On Rats

Bruce Krasting's picture

A few background facts to make a point:

Way back in 2007 a fellow by the name of Herve Falciani was working as a computer guy for HSBC in Geneva, Switzerland. He stole the bank records of 24,000 customers who were stashing money. Herve gave the list to the French IRS and it ended in 2009 with 3,000 French citizens getting whacked very hard. It also caused a big stink between Paris and Bern. The Swiss don’t like it when people steal information that is, by Swiss law, secret.

Herve became a bit of a hero in France. He went on TV and said he did what he did without getting paid for his efforts (a claim that I always doubted). Later he moved to Barcelona.

He was arrested on July 1. The Swiss government formally requested extradition back to Switzerland on July 5 so that he could stand trial. It will be interesting to see if the Spanish are going to resist the extradition request (it has no valid reason to resist). It looks as if poor old Herve is going back to Switzerland, where he will stand trial for his crimes, and he’s going to jail.

There are a number of stories similar to this one. In 2010 another guy stole records from Credit Suisse and turned them over to the Germans. This time the fellow got paid E2.5m for his efforts. But unfortunately he never got a chance to spend it. He went to prison, where he committed suicide.

The most recent example came on July 19, when it was revealed that that tax authorities in North Rhine-Westphalia, Germany, paid over $4m in cash to yet another guy who had stolen data. This time it was Coutts bank in Zurich that got “robbed”.

The most recent example (and the extradition of Herve) are causing a very big stir between the Swiss and their neighbors. The Swiss president, Widmer-Schlumpf, has been trying to negotiate a tax treaty that would prevent Germany from paying a bounty to have information about tax cheats stolen. The latest development makes a sham of her efforts.

I bring this up as I find it all very curious. I also bring it up because the US is going in exactly the same direction. It is hiring bounty hunters to track down tax cheats. The problem with the US whistle blower effort is that it has not produced any meaningful results.


One powerful US Senator is doing his best to light a fire under the IRS. Senator Grassely (R. - IO) wrote the following letter (link: PDF) to the IRS Commissioner in an effort to bust some folks and collect some dough.




Grassley would like to hire "Blackwater" to kick some ass and collect some taxes. That kind of black shirt, vigilantism scares the hell out of me.

If these kinds of tax collecting techniques are what is really necessary, then its time to junk the existing system, and replace it with a consumption tax.

We don’t want more rats looking at garbage (and hard drives) for secrets. There's too much of that already.




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malek's picture

Curious Bruce doesn't mention the LGT case, where the rat even got a new identity from German authorities, to the best of my knowledge.

goat's picture

Banksy, bitchez!

krispkritter's picture

Seems like all the .gov's are going to be looking at the little guys for more taxes as they squirrel their MBT's(Millions, Billions, Trillions) away where even the largest anal searchlight won't find it.  This is from The Telegraph:


Where a certain ex-tax tax lawyer(married to a current tax lawyer) is stating it's 'immoral' to pay someone under the table. 

And some push back:


What's funny about these articles is all the mention of Ron Paul and his ideas on .Gov and taxation that are in the comments. I think .Gov is gearing up for more raping of the Muppets since they're spending like booze-addled, well, poiticians, with a Muppet ATM in tow and SOMEONE ELSE is gonna get stuck with the bill...

Stuck on Zero's picture

The U.S. will have to switch to a consumption tax or go bankrupt.  Every other country in the world has a VAT and it applies to U.S. products sold in those countries.  That is like a tariff.  We do not have a consumption tax so foreign products are sold without the tax.  That is like a subsidy on foreign goods.  Are we nuts or what?


2discern's picture

So, let me understand-offshore accounts kept from IRS thugs are to be exposed so the IRS can give the money to illegal Mexicans (yesterday's ZH article) through legal tax filings with fraudulent information stealing tax payers revenues for their own kin still in Mexico. Ummm?

Hannibal (A Team fame)" I love it when a plan comes together".

CH1's picture

Tax = Theft.

Whoever may escape, let him escape!

RichardP's picture

Tax = Theft.

Using services provided by others that you haven't helped pay for is also theft, right?

Do you really believe that you are so special that you should not have to pay for any of the services you receive that you didn't create yourself?

The truth is, no one can escape the services provided by others, even if you move to a so-called third-world country.  You can't even escape those services if you are living alone at the artic circle, living by your wits.  Who paid for you to get those wits (who paid for your education)?  You think you have a right to the knowledge you posses without owing anybody anything for collecting the knowledge and giving it to you?

No matter where you chose to live in the world, fairness dictates that you owe at least some taxes for the services you receive.  Don't know what services you receive?  Educate yourself.

StychoKiller's picture

Newsflash:  Life is NOT fair!

The Navigator's picture

Fairness dictates that you owe at least SOME taxes???

By whose standard WHAT is fair? 50%?, 60%? Because that is what I pay in City, County, State and Federal taxes, between 50-60% IS THAT FUCKING FAIR?????

Is it fair that I pay into the shitiest puplic school system when my child goes to a private school? I pay twice for my childs education, IS THAT FUCKING FAIR??????

Taxes = Theft at gunpoint - if I don't pay, they confiscate my property and throw me in jail.

FUCK YOU and your SOCIALIST Eutopia - and grow up, fairness dictates NOTHING.

earnyermoney's picture

Read the letter. Did not see any reference to Blackwater, Xe, in the letter or your post. Care to provide a link?

Let's assume Grassly wants the services of Mr. Prince. I believe Xe's owner resides in the ME, no doubt for the low tax rates. Xe would probably get a 20% cut of the spoils. I wonder how Denise Rich, Jon Corzine and Warren Buffet would hold up under "enhanced interrogation" techniques in all those secret black sites around the world?

Divine Wind's picture




Xe has changed names and is now formally known as Academi.


These are great people. Most of their operators are solid patriots and respectable human beings with particularly specialized skills sets.

Take a class from them. You will have some of the best in the world as your instructors.



Getting Old Sucks's picture

I live on my already taxed savings.  I lose thouands a year thru ZIRP.  Now you want me to pay a tax when I spend my already taxed savings?  Sheesh!  Life is taking forever.

otto skorzeny's picture

Grassley needs more tax revenues to funnel back to the subsidized farmers in Iowa and the ethanol producers that he and his butt-buddy Durbin (D-IL) whore themelves out to. these fuckers are getting desperate for tax $-I love it-STARVE THE BEAST by only buying essentials.

barliman's picture



      Blackwater changed their name YEARS ago ... and they are not in the "getting data from Swiss banks" games in any case.

IF the government wanted to actually recover the taxes it feels it is owed ... they would run the last 5 years of global financial  data through "Palantir" with the appropriate filter settings.

POOF! ALL the answers would drop right in their laps.

Problem is ... they don't want EVERYONE identified ... just the FOLKS they want to LEAN ON for a campaign contributions.


Divine Wind's picture


I wonder if Palantir is an In-Q-Tel baby? 

How fricken awesome it would be to play in THEIR sandbox.



otto skorzeny's picture

everyboby knows these genocidal baby-killers by the name Blackwater.

sodbuster's picture

The system is the way it is, because that's the way CONgress wants it. If they wanted it different, they would change it. But they don't. We have the BEST CONgress money can buy!!!!!!!!!!

Dr. Sandi's picture

Not even. The best lowlife are already taking money to operate other parts of the society's structure. Only those who are too brain damaged or idealistic are left over for congressional candidacy. The worst of a sorry lot.

Ned Zeppelin's picture

And why should  I care about American tax cheats?

covert's picture

I personally have info about this event:

1. he was in prison and given a pardon

2. he was paid a huge sum of franks

3. he was given protection

I was there.


Bob's picture

Something to do with Liberty, they say.  Now go fight it out, kids!

Benjamin Glutton's picture

Well if you find that disturbing then you will love the Hire Act provisions enacted for 2013.


As always criminal enterprises are fine until you get caught as long as you pay your taxes.



rumblefish's picture

Is there a better copy of that letter. It's blurry when I open it?

timbo_em's picture

"The safest way to make laws respected is to make them respectable." Claude Frédéric Bastiat

Yet, there will always be some crooks who give a rat's ass about the law. But Blackwater is not the right way to deal with them.

Wakanda's picture

"...replace it with a consumption tax."


I suggest a filter to remove the flouride from your municipal drinking water.


Grow a pair Bruce.

HoofHearted's picture

Have you ever looked at the results on VATs and economies? It is just crazy enough it might work. (Of course you should also look at the results on shadow economies...)

Bruce recognizes that there are some functions a government must do. You have to pay for that. Now Bruce likely thinks the government needs to do more than I think it needs to do, but...I'm happy to pay for a reasonable military. I'd prefer our roads to all be toll roads that are individually owned, but that may not be practical today. Personally I'm all for secession of a portion of the States from the reast of the US and a repudiation of all debts for that seceding portion. Let DC keep the shit they wanted and keep the debt with it. But what the hell do I know?

Wakanda's picture

Imagine a world where every transaction is voluntary.

Imagine a truly free market.

Imagine not being ruled by anyone, where association is by choice, not by coercion.

Imagine failing or succeeding on merit and luck.

Imagine living from one's own heart.

The Second American Revolution - unfolding now in a neighborhood near you.

TPTB_r_TBTF's picture

hey Bogart, pass that joint.  I wanna somawhat you're smokin...


Wakanda's picture

Hey, if we don't dream it, who's gonna'?

falak pema's picture

Amazing, there are 25 T stashed away in tax havens and these shills have embezzled the world.

And all we talk about are tax rats. If the government closed down the tax havens the taxes would get paid. With the complicity of ALL governments of first world we have had City/Jersey/Guernsey, Monaco/Luxemburg, Andora, Liechenstein, SW, Caymans et al. playing this game unabashedly.  Storing corporate and oligarchy wealth for decades.

The same criminal shills in government,  who look the other way with their crony lobbyists, play at Elliot Ness with the faceless tax evaders.

This whole scam is so blatantly run by governments for their pals that it makes these sham tax ratting acts appear for what they are : an irrelevant diversionary scam, with its bogey men fall guys! Like in a B gangster movie.

I don't buy it and I'm astonished that BK talks about it. Its just like the graffiti on the walls, irrelevant in substance but not in form as silent mementos of the sad state of our ghettos. Just the epsilonic indicator of the much bigger, mega dystopian social reality.

If we did what we say, as democracies, that respecting the law and its effective implementation are vital,  applied to all irrespective of station, we would NOT have tax havens in first world. We would not have the financial scam of neo feudalism which stinks to high heaven today.

So the rats BK talks about is just graffiti on our walls of civilization decadence. 

StychoKiller's picture

It's difficult to make a FBI agent see a broken law when (s)he's being paid not to see it.

MrBoompi's picture

The total indebtedness of the world probably comes close to all the money held in offshore accounts.

I say we erase it all at the same time.

Big Ben's picture

The Swiss intelligence agencies should just create a bunch of counterfeit bank records showing that lots of high level politicians in various countries are big time tax cheats and then recruit some bank employees to sell it to the IRS agencies around the world.

agent default's picture

Counterfeit?  You mean there are no real records of US politicians?  But I do like the idea of poisoning the data pool.

HoofHearted's picture

I'd take a low level position at UBS in order to do just that.

agent default's picture

In the end they will end up blowing the whistle on themselves with this kind of crap.  If they want to see the money return to the US thhey should just make the US more attractive to capital.

bugs_'s picture

really Blackwater?  why not DAWG?  A new episode of Tax Cops!

it does look like Grassley is looking out for a big time whistleblower who didn't get their 30 pieces of silver soon enough.  The IRS is clearly using all the funds for party and travel to conferences in Miami.  Sounds like maybe there ought to be a few more whistleblowers revealing what GOVERNMENT is doing with their pile of coins.

So we need a whistleblower on the whistleblower compensation program and we are worried about some Academi guy kicking a Romney in the butt over his Swiss/Cayman hoards?

MillionDollarBoner_'s picture

Tax is for little people...

apberusdisvet's picture

But what do rats do when the ship starts to sink?

disabledvet's picture

I hate "people rats" too actually...always screaming "he did it!" at the worst time. Real rats on the other hand...

ihedgemyhedges's picture

Why would a consumption tax be good for me?  I would lose all my friends and influence.

Sincerely, Your Random Politician in Congress

Divine Wind's picture



I lived in Taiwan for several years and have always thought their consumption tax system was brilliant.

Under such a system, the merchants collect monies during a purchase and in turn pay the tax bureau.

In order to make sure the merchants are paying the proper taxes, receipts for purchases are standardized and contain a unique lottery number. The national lottery is held monthly for cash prizes. The winning numbers are published in the newspapers.

Consumers are fanatical about collecting a receipt for every purchase. I was.

This forces the merchants to participate and in the national tax payment system in an honest and forthright way. In the end, it is incredibly difficult to jack the system around and the gubment gets their money.

While Taiwan certainly has its share of problems, I think this is one of the many brilliant aspects of their country.



Mediocritas's picture

That lottery ticket idea is genius! Standardized receipts is also a nice idea.

AnAnonymous's picture

And why that?

It will stand until it is discovered that a consumption tax does not gnaw at US citizen politicians'influence.

smiler03's picture

I think I need an eye test. It's like looking through vaseline coated glasses trying to read that document.