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How to Launder Money - Swiss Style
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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I believe the drug money was paid to the owners "names" of the black accounts could close them out (at 92 cents on the dollar), presumably anonymously so.
But I would imagine the Swiss, and those twisting their arms, could trace the money from M's brother's accounts back to the closed accounts to find out those names pretty readily if they so desired.
"Everyone was happy with this arraignment." Awesome.
Fucking spellcheck again. I swear I do not "see" these things.
I fixed it. Tks.
You should have left it. That was great.
what is interesting is how US authorities have aided and abetted this secrecy you so cogently presented here...over that same time frame i might add. at least "until now." i think we can all say now one of the truly dramatic consequences of the 2008 collapse is the collapse of Swiss banking secrecy that was one of the hallmarks of the Cold War. here's one of this particular brand of "Cold Warrior": http://en.wikipedia.org/wiki/Marc_Rich pardoned of course. the fact of the matter is US politics is undergoing a fundamental shift as dramatic as any in the past sixty years. 10 years of the War on Terror has had an impact...granted the best anyone can do to talk of it is be here. This IS serious however...and the implications which are uniquely political...but certainly emanating out from that to include much more...are still not yet realized. the "focus factor" however has increased for me...and hopefully for all of you who have been paying attention to what i ACTUALLY say (reading through the humor...which is a device btw.) the consequences to date have been self evident to me...presenting it as such has been a terrible challenge of course. i know i've paid a price personally for doing..."this." but clearly "the machine" (known as "the internet") has been turned on...and the implications for this fateful event had BETTER BE discussed! Needless to say "it won't be by the people running for office" amazingly enough...even though they are one of the ones most impacted. the power of the media is clearly on the wane, folks. the "technologists" who built in the safety protocols to this "device" have now realized "they weren't even close to making this thing internet thing secure." but they are getting to the point where true internet security is possible. and of course all without Government help which simply looks at issues like the internet and defaults to "surveillance state enhanced...therefore good" line of reasoning. which of course is anything but true. if copyrights cannot be enforced Government from whence comes your economic recovery? how about the idea for a Patent at all? "thought police" might sound like a bad idea in the "police state sense" of the term...but what if they were protecting the ideas in you head that are being "thought theifed"? suddenly the need for that type of law enforcement seems well needed, no? "what goes on in your head...STAYS THERE" so to speak. neeedless to say "none of this warrants serious discussion since it's all a bunch of clap trap and globaloney!" which of course it isn't. this is very REAL. with the US banking system totally collapsed perhaps a need to "relook at all those goofy privacy laws" is in order Wall Street. No? Really? I didn't think so. Suit yourself then!
DV
sorry but what I read is all parenthetical preamble with no punch line. What are you trying to say?
I get the Mark Rich bit but ...internet security...?
DV, there is punctuation for a reason. It seems you have much to say but your text is unreadable.
Sorry.
Yes, punctuation is the difference between helping your Uncle Jack off a horse and helping your Uncle jack-off a horse!
Either would make a fine addition to youtu.be.
This certainly seems bullish for gold to me.
The Swiss will regret repealing their bank secrecy laws.
>This certainly seems bullish for gold to me.
More so for Bitcoin I would think.
Si...
What happens if drug dealers start accepting only gold and silver as payment? That will force the "laundering" down to the retail level and except for maybe PM dealers there won't be any more piles of cash laying around.
Ouch.
Never gonna happen
Never gonna happen
Anyone with a significant metals holding will be branded a drug lord in that scenario. Will greatly aid in justifying confiscation.
What gold? I don't have any gold. Nothing in my pockets, nothing in my bank account.
You got the wrong guy.
Don't worry, I won't drop a dime on you...especially after that "Mark of the Beast" technology is implemented!
Peanuts compared to the drug money laundering into US banks
Sponsored by the US regime itself for decades, alongside the phoney US 'war on drugs' that helps keep illegal drug prices high, and the drug money funnelled into CIA-approved channels
Drug money laundering a major pillar of the US dollar, along with the crooked 'petro-dollar' price-oil-in-dollars scheme with the barbaric Saudi Arabians
Jim Willie has said yet again the other day, that when Saudi Arabia falls - quite soon - and the petro-dollar falls with it, that is when the US dollar finally blows up, drug money in US banks notwithstanding
I'll do one better:
http://personal.crocodoc.com/ur2IHXz
The claim is that The United States Government chose sides in the "War on Drugs", in this case, it appears The Sinaola Cartel, opposite number of The Zetas. It's almost right out of a Tom Clancy novel, only this is real.
Bankers and Cartels, in bed with the government, but I guess it's for our "safety & security" right? Yet the citizenry is banned to go hunting (open season) on Cartels, Bankers and Gang-Bangers in out own country, yes, that makes sense.
It was GHWBush's operation from the get-go to have Mohammad binLaden build his off-shore wells so the CIA could run whatever they wanted to anywhere they wanted and not be held accountable on land.
Disgusting but brilliant.
Now, the CIA has the US Marine Corps guarding the poppy fields of Afghanistan, along with the rest of Pipelineistan and all is right with the world. What could possibly go wrong with that plan? The greed just doesn't stop but it is purveyed under the guise of bringing down the Chinese with smack. Opium Wars Redux.
It never ends.
:/
Quite so; plenty of extra processing capacity for the poppy crop in AFghanistan now. Iran being flooded with Heroin
What a coincidence...
What? Wells Fargo and B of A don't like the little guys biting their ankles?
yawn. a marijuana ring-oh my God. If you want to make big money off illegal drugs you run a corporate prison company in the US and get the paid-off judges to send you a steady supply of dumb kids busted by small-town shithead cops for "possesion".
I saw where the states are trying to sell some prisons to private buyers, and the buyers demanded the state guarantee "90% occupancy". So the state has a direct financial interest in imprisoning more people. Lovely.
check out CXW.
This scheme only works, because of the theft of wealth by the governments of the black account holders, and the fear that the Swiss will break their word, and reveal identities, that are protected under the Swiss constitution. When the governments are crooks, it turns everyone else into crooks.
My laugh for the day!
You guys fight, or drug deal or whatever we'll gladly hold your money.............
Thank you for supporting our very high standard of living in Europe.
maybe they can buy reel estate in Collyfornia with small bills;
pay bribes to the LA Assessor for tax abatements,
nope they got him too yesterday,
se la vi!
The money-laundering method the author outlines is reminiscent of Hawala. I suspect that the use of Hawala outside it's traditional regions around the Middle East will be on the rise, and of course TPTD in the West will be crying foul and accusing everyone who uses Hawala of supporting terrorism because "it's an Islamic thing."
'Money laundering' is a victimless, manufactured-from-thin-air offense which didn't even exist until recently.
When the authorities are changing the rules on them, is it any surprise that depositors protect themselves by any means they can find?
Fighting crime with crime, as it were!
Have a look at the art market... The paintings are deposited in free trade port facilities, payment in bank notes...wonderful...
Imagine that ........ "Banksters". Who would of thunk it. No one could have predicted this.
that's nothing new at all, the money is elsewhere.http://covert.ias3.com/expose/
Q. What's brown and full of holes?
A. Swiss shit.
Those wealthy with "black accounts" should have just stuffed the mattress or the gun safe.
The shit people have to do to keep wealth out of looters' hands is ridiculous.
Newsflash to governments:
If the tax rates are low enough, ALL the money comes out of the shadows as the cost of compliance vs penalties becomes trivial.
10% was good enough for a religious tithe. No government NEEDS more than that.
(<--- America invading Iran)
100 million causing a fuss?
When Corzine laundered a billion without a peep from anyone?
Hey man, like I was part of that operation, had a few others with me too, they were from Ireland and at war with England. Well France and the swiss contributed money expecting a big return. They got none and now complain. Thats ok though, I traded a trash can full of weed for a couple of kilo's of gold. Now they got scared and want their money back, sorry folks, its a done dealeo.
Interesting, but I think Bruce is overstating his case for the complete loss of swiss privacy over this matter. As the money cockroaches of the world, the swiss perform a function that is too useful for the crooked politicos that populate the EU and so eventually the swiss banksters will weasel their way out.
FYI, I have no money in Switzerland and couldn't give a shit what happens to what is left of their banking secrecy practices.
@Colombian Gringo: You are absolutely corrrect. Bruce Krasting knows fuck all about any of this. HSBC won't be "harmed" by this latest tale nor will anyone with a so-called "black account" in any Swiss bank from Basel through Zuerich to Fribourg, Lausanne, Geneve all the way to Lugano and Chiasso.
By the way, the marijuana smuggling business/money in question was operated by Tunisian Jews, three brothers (hope the link works):
http://www.rts.ch/info/regions/geneve/4343185-la-societe-soupconnee-de-b...
Bruce, with so many disgusting scandals taking in place on your own turf why don't you give Helvetia a rest - you enlighten no one at all with your calls for a Swiss take-down. You're becoming bloody annoying mate. Move to Florida where the big money is.
Trying again with the bloody link:
http://www.rts.ch/info/regions/geneve/4343185-la-societe-soupconnee-de-b...
and again:
http://www.rts.ch/info/regions/geneve/4343185-la-societe-soupconnee-de-b...
Everyone realizes a flat sales tax captures black market profits better than a wages/earnings "progressive" tax right?
Just checking ;-)