Banks pulled out because FaZe's leadership faced criminal charges and the organization's finances became too risky to handle
In July 2022, multiple banks and financial institutions severed ties with FaZe Clan, the esports and content organization. The departures followed federal charges against three of FaZe's executives—co-owner Richard "Banks" Bengtson, CEO Lee Trink, and COO Jared Gitlin—for wire fraud and money laundering. Banks and Trink were accused of misrepresenting the organization's financial health to investors and using company funds for personal expenses. Once criminal charges became public, banks treating FaZe as a business client faced reputational and legal risk by continuing the relationship.
The timing mattered. FaZe had been seeking investment and expansion capital, which meant the organization needed banking relationships to handle large transfers and maintain credibility with potential investors. When the fraud allegations surfaced, those same banks had to assume FaZe's financial records might be unreliable and that continuing to process transactions could expose them to liability if the organization was later found to have laundered money through their accounts.
Key Takeaways
- Three FaZe executives were charged with wire fraud and money laundering in 2022, which triggered immediate departures by multiple banks.
- Banks distance themselves from organizations under criminal investigation to avoid reputational damage and potential legal exposure.
- FaZe's case showed how quickly financial institutions can cut ties when leadership credibility collapses, regardless of the organization's size or public profile.
- The departures made it harder for FaZe to conduct normal business operations, including paying employees and managing sponsorship money.
What the fraud charges actually alleged
The U.S. Attorney's Office for the Central District of California charged Banks, Trink, and Gitlin with conspiracy to commit wire fraud and money laundering. The core allegation was that they misrepresented FaZe's financial performance and revenue to potential investors, claiming the organization was more profitable than it actually was. Prosecutors said they used investor money for personal purchases—including luxury cars, jewelry, and real estate—rather than for business operations.
Banks also faced a separate allegation related to a cryptocurrency pump-and-dump scheme. He was accused of promoting a digital token called Save the Kids without disclosing that he had a financial stake in it, then selling his holdings after the price rose. These charges meant that FaZe's leadership had potential criminal liability, not just civil disputes with investors.
Why banks treat criminal charges as a reason to leave
Banks are required by federal law to monitor their customers for money laundering and to report suspicious activity to the Financial Crimes Enforcement Network (FinCEN). When an organization's leadership is charged with wire fraud or money laundering, the bank's compliance team has to assume the organization's financial records may be falsified and that future transactions could be part of a criminal scheme.
Continuing to do business with FaZe after the charges meant the bank would have to scrutinize every transaction more heavily, which increases costs and operational burden. More importantly, if a bank later discovered it had processed money for a criminal enterprise and had not reported it, the bank itself could face fines, loss of license, or criminal charges against its executives. The safer choice for any bank is to close the account and refer the matter to authorities.
There is also a reputational angle. Banks depend on trust from depositors and investors. Being publicly associated with an organization under federal investigation for fraud can damage that trust, even if the bank itself did nothing wrong.
How the departures affected FaZe's operations
Losing banking relationships created immediate practical problems. FaZe could not easily deposit sponsorship money, pay employees, or manage payroll. The organization had to scramble to find new banks willing to work with them, which is difficult when your leadership is under criminal investigation. Some smaller or more specialized financial institutions might take the account, but often at higher fees or with more restrictive terms.
The departures also signaled to sponsors and investors that FaZe was in serious trouble. Sponsors want to work with organizations that can reliably receive and manage payments. If a brand cannot be sure FaZe's bank account will still exist next month, they are less likely to sign a deal. This created a cascading effect: the loss of banking relationships made FaZe less attractive to sponsors, which reduced revenue, which made it harder to find new banking partners.
What happened to the criminal cases
In March 2023, Banks pleaded guilty to wire fraud conspiracy. He admitted to misrepresenting FaZe's financial performance to investors and agreed to cooperate with prosecutors. Trink and Gitlin also reached plea agreements. The guilty pleas meant the fraud allegations were no longer contested—the executives had admitted to the core charges.
Banks received a sentence of 10 months in federal prison and was ordered to pay restitution. The guilty pleas and sentencing made clear that the fraud was real and substantiated, not a misunderstanding or a civil dispute. This reinforced why banks had been right to leave: FaZe's leadership had actually committed the crimes they were charged with.
How this compares to other organizations losing banking relationships
FaZe is not the only organization to lose banking relationships due to leadership problems. Banks have cut ties with political organizations, nonprofits, and businesses when executives faced criminal charges. The pattern is consistent: criminal allegations trigger immediate risk assessment, and most banks choose to exit rather than manage the compliance burden.
However, FaZe's case was particularly visible because the organization is large and public-facing. Most people do not hear about a mid-sized manufacturing company losing its bank account, but when a major esports organization with millions of social media followers loses banking relationships, it becomes news. This visibility made the consequences of the fraud more apparent to the broader esports and gaming community.
Whether FaZe recovered banking relationships
After the guilty pleas and sentencing, FaZe did eventually restore banking relationships, though the process took time and likely involved higher fees or more restrictive terms. The organization continued to operate, though with reduced revenue and a damaged reputation. New leadership took over, and the organization worked to rebuild trust with sponsors and financial institutions.
The recovery was possible because FaZe's underlying business—content creation and esports competition—was still valuable. Sponsors and investors were willing to work with the organization again once the criminal cases were resolved and new management was in place. However, the damage to the organization's credibility and finances was substantial and long-lasting.
Frequently Asked Questions
Did all of FaZe's banks leave at the same time?
No, but multiple banks departed within a short window after the charges became public in July 2022. The departures were not coordinated, but they happened in quick succession as each bank's compliance team reviewed the situation and decided the risk was too high to continue the relationship.
Could FaZe have sued the banks for leaving?
Unlikely. Banks have broad legal authority to close accounts and terminate relationships with customers, especially when criminal activity is involved. FaZe would have had no realistic legal claim against a bank for ending the relationship after federal charges were filed against the organization's leadership.
Did the bank departures mean FaZe was definitely guilty?
The bank departures indicated that banks viewed the risk as too high to continue, but they did not determine guilt or innocence. However, in FaZe's case, the executives later pleaded guilty, which confirmed the fraud allegations were accurate. The banks' decision to leave turned out to be justified by the facts.
Could a smaller bank have worked with FaZe during the investigation?
Possibly. Smaller banks and credit unions sometimes have more flexibility in their compliance procedures, though they are still bound by the same federal money-laundering laws. However, most financial institutions would have made the same risk calculation and chosen to exit rather than manage the compliance burden of a customer under federal investigation.