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How to Launder Money - Swiss Style

Bruce Krasting's picture




 

 

An interesting crime story has come out in France and Switzerland. It may prove to be the nail in the coffin for bank secrecy in Switzerland.

 

The Swiss and French police arrested seventeen individuals a week ago (including an assistant Mayor in Paris). A woman (known only as “M”) is the center of attention of a drug smuggling ring. Apparently she ran a very big operation smuggling marijuana from Morocco into France.

 

Authorities followed the money from the drug operation from France to Geneva, Switzerland, where the loot was laundered through HSBC and GPF SA (never heard of them). This was a family affair; M’s brothers were working for the Geneva based banks.

 

The money laundering operation is an interesting part of the story. The sequence of events:

 

A) The drug operation generated big amounts of small denomination Euro bills.

 

B) The cash from drug sales all over France were brought back to Paris.

 

C) M’s brothers in Geneva knew wealthy individuals in France (and presumably Germany too) who had “Black Accounts” in Switzerland. (Nothing to do with the drug smuggling)

 

D) Individuals who have Black Accounts in Switzerland have a noose around their neck. Switzerland (with a gun to its head) is negotiating tax treaties with all of its neighbors that would result in divulging the “names” of the account holders.

 

E) European Black Account holders know the clock is ticking. They know the result will be that they will lose all, or a big part, of the money they have stashed in Swiss banks. (That’s what happened to the US “names”)

 

F) Black Account holders want their money back, but they can’t transfer the money to another bank, as bank wire transfers are completely transparent to authorities.

 

G) The only solution for Black Accounts is to get access to cash. This is very hard to do, as there are guards on Swiss borders, and one can’t really trust the Swiss bankers any longer.

 

H) Enter M and her brothers. They provided the following services:

 

- M (and her agents) covertly delivered cash money to wealthy individuals in France.

 

- In return, the Black Accounts were debited (or closed) in Switzerland.

 

- The money from the Black Accounts was transferred to a separate account controlled by M’s brothers.

 

- M’s brothers are Swiss citizens, and as a result have banking secrecy laws that protect them. When the money finally got into the brother’s accounts, the laundering has been completed.

 

- M charged a fee of 8% for the laundering. The drug money was transferred to the black account holders. Everyone was happy with this solution.

 

According to news reports (Link) the amounts involved are in excess of $100Mn. In the scheme of things this is not such a large amount, but is sure makes the Swiss banking industry look bad. The head of the Geneva Financial Center, Bernard Droux, had this to say:

“We were surprised that it should still be possible to do this today. This is a practice that has been forbidden by law for more than 20 years,”

 

"Shocked" you say? Sorry Bernard, this type of scam has been going on for the past sixty years!

 

The Swiss don’t condone this type of activity. The Swiss police contributed to the investigation that led to the arrests. That doesn’t matter, the damage has been done. The fact is that the Swiss banks are still a conduit for laundering drug (and other illegal) money; the Swiss banks are continuing to facilitate capital flight and tax evasion from Switzerland's direct neighbors.

 

Any bargaining position that the Swiss had with the EU countries regarding tax treaties that would have maintained the essence of banking secrecy has been shot to hell over the revelations. Switzerland will have to fold its cards, end banking secrecy and give up the “names” of European black account holders.

 

There are an awful lot of people who are crapping in their pants over this development. The list of pant shitters includes any European with a black Swiss account, it most certainly includes a bunch of bankers in Geneva, Chiasso, Lugano, and Zurich.

 

 

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Mon, 10/22/2012 - 23:04 | 2911658 cgagw
cgagw's picture

Items 1 - 12 of 62 – cheap north face is the right place for you to choose superior quality boots for hiking and camping outdoors, all they are with ...

Thu, 10/18/2012 - 21:30 | 2903177 Jiiins
Jiiins's picture

This is what the money changers have been doing forever in Asia (and probably elsewhere) to circumvent capital controls. Want to take money out of Cina? Go to the nearest money changer, who will send the money to his cousin in Hong Kong, who will give it back to you there at 90%. Neat. That's why Asian cities are *packed* with money changers...

 

And by the way, did you know that still today, you can open a bank account with several EU banks *without* passport? Switzerland has been in crosshairs for the past 20 years because it dared staying out of the EU and other political reasons, but it's very clear to any observer with a bit of expertise that if you want to launder a couple of billions, you steer clear of it and just go to London or NY. Or, for smaller scale operations, just set up a few accounts in several small towns in the EU and nobody will ever get you.

Sat, 10/20/2012 - 15:48 | 2906703 Zero Govt
Zero Govt's picture

please let me know the banks, or where, i can open a bank account without a Passport (Govt tag) ...i very much welcome the civil way to conduct business (ie. treat customers like adults) rather than the current suspicuous tosser way of doing biz (ie. treat customers like liars or potential terrorists)

I will reward said good decent banks with my custom

Thu, 10/18/2012 - 20:22 | 2903043 masterinchancery
masterinchancery's picture

The Swiss are screwed, and all for a War on Drugs that is a complete failure, except for building up thuggish government forces.

Fri, 10/19/2012 - 00:53 | 2903478 Dr. Sandi
Dr. Sandi's picture

So it wasn't really a failure at all then. Except for the truth.

Thu, 10/18/2012 - 19:16 | 2902871 Zero Govt
Zero Govt's picture

My British bank was exchanging Sterling for Swiss Francs 10% off spot. Past 2 days in Geneva I exchanged my Sterling at 2% off spot

My pillows, duve and mattress are now rammed with Swiss Francs, my thanks once again to the Swiss National Bank for fulfilling the King Cnute role and allowing me to sleep peacefully (with a big Cheshire Cat grin)

anyone need some feathers and duck down bed filling?

Thu, 10/18/2012 - 18:35 | 2902765 godzila
godzila's picture

Bruce,

Not quite sure to understand your point. Those people have been unmasked and are in jail, awaiting trial and most likely heavy sentencing. On the other hand when Wachovia helped laundered tens of billions of Mexican drug money all what happened in was very limited fine...

http://www.guardian.co.uk/world/2011/apr/03/us-bank-mexico-drug-gangs

I'm not saying that Swiss banking unreproachable but bad actors are taken down.

Thu, 10/18/2012 - 18:28 | 2902752 robnume
robnume's picture

Jump, Fuckers, jump!!!! ANd I REALLY mean it!!! When the U.S. extend and pretend finally blows up, they, too, can Jump!!!! Oh, and btw, they need to GET THE FUCK OFF OF MY PLANET!!!!

Thu, 10/18/2012 - 18:21 | 2902736 Herdee
Herdee's picture

...and it was BC Big Bud you say?

Thu, 10/18/2012 - 18:21 | 2902733 falak pema
falak pema's picture

Lol, replace Swiss by...Luxemburg, Monaco, Liechenstein, Jersey/Guernsey/Isle of Man/City; Caymans, Bermuda, etc.etc.etc.

Bruce is discovering the oldest vice in the world barring sexual slavery. 

When you know who runs the drugs in Morocco and in Afghan, you know who to look for. 

Le poisson pourri par la tête, Bruce! 

Thu, 10/18/2012 - 15:55 | 2902329 PontifexMaximus
PontifexMaximus's picture

By the way, old story, has been published in the papers days ago, big yawn.

Thu, 10/18/2012 - 16:29 | 2902426 THECOMINGDEPRESSION
THECOMINGDEPRESSION's picture

Just goes to show you, NOTHING lasts forever! Everything comes to an end..I mean EVERY scam, lie..government, criminal..

Thu, 10/18/2012 - 15:53 | 2902320 PontifexMaximus
PontifexMaximus's picture

The writer needs some private lessons, although he seems to live in Switzerland, but he definitely is not up to date. But nevertheless, nice writing. Big laundring will always take place in only one place, the US. They protect you. The Swiss are handing over the names, the Yankees won't.

Thu, 10/18/2012 - 15:39 | 2902277 OutLookingIn
OutLookingIn's picture

Government must have their cut!

To not allow them to 'dip their beaks' is stealing

And the government hates thieve's! They can't stand competition!

Thu, 10/18/2012 - 15:40 | 2902261 Divine Wind
Divine Wind's picture

 

 

This is also just one operation uncovered.

Logic would dictate that there are many many others.

The fine art market probably has quite a bit of movement these days as well.

Lots of great art stored up in Switzerland and it is a wonderful way to preserve, and move, wealth.

Transfer money laterally to the Swiss seller, take a cab to the airport, fly to Asia for the weekend and resell to a newly minted Chinese billionaire eager to protect his own stash.

Repeat.

Voila!

Thu, 10/18/2012 - 14:57 | 2902087 Big Ben
Big Ben's picture

I don't see how the "Blood Money" graffiti is appropriate. How is marijuana smoking connected with blood loss?

Second, does anyone really believe that ending Swiss banking secrecy will end marijuana smuggling? Smugglers will always find ways to launder their money. And a growing (pun intended) number of people feel that marijuana should be legalized.

It does appear that Swiss banking secrecy is coming to an end because governments want to raid the contents of the black accounts. But the Europeans are very resourceful and I have no doubt that a minor industry will spring up to help people get their money out of their accounts. The French and Italians are expert tax cheats.

Thu, 10/18/2012 - 19:27 | 2902889 Zero Govt
Zero Govt's picture

the front page of The Times newspaper of Britain on Monday was dominated by a field of 'experts' (ex Police, MI5, brain surgeons etc) reporting to its Govt that the "Drug War is Lost" and that drugs are actually good for you (like smoking in fact)

this follows a U.N. report some years ago, consisting of ex-U.N. Chief Kofi Anan and other wags such as Virgins Richard Branson, also reporting the abject, total and miserable failure of all Govts across the globe to win the war on drugs

we don't need Govt experts to tell us Govt meddling in any facet of the economy or society, not just drugs, is also a total and complete f'ing failure

Let's Bin Govt ...it's a shithole, no better/other place for it

Thu, 10/18/2012 - 14:52 | 2902074 Peter Pan
Peter Pan's picture

Let's not forget that when the GFC hit, the banks of the world accepted a whole lot of drug money to prop up the system. This at least was the finding of a UN report.

Thu, 10/18/2012 - 16:22 | 2902408 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

UniCredito was bailed out by Gaddafi to the tune of billions in the GFC. But the bankers didn't want to pay it back, so NATO jets took to the skies, Susan Rice said "oh oh humanitarian bombing". Gaddafi was about to receive a UN Humanitarian award, dinner with Tony Blair, then all of a sudden he was the worst guy in the world.

Thu, 10/18/2012 - 14:45 | 2902052 Downtoolong
Downtoolong's picture

Meanwhile, three hedge fund managers at Goldman Sachs were fired today for not coming up with this idea first.

 

Thu, 10/18/2012 - 14:23 | 2901975 trichotil
trichotil's picture

cannabis cures cancer and over 100 other diseases:

http://www.medicalmarijuanacure.com/benefits-of-marijuana/

also replaces wood, oil, cotton, plastics, etc. with a far more durable

and affordable product. ford was going to market a car with hemp

plastic body panels and hemp fueled engine:

http://www.hempcar.org/ford.shtml

http://patriotsplant.com/Henry_Fords_Hemp_Car_files/ford-hemp-car-sm.jpg

the dinosaur is a nice touch, lol.

a body panel that you can bounce an axe off of would not be good for body shops:

http://www.hempnow.co.za/Blog/files/henry-ford-hemp-car.jpg

also a big threat to booze and tobacco (smokers who smoke weed too get less cancer).

now you know why it's still illegal.

http://www.healthnutritionexpert.com/HempProducts.html

 

Thu, 10/18/2012 - 16:32 | 2902436 AGuy
AGuy's picture

"cannabis cures cancer and over 100 other diseases"

In the 19th Century it was alcohol that was the Cure all.

It was replaced in the early 20th Century with Radium:

http://www.museumofquackery.com/devices/radium.htm

Why do people believe consumption of intoxicants are healthly?

Fri, 10/19/2012 - 00:50 | 2903475 Dr. Sandi
Dr. Sandi's picture

Why do you not?

Thu, 10/18/2012 - 16:16 | 2902388 New World Chaos
New World Chaos's picture

So the Cheech and Chong weedmobile was real, LOL

Before Big Pharma joined the cabal, reefer madness started out as a conspiracy between DuPont (who didn't want competition from hemp clothing), Hearst (who didn't want to admit he'd made a bad investment by buying up tracts of forest for his papers), and Aslinger (a racist SF cop who wanted yet another excuse to lock up minorities). 

Never mind that you can't get high by smoking hemp.  This fact didn't register with a gullible public and corruptible congress.

Thu, 10/18/2012 - 15:37 | 2902268 Helvetico
Helvetico's picture

In addition to being a magically cancer-free balm for the lungs, pot is great for your short-term, uh, um, er, your short-term, uh, unforgetting thing. Dude.

Thu, 10/18/2012 - 15:16 | 2902179 BigJim
BigJim's picture

And just how do you know the picture of the man attacking the car with a hammer is testing hemp panels' marvellous robustness, rather than (say) just vandalising it?

Thu, 10/18/2012 - 14:31 | 2902007 malikai
malikai's picture

While the evidence for aptosis stimulation in malignant tumors is quite encouraging, it is not suitable to say that it cures cancer.

What you can say for certain is that it is quite powerful at countering some side effects of chemotherapy. Notably nausea, apetite, and some parts of the pain.

I wish it was available to my father in law when he was on his way out.

Fri, 10/19/2012 - 00:48 | 2903471 Dr. Sandi
Dr. Sandi's picture

On a long enough time frame, we're all on our way out. Cannabis should be there for all of us if we choose to use.

Thu, 10/18/2012 - 14:16 | 2901936 Joebloinvestor
Joebloinvestor's picture

So what happened to the brothers?

NOTHING I would assume.

Thu, 10/18/2012 - 14:09 | 2901904 SmittyinLA
SmittyinLA's picture

These scumbags would all be out of business with a 3% tax cap. 

Thu, 10/18/2012 - 13:24 | 2901654 malikai
malikai's picture

Laundering drug money makes swiss bankers look bad? Only in the papers, where pot dealers are criminals.

I'm sure that the accounts that matter will never be touched.

Thu, 10/18/2012 - 13:19 | 2901614 jmc8888
jmc8888's picture

HSBC is the #1 bank for drugs.  Has been for centuries.  Opium wars. Check.  Afghanistan. Check.  Columbia and Mexico. Check.

It even funds are presidential election coffers.  Where do you think Obama got his money in 08 and this year?  It wasn't from individuals donating under 200 dollars.  It was from foreigners throwing their drug money into the campaign.  Usually via the internet. 

Thu, 10/18/2012 - 13:20 | 2901604 Helvetico
Helvetico's picture

Those of you looking for an Islamic connection will be interested in knowing that the bank was run by three brothers named Mardoche, Nessim and Meyer. Perhaps Mr. Krasting can shed some light these unusual names. 

http://www.tagesanzeiger.ch/wirtschaft/unternehmen-und-konjunktur/Die-ElMalehConnection/story/27058821?track

http://www.yabiladi.com/articles/details/13427/trafic-drogue-maroc-suisse-role-trois.html

Thu, 10/18/2012 - 15:12 | 2902162 BigJim
BigJim's picture

'Meyer'?

Sounds like a terrorist to me.

Fri, 10/19/2012 - 00:46 | 2903466 Dr. Sandi
Dr. Sandi's picture

To be frank, his brother Oscar is a weiner.

Thu, 10/18/2012 - 13:06 | 2901551 mind_imminst
mind_imminst's picture

Instead of laundering drug money, they should just focus on being a TBTF bank. Not only would they be protected, they would get bailed out (showered) with billions, even trillions of fiats, while paying fines of just fractions of cents on the dollar.

Stupid war on drugs strikes again. It's many tentacles wreaking havoc in so many different ways.

Thu, 10/18/2012 - 12:59 | 2901492 Barefooted_Tramp
Barefooted_Tramp's picture

I am so glad i am an American because we are so clean when it comes to money and drugs. Thats why we could never ever even think of laundering drug money. That why GOD loves us.

Thu, 10/18/2012 - 12:40 | 2901393 ConfederateH
ConfederateH's picture

HSBC is not a Swiss bank, it is the world's mosty widely recognized money laundering bank.  This is he same HSBC Swiss subsidiary that leaked thousands of names of customers to the French, cooincidence?  I think not.  That this HSBC Swiss subsidiary has been breaking Swiss law comes as no surprise.  Nor is it a surprise that Bruce Krasting would portray this as being an issue of Swiss banking and not of the war on drugs.  Just like he blames tax problems on "tax cheats" and not on the parasitic state he loves and supports.

Thu, 10/18/2012 - 13:20 | 2901623 jmc8888
jmc8888's picture

HSBC is part of the British Empire. 

Thu, 10/18/2012 - 15:11 | 2902158 BigJim
BigJim's picture

HSBC is part of the Oligarch Empire, along with Britain, the US, Switzerland, etc

Thu, 10/18/2012 - 16:26 | 2902419 WTFx10
WTFx10's picture

HSBC is part of the Zionist Empire, along with Britain, the US, Switzerland, etc

Fixed it

Thu, 10/18/2012 - 13:09 | 2901566 Urban Redneck
Urban Redneck's picture

HSBC loves violating Swiss law, and the inept & corrupt Federal government loves looking the other way, so they can place "nice" with their EU counterparts.

http://www.swissinfo.ch/eng/business/Bank_heads_immoral_behaviour_riles_...

 

If you are under attack and you don't fight back, you aren't being neutral, you are siding with the enemy.

 

Thu, 10/18/2012 - 12:33 | 2901364 janus
janus's picture

perfecto:

http://www.youtube.com/watch?v=T6xscuS9H8U

courtesy: The Fraternity of Man.

roll another one,

just like the other one,

janus

Thu, 10/18/2012 - 12:21 | 2901313 onlooker
onlooker's picture

Which asks the question, where is all the American drug money? North America and South America?

 

Thu, 10/18/2012 - 14:27 | 2901991 delacroix
delacroix's picture

carlyle group ?          

Thu, 10/18/2012 - 12:16 | 2901299 eddiebe
eddiebe's picture

What's good for the goose is good for the gander.

Thu, 10/18/2012 - 12:16 | 2901297 mademesmile
mademesmile's picture

Because forbidding something by law, especially for 20 years, ALWAYS works!

 

 

Thu, 10/18/2012 - 12:10 | 2901276 AnAnonymous
AnAnonymous's picture

'American' laundry job. With an 'american' representative included in the set.

Dont worry though. This is not a case of corrupted people. 'Americans' are beyond corruption. They are simply people looking for escaping a punishing tax rate.

Welcome to an 'american' world, started on 1776, July, 4th, going on for who knows how long...

Thu, 10/18/2012 - 15:10 | 2902149 BigJim
BigJim's picture

Zzzzzzzzz.....

Thu, 10/18/2012 - 12:05 | 2901263 L927
L927's picture

In all this I do not get from the article where the money that was recieved for the drugs is. I guess it never had to travel to Morocco? So then, what's the fuss about 8%-tax fraud commission, the big fish is still there??!!

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