auditing you once a year we’re going to audit you four times a year. If we find anything negative we’re going to write it up and then you’re going to incur increased cost increased focus from banking regulators.”