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How Did Gaddafi Bypass US Anti-Money Laundering Rules To Bank With Goldman And JPMorgan?

Tyler Durden's picture


One of the most critical questions that has to be asked in light of yesterday's revelation that among the banks providing banking and asset amangement services for Libya were Goldman Sachs, JP Morgan and Citigroup, is just how did Libya get an exemption for anti-money laundering provisions both in Europe and the US. Oddly enough, this future mainstream debate arises not in the US, where any form of critical thinking appears to be immediately curbed by SEC Rule 201 (for all those calling for a hike in the SEC's budget, we suggest the following contrarian thought experiment: let's cut its budget to zero and see how long before anyone notices) , but out of the UK, where a reader writes in to the FT (oddly enough, partially owned by the Libyan Investment Authority) with the following very simple question: "It seems to me entirely implausible that Col Gaddafi could have earned
billions of dollars through legal means. And yet if the AML procedures,
to which we are all subjected, have not been applied rigorously to the
likes of Col Gaddafi and his family, one is forced to ask what purpose
they really serve." Or what purpose any regulation serves in general when fraud results in surging stock prices, and companies that adhere to the rules are promptly wiped out in this bizarro capitalist world.

From the FT:

Sir, I read with interest the news that the UK government is freezing billions of dollars in assets belonging to Muammer Gaddafi and his family. I would also be intrigued to know whether the banks and other financial institutions handling these assets have applied the same anti-money laundering (AML) procedures to these assets as are applied to every other “normal” banking client in the UK.

I am less interested in whether Col Gaddafi and his family were able to supply passport copies and utility bills but more interested in what evidence they were able to present as to the source of the funds.

It seems to me entirely implausible that Col Gaddafi could have earned billions of dollars through legal means. And yet if the AML procedures, to which we are all subjected, have not been applied rigorously to the likes of Col Gaddafi and his family, one is forced to ask what purpose they really serve.

Charles L.M. Horner,

Bangkok, Thailand

h/t Dylan Grice and Lizzie


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Wed, 03/02/2011 - 14:04 | 1011962 AN0NYM0US
AN0NYM0US's picture

the same way Wells Fargo / Wachovia did with the cartels


and Madoff did with JP Morgan



Wed, 03/02/2011 - 14:18 | 1012074 Bob
Bob's picture


Wed, 03/02/2011 - 14:20 | 1012087 JW n FL
JW n FL's picture



if it wasnt for those pesky planes they bought... they would have gotten away with it.

Wed, 03/02/2011 - 16:43 | 1012663 ms1408
ms1408's picture

Regulations are for the competitors of the too-bigs only. Why do you think they lobbied to give the Fed unlimited regulatory powers. Try to start a hedge fund and do what these JPM gets away with and you'll be locked up in no time.

Wed, 03/02/2011 - 18:20 | 1013034 Careless Whisper
Careless Whisper's picture

WellsFargo/Wachovia didn't notice the $378 Billion being laundered. But if you operate the corner bodega and do wire transfers without a license you're getting prison time;


Wed, 03/02/2011 - 19:11 | 1013214 Zero Govt
Zero Govt's picture

Spot On. Regulation is nothing but a cunts game and anyone thinks legislation, regulation or any rules for that matter is anything but control leavers for The Parasite Club is too bloody naive for words

Martin Armstrong has also said New York is a racket, that the NY Fed and SEC have been shutting down out-of-town operations that provide too much (too good) competition to the NY/WS clique for decades

Regards banks and dodgy regimes how does any Western arms dealer repatriate monies through the Western banking system! Are their staff guilty of ill gotten gains when paid their wages? 


Wed, 03/02/2011 - 13:57 | 1011965 AldoHux_IV
AldoHux_IV's picture

I'm sure the federal reserve helped in this manner-- it's why we can't give the villains more power.  They only aid in destroying anything decent in this world.

Wed, 03/02/2011 - 19:11 | 1013215 Crumbles
Crumbles's picture

Obviously, the Colonel is TBTF ...

Wed, 03/02/2011 - 13:59 | 1011971 MiddleMeThis
MiddleMeThis's picture

Duh, the rules don't apply to the elite, in any country.  Nuff said.

Wed, 03/02/2011 - 14:09 | 1012037 flacon
flacon's picture

Laws are meant for "We the People" not for our kings, queens, politicians, presidents, prime ministers, and wanker-bankers. OUr masters need space to do their "tinkering" with our fantastic plastic economy and our trashy cash.

Wed, 03/02/2011 - 13:58 | 1011973 trav7777
trav7777's picture


JFC, they freed the Lockerbie bomber for oil, Saddam used oil vouchers for a decade to circumvent sanctions

Wed, 03/02/2011 - 14:02 | 1011987 karzai_luver
karzai_luver's picture

nah, that dude is dead and buried of cancer, right???




what a fuking joke of a charade that whole weasle assed move was.


Wed, 03/02/2011 - 13:59 | 1011975 buzzsaw99
buzzsaw99's picture

Money laundering like Sack and Frost do almost every day?

Wed, 03/02/2011 - 14:00 | 1011978 sabra1
sabra1's picture

laundering money or printing money, what's the dif?

Wed, 03/02/2011 - 14:02 | 1011990 Dr. Porkchop
Dr. Porkchop's picture



It's all dirty money in the end.

Wed, 03/02/2011 - 14:04 | 1012001 karzai_luver
karzai_luver's picture

Rules...RULES....for the little peeps only.


This shite is national security, bithcez!


Wed, 03/02/2011 - 14:09 | 1012034 Oh regional Indian
Oh regional Indian's picture

Winning companies don't adhere to the rules.

They adhere to the rulers...


Wed, 03/02/2011 - 14:27 | 1012113 newworldorder
newworldorder's picture

Printed money carries a "vig" the minute it leaves the printing room, FED.

Laundry money has to first be taken to a bank in order for the "vig" to start.

You guys need to know these things.

Wed, 03/02/2011 - 14:02 | 1011993 Shameful
Shameful's picture

Uh, the laws only apply to the little people.  I thought everyone knew that...

Wed, 03/02/2011 - 14:32 | 1012138 carbonmutant
carbonmutant's picture

 LOL... I missed your post.

Wed, 03/02/2011 - 14:05 | 1012005 GottaBKiddn
GottaBKiddn's picture

The regulations are window dressing for racketeering.

Wed, 03/02/2011 - 14:29 | 1012126 newworldorder
newworldorder's picture

No, its not racketeering; - Its called BANKING.

Wed, 03/02/2011 - 14:58 | 1012210 AZSovreign
AZSovreign's picture

Ron Paul had is chance to blow it WIDE open today and he did.... NOTHING!!


Ron Paul is controlled opposition!

Wed, 03/02/2011 - 15:30 | 1012323 DB Cooper
DB Cooper's picture

Controlled disinformation - he gets his chance and asks what is the definition of money?  wtf - he's a fraud.

Wed, 03/02/2011 - 14:04 | 1012010 Translational Lift
Translational Lift's picture

TBTE is the answer.......Too Big To Enforce.....I wonder how many people were paid-off to look the other way on this (and other similar) cases.

Wed, 03/02/2011 - 14:05 | 1012012 Thorny Xi
Thorny Xi's picture

Islamabad—The United States, Britain and France have sent several hundred “defence advisors” to train and support the anti-Gadhafi forces in oil-rich Eastern Libya where “rebels armed groups” have apparently taken over.

According to an exclusive report confirmed by a Libyan diplomat in the region “the three Western states have landed their “special forces troops in Cyrinacia and are now setting up their bases and training centres” to reinforce the rebel forces who are resisting pro-Qaddafi forces in several adjoining areas.

A Libyan official who requested not to be identified said that the U.S. and British military gurus were sent on February 23 and 24 night through American and French warships and small naval boats off Libyan ports of Benghazi and Tobruk.


Wed, 03/02/2011 - 15:11 | 1012249 slewie the pi-rat
slewie the pi-rat's picture

this is a winner, Xi! 

9-10 days ago, these agents were "sent in", or so say sources from...uh,...Pakistan?  these are not rumors!  this is TRUE, b/c it has been CONFIRMED by a libyan diplomat who is in some "region" and (?) a libyan "official" also? 

those seemingly successful "rebel armed troops" who have "apparently taken over" in E. libya, may be in for some snuff-film surpises, eh?  plus, is it only slewie, or do others also see that James Coburn thingy going on with the mo-gadfly?  if i'm even luke-warm w/ a lucky guess, here, bilary will look fabulous as she successfully negotiates the agents back to the safety of their interlocking mossad spy networks and international banksters who, it appears now, may be using nations as "agents". can this be t-r-u-e???

how freaking crazy have i gotten here, sports fanZ???  here's a woman so formidable, she admitted to being a texan:

YouTube - Janis Joplin - Piece of My Heart [live Woodstock]



Wed, 03/02/2011 - 20:56 | 1013516 Crassus
Crassus's picture

And we're 2-0.

Wed, 03/02/2011 - 14:09 | 1012016 JW n FL
JW n FL's picture

Know Your Client!!!!!

which really is..

which really is..

which really is..


someone will go free and un-charged of $30 Billion Dollars worth of Money Laundering!


God Bless the Bankers!

Wed, 03/02/2011 - 15:17 | 1012268 ft65
ft65's picture

Quoting JW n FL / GLP ^TrInIty^ >>Know Your Client!!!!!

Amen ^TrInIty^ ... I mean JW

Wed, 03/02/2011 - 15:44 | 1012389 JW n FL
JW n FL's picture

It is to, too bad that you have lost your ability to advertise for yourself after everyone of my posts.


Wed, 03/02/2011 - 22:18 | 1013704 sgt_doom
sgt_doom's picture


Of course, everyone realizes that the reason the prime money laundering global banksters created the Wolfsberg Group, to develop all those AML (anti-money laundering regs for the UN, etc., Egmont Group, IMF, etc., etc.) was to control the global money laundering, not to alter or stop it in any way.

As we all know, almost all of those banks have before and since then paid penalties for money laundering, but nobody ever, ever goes to jail.

Wed, 03/02/2011 - 14:07 | 1012020 walküre
walküre's picture

40+ years he was a good client.

Now the US government is bankrupt.

The Nazis confiscated the wealth of all jews to finance their war effort.

Same strategy, different approach

Wed, 03/02/2011 - 14:14 | 1012051 Shameful
Shameful's picture

Call me old fashioned but why are they keeping all that loot in banks?  Now if I was a power mad dictator, I got to think I would commission a massive vault to house my loot (aka gold) in an isolated area.  Then have the builders killed, and then the killers killed, then maybe those killers killed for good measure.  But I suppose maybe they have and it's the secret emergency stash.  But this flying stuff out at the last minute and getting accounts frozen says to me these guys were not thinking long term.  How unprofessional, I bet our oligarchs are way smarter :)

Wed, 03/02/2011 - 14:27 | 1012114 velobabe
velobabe's picture

exactly, money the ultimate S T U F F †

where does a king hide his loot? just start being naked, is my solution. you got to be comfortable just being nude. solution solved. plus, shameful (not me), if i had police or national guard pointing rifles @ me, i would ask them if i could take my clothes off before they killed me. i think that would be a great way to go. they shot her dead, naked.

Wed, 03/02/2011 - 15:24 | 1012291 Joeman34
Joeman34's picture

Virtually every one of your posts is about sex.  Are you frustrated?

Wed, 03/02/2011 - 14:36 | 1012148 Confused
Confused's picture

It seems to me that this whole business with accounts being frozen, and escaping by plane, just shows how interconnected the crooks really are. 


But you do bring up an interesting point. If you are in the game, why trust someone to hold your wealth for you? 

Wed, 03/02/2011 - 14:47 | 1012178 Antipodeus
Antipodeus's picture

Trade isn't the only thing which has been 'globalised'.


Wed, 03/02/2011 - 14:18 | 1012073 JW n FL
JW n FL's picture

Go-Daffy was a savings account that the Goobermint needed to bust open..


Wed, 03/02/2011 - 14:09 | 1012030 walküre
walküre's picture

DBO is your friend.

Wed, 03/02/2011 - 14:11 | 1012038 redpill
redpill's picture

If you have enough money, they rules don't apply.  You couldn't have asked for a more stark example than the last 3 years in global finance.

Wed, 03/02/2011 - 14:14 | 1012050 velobabe
velobabe's picture

tylers, guess what? you have gotten over 1500, fifteen hundred new twitting people following your twitter page. this is after i announced for everyone to become a follower of you guys on the tweeter. so are we going to brake/break 20,000 followers by weeks' end? i speculate, Y E S  w e  C A N. you are the real deal and the numbers show this. you will probably take over as number one choice for all things considered

NEWs, bitchez†

Wed, 03/02/2011 - 14:22 | 1012095 Bob
Bob's picture

Way ta roll, vb!

Wed, 03/02/2011 - 14:16 | 1012056 Azannoth
Azannoth's picture

If you play 'by the rules' you're guaranteed do loose, it's a simple as that but so few people seem to understand it

Wed, 03/02/2011 - 14:31 | 1012131 velobabe
velobabe's picture

man, that is absolutely right. i can attest to that. i have played by the rules and got so gang raped, my whole life. but it is reflection and direct experience that is golden.

Wed, 03/02/2011 - 14:15 | 1012058 zaknick
zaknick's picture


"money laundering" is for funding the redneck drug warriors

google " policing for profit" "the drug war's hidden economic agenda" by prof eva nielsen

the dea, fbi, atf etc all are "self-financing police agencies"...

Wed, 03/02/2011 - 14:17 | 1012062 lsbumblebee
lsbumblebee's picture

It was probably a reward for his help in The War On Terrorism.

Wed, 03/02/2011 - 14:32 | 1012135 Rick64
Rick64's picture


Wed, 03/02/2011 - 14:17 | 1012066 Iam Rich
Iam Rich's picture

Simple.  GS and Citi simply don't give a shat about their country.  "They" have no moral or ethical compass.  They must be broken.

Wed, 03/02/2011 - 14:39 | 1012161 newworldorder
newworldorder's picture

They are broken. The Politicos do not want to fix them. Justice department knows this, -  they will not kill their careers for such nebulous concepts as the "rule of law."

Better to play with all the new toys chasing drug lords and fighting the "good war" on drugs.

Wed, 03/02/2011 - 22:23 | 1013723 sgt_doom
sgt_doom's picture

Not to disparage your comment, but a more trunchent explanation may be:

Who is the largest owner of JPMorgan Chase?




Baxter Pharmaceuticals and Baxter International?

Morgan Stanley?

The principal financing behind the Council on Foreign Relations?

The Trilateral Commission?

The Group of 30?

The Bretton Woods Committee?

The Peterson Institute?

Geez, could it possibly the Rockefeller family?

As Keyser Sose said in The Usual Suspects,

"The greatest trick the Devil ever pulled was convincing the world he didn't exist."

With over 35 tax-free holding companies called foundations, endless trusts and offshore finance center financial constructs, they have succeeded.

Wed, 03/02/2011 - 14:18 | 1012071 z tranche
z tranche's picture

I love that ZH is asking/reporting on the right questions.  You make a mockery out of US journalism, Msrrs. Durden.

Wed, 03/02/2011 - 14:24 | 1012078 Mercury
Mercury's picture

At least 97% of contemporary compliance culture within (especially large) financial institutions is bullshit.

The sjop I worked for in 2009 was owned by one of those giant U.S. banks that just blew up one day.  All kinds of ugly things revealed when that tide went out.

But they had been in full compliance the entire time.

Wed, 03/02/2011 - 14:18 | 1012083 SumDumGuy
SumDumGuy's picture

Just don't try to take $10k out of your bank without giving a DNA sample.

Wed, 03/02/2011 - 14:23 | 1012084 luk427
luk427's picture

They will be reading about these crooks in history books years from now. If they gave Madolf 150 years Blankfein and Dimon should get 1500.

Wed, 03/02/2011 - 14:23 | 1012098 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Gadaffi is still liquidating his NEM position?

Wed, 03/02/2011 - 14:27 | 1012107 Milton Waddams
Milton Waddams's picture

Sorry but the SEC is busy reviewing the fifteenth million SB-2 filing from a candlemaker upstart. Anonymous could learn a thing or two about DDoS from the boyzzzzz....

Wed, 03/02/2011 - 14:29 | 1012125 Misean
Misean's picture

You're joking of course. With the academy awards over, Vivid has just unleashed its versions. There's a lot of viewable new hours to download.

Wed, 03/02/2011 - 14:30 | 1012118 Misean
Misean's picture

"one is forced to ask what purpose they really serve."

Well, not really. All regulation is a barrier to entry created by the large industrial players. What's shocking is  that people actually believe government is established to provide for the public good/interest. After all these recorded centuries...

Wed, 03/02/2011 - 14:30 | 1012132 carbonmutant
carbonmutant's picture

"anti-money laundering provisions" are for the little people...

Wed, 03/02/2011 - 14:42 | 1012169 newworldorder
newworldorder's picture

... as well as those that refuse to pay the banksters for protection.

Wed, 03/02/2011 - 14:36 | 1012153 ZeroPower
ZeroPower's picture

The truth.

My guess, is zere AML procedures were applicable. Show a private banker a 1Bn+ investment and you're golden.

Wed, 03/02/2011 - 14:49 | 1012185 Quinvarius
Quinvarius's picture

I guess HFT algos were fueled by Gaddafi's billions judging by the way the markets have been acting since the assets were frozen.

Wed, 03/02/2011 - 14:51 | 1012187 gdogus erectus
gdogus erectus's picture

I like this new trend that is developing -

Who is starting to get more and more bad press in the MSM?
    a)  Goldman Sachs and other top banks
    b)  The federal reserve
    c)  The US regulators 

Why would TPTB allow this campaign in the MSM to begin?

To show the world that:
A)  The US banks are responsible for the global mess that we're in
B)  The US is not capable of policing itself
C)  The US dollar should no longer be used as the world's reserve curency  (all the seemingly unlikely people coming out lately saying that we should be on a gold standard)
C)  The Federal Reserve is ultimately responsible

Why would they sacrifice the Fed and the corrupt banks?
A)  To propose a world governed system
B)  To make the IMF in charge of US banking
C)  To usher in a new fractionally gold-backed currency

Who owns the IMF/BIS/Federal Reserve? - the Bank of England - which is owned by the Rothschild's who just happen to own most of the world's gold.

A brilliant plan, no?

/tfh off

Wed, 03/02/2011 - 15:41 | 1012370 Irwin Fletcher
Irwin Fletcher's picture

That's an interesting thought, but if the Rothschilds and other Bilderberg folk are already pulling the strings, why rearrange into a world government? That's a risk, but what's the reward? They're pillaging now, and it's working. What's broke, and why are they and their elite accomplices trying to fix it?

Wed, 03/02/2011 - 18:27 | 1013056 gwar5
gwar5's picture

Depopulation. There's too many of us and we've already built the infrastructure for them.  

Wed, 03/02/2011 - 19:04 | 1013188 gdogus erectus
gdogus erectus's picture

Fear.  They are constantly worried about being discovered.  (as they should be)  I think they want to transition from stealth control to physical control.  Just because they've bitten us (sheeple) on the neck and we're all paralyzed doesn't mean they don't want to wrap us up tight for snacking later.  I'd like to finish with a thought:  intuition is telling me that their plan will not work in the end.  Yes, we'll have financial collapse but too many of us are waking up to their end goals.

Wed, 03/02/2011 - 19:28 | 1013281 SilverBaron
SilverBaron's picture

They think they are the smartest guys in the room, but they are being played by someone much smarter.  Their strings are being pulled by Lucifer who knows the time is short.

Wed, 03/02/2011 - 14:52 | 1012190 One Ton Lady
Wed, 03/02/2011 - 15:05 | 1012233 luk427
luk427's picture

On a positive note Mandy Drury is sitting in for Erin Burnett.

Wed, 03/02/2011 - 19:56 | 1013379 mynhair
mynhair's picture

In, or on?

Wed, 03/02/2011 - 15:20 | 1012275 BobPaulson
BobPaulson's picture


Wed, 03/02/2011 - 15:20 | 1012282 ietalon
ietalon's picture

Maybe you should ask David Rubenstein or Steven Schwarzman? They have been known to manage messy back room deals. They have been seen partying with the Gaddafi, Blakestein, Diamond and the Bushites.

Wed, 03/02/2011 - 15:23 | 1012292 bankonzhongguo
bankonzhongguo's picture

Good people forget that our man Noriega in Panama was only deposed when he threaten to nationalize all those peculiar Panamanian banks - JPM, Citi, etc included.

Things get done in this world on a barter triangle of guns-gold-drugs.  The "money" sitting in the bank is just icing on the power-cake - its the inducement to simply do something for someone because they are rich - not because you will be paid.

It will be fun to watch to see IF any MSM reporter ever follows this story.

Maybe after the blood is washed off the Tripoli sidewalks and Libya is split like Sudan.

Wed, 03/02/2011 - 15:54 | 1012440 Drashta
Drashta's picture

How did he do it? One blind eye and a wink.

Wed, 03/02/2011 - 16:14 | 1012533 proLiberty
proLiberty's picture


"...And yet if the AML procedures, to which we are all subjected, have not been applied rigorously to the likes of Col Gaddafi and his family, one is forced to ask what purpose they really serve...."

They serve as the excuse to impose full KYC protocols on the little people, by which the US IRS can impose tax hegemony on US Persons, no matter where in the world they attempt to “go Gault.”

Wed, 03/02/2011 - 19:57 | 1013382 mynhair
mynhair's picture

Didn't Go-Daffy invent NFLX?  Or was that Algore?

Wed, 03/02/2011 - 21:39 | 1013598 nmewn
nmewn's picture

"we suggest the following contrarian thought experiment: let's cut its budget to zero and see how long before anyone notices)..."

Man I love this site.

"but out of the UK, where a reader writes in to the FT (oddly enough, partially owned by the Libyan Investment Authority).


Wed, 03/02/2011 - 22:15 | 1013697 Problem Is
Problem Is's picture

"Bypass US Anti-Money Laundering Rules To Bank With Goldman..."

Because Lloyd Is Doing Allah's Work
Where ever there is a slimy buck to be made...

You can  be assured Shoeshine Lloyd, the Morey Amsterdam of banksters, will be there with that limp dick nasal voice, snivelling and whining for his unearned share of the loot...

Wed, 03/02/2011 - 23:38 | 1013917 eatthebanksters
eatthebanksters's picture

After reading this article and the comments I  reflected back on the ZH article about legal vs. moral and ethical.   It's interesting, what's the difference between an armed robber holding up a bank for cash and a really smart group of rich dudes ripping off the system for billions/trillions?  They are both thieves.  What's the difference between a street walking prostitute and a goldigger,who is not in love, marrying a sugardaddy for his money?  They're both whores.  The difference in both cases is the first example is breaking the law!  What's truly amazing is that the ones who are breaking the law are at least HONEST about what they are doing!  Food for thought!

Thu, 03/03/2011 - 01:04 | 1014116 tony bonn
tony bonn's picture

gaddafi was exempted from aml because he is a client puppet of the cia-banking-military-industrial complex....pull your fucking heads out of your butts wasn't snafu - it was plan and policy to exempt allies from onerous long as gadaffi kept the oil flowing his crimes were ignored...

laws are for the little people....the same suppression of laws occurred when the cia-sponsored al-qaeda planned its attacks on the = cia....maybe that's why gadaffi is up in arms about al-qaeda....

Thu, 03/03/2011 - 02:50 | 1014291 slvrizgold
slvrizgold's picture

I agree wholeheartedly.  Cut the SEC budget to zero and see how long before anyone notices.  My guess is never.  They are worthless and weak.

Thu, 03/03/2011 - 07:12 | 1014407 chindit13
chindit13's picture

Perhaps the family members of the Lockerbie victims can file lawsuits against the firms and CEO's of firms who seem to have violated AML laws by handling Libya's and Qadhafi's money (Lloyd Blankfein, Jamie Dimon).  There is precedent.  The victims of the Mumbai LeT massacre a few years ago have filed a lawsuit against General Pasha, the head of Pakistan's ISI, who has been accused of aiding Lashkar e Taiba. (As a sidenote, the USG has tabled an offer to grant Pasha Diplomatic Immunity if Pakistan grants the same to Davis.)

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