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First Monte Paschi Banker Arrested With $54mm Stash

Tyler Durden's picture


Unfortunately for the apparently not quite big enough to not fail Italian bank's former leaders, the Monte Paschi derivative debacle just won't go away. As Reuters reports today, the first (or many) arrests have been made. Gianluca Baldassarri and four other people suspected of criminal conspiracy to commit fraud were arrested after police seized EUR40mm of apparently ill-gotten gains. The alleged fraud and bribery case charges Baldassarri (who left shortly after the arrival of the new CEO in Jan 2012) of misleading regulators over the true nature of a secret derivative contract that was found in a safe by the bank's new management in October 2012. Echoing JPM's London Whale, they uncovered a 'systematic overshooting of risk limits' in the management of the group's EUR24bn prop book. Baldassarri was arrested quickly after the police found evidence that he was trying to cash in securities worth over EUR1mm soon after the funds were seized.


Via Reuters,

Italian police arrested on Thursday the former head of Monte dei Paschi's finance department, who is at the center of a probe into alleged fraud and bribery at Italy's third largest bank, prosecutors said.


Gianluca Baldassarri is the first person to be arrested in a widening scandal that has rocked the world's oldest bank and triggered a financial and political storm ahead of Feb 24-25 national elections.


Prosecutors in the Tuscan city of Siena, where the 540-year-old bank is based, said Baldassarri was accused of helping mislead regulators over the true nature of a secret derivative contract that was found in a safe by the bank's new management in October 2012.




Baldassari left Monte dei Paschi shortly after the arrival of new chief executive Fabrizio Viola in January 2012.





Italian prosecutors seized some 40 million euros ($54 million) last week as part of their investigation. The prosecution seizure order, seen by Reuters, said the funds belonged to Baldassarri and four other people suspected of criminal conspiracy to commit fraud.




Internal documents obtained by Reuters show an audit of the department in August and September 2009 had uncovered a "systematic overshooting of risk limits" in the management of the group's 24-billion euro proprietary portfolio.


Last week, the lender put losses stemming from three derivatives trades at 730 million euros and said it may have to restate previous accounts.


One of the structured finance transactions under scrutiny is a complex 2009 trade between Monte dei Paschi and Japanese bank Nomura, known as "Alexandria".

The bank's new management says Monte dei Paschi's board never reviewed the trade for approval, and its true nature only came to light in October last year after a secret contract was found in a safe.






In their statement on Thursday, the Siena prosecutors said they had feared Baldassarri may be seeking to leave the country because they had evidence he was trying to cash in securities worth more than 1 million euros after the February 7 fund seizure.




The Bank of Italy has faced increasing questions over its supervision, and Mario Draghi, who was governor of the Italian central bank before becoming president of the European Central Bank in November 2011, has also been drawn into the criticism.


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Thu, 02/14/2013 - 10:27 | 3242862 Pladizow
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Thu, 02/14/2013 - 10:29 | 3242876 francis_sawyer
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Meanwhile... [1 hour ago]


"Riverside, California (CNN) -- Authorities said Wednesday they are reasonably sure that the body found inside the burned cabin near Big Bear Lake, California, is that of Christopher Dorner, the rogue ex-cop who had been pursuing a vendetta against his fellow officers.

"We believe that this investigation is over, at this point, and we'll just need to move on from here," San Bernardino Sheriff John McMahon told reporters.


I'm guessing the body will be eased into the Indian Ocean for burial

Thu, 02/14/2013 - 10:32 | 3242890 Sudden Debt
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Thu, 02/14/2013 - 10:34 | 3242895 Badabing
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First Monte Paschi Banker Arrested With $54mm Stash.

thats good for a $1mm fine

Thu, 02/14/2013 - 10:39 | 3242909 BurningFuld
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His $54m would be kickbacks for signing those swaps. No doubt no doubt.  He almost escaped with the cash before they blew up too! Damn I hate it when that happens. Although he does have plenty of money to pay off the Police and prosecutor.

Thu, 02/14/2013 - 11:12 | 3243015 Fuh Querada
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pocket change

Thu, 02/14/2013 - 10:30 | 3242877 francis_sawyer
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Meanwhile... [1 hour ago]


"Riverside, California (CNN) -- Authorities said Wednesday they are reasonably sure that the body found inside the burned cabin near Big Bear Lake, California, is that of Christopher Dorner, the rogue ex-cop who had been pursuing a vendetta against his fellow officers.

"We believe that this investigation is over, at this point, and we'll just need to move on from here," San Bernardino Sheriff John McMahon told reporters.


I'm guessing the body will be eased into the Indian Ocean for burial

Thu, 02/14/2013 - 10:31 | 3242886 Sudden Debt
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you said that already...

Thu, 02/14/2013 - 10:36 | 3242901 LawsofPhysics
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There will be numerous mandchurian candidates coming up.  Must convince the sheep that the need the government's "protection", give that TSA officier you guns, etc.


I remain long black markets, physical assets of real value and a dependable tribe...

Thu, 02/14/2013 - 10:46 | 3242929 Dr. Richard Head
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i don't know about you, but I really don't feel the need to rent my home through property taxes to pay a gang that can now lawfully burn down my home if I am deamed a "bad guy". 

Due process, it's what's for history!

Thu, 02/14/2013 - 10:31 | 3242878 francis_sawyer
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Thu, 02/14/2013 - 10:32 | 3242889 Sudden Debt
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really... you did...

Thu, 02/14/2013 - 10:55 | 3242898 francis_sawyer
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Fuck you... Blow me... The computer locked up when I hit send... I'll lay odds that it's the fucking pussy ass bitcoin miners searching for their little prizes in the cracker jack boxes...


Reason 1002 why 'bitcoin' is a dead end... Because if the end game is everyone on the planet having mining hardware on their computer performing 'processes' on each others computers all at the same time, the goddamned internet is going to come to a screeching halt...

Thu, 02/14/2013 - 11:18 | 3243026 NuYawkFrankie
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Re f*cking pu$$y a$$ bitcoin miners searching for their little prizes in the cracker jack boxes...


Hahaha!!! Best description Ive heard yet!

Thu, 02/14/2013 - 15:52 | 3243956 TraderTimm
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Love how you post your usual grey-haired confusion in a thread about someone caught smuggling funds across the border. Just showing your absolute ignorance of anything that has binary logic.

francis_sawyer, maybe keep that old AOL dialup account and your MajicJack for long-distance calls. Leave the internet to people who understand it. Oh, and computers too.

Next you'll be blaming bitcoin for your prostate enlargement.

Thu, 02/14/2013 - 10:31 | 3242879 francis_sawyer
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Thu, 02/14/2013 - 10:28 | 3242869 redpill
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Only a banker would be stupid enough to think a safe is safe.

Thu, 02/14/2013 - 10:30 | 3242881 Sudden Debt
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it sure is... just look at fort knox... somebody loses the key and nobody can't get their gold out anymore....


Thu, 02/14/2013 - 10:54 | 3242943 LongSoupLine
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Don't waste any fucking time. Execute him now...painfully. fucking pricks, after that just fucking execute any fucking banker retroactive whom were involved in any fucking middle class financial raping activities. Stack their dead cold fucking bodies on top of asshole Bernanke and make him eat his fucking way out. Fuckers.

Thu, 02/14/2013 - 11:14 | 3243017 Fuh Querada
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Elegantly put.

Thu, 02/14/2013 - 11:44 | 3243115 Hubbs
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I am so tired of all this politically correct lip service about "innocent until proven guilty in a court of law" and the  "right to a fair trial."


This presupposes that there is a fair and impartial justice system. There is clearly not. So why bother with trials? Seems like these people should be fair game to be shot on sight for crimes against humanity. After all, Obama has already set the precedent with OBL and others on the drone turkey shoot list.

Thu, 02/14/2013 - 10:25 | 3242853 docmac324
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Can we arrest some here already?


Thu, 02/14/2013 - 10:26 | 3242861 GetZeeGold
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I know where one is.....but he's got DOJ protection.

Thu, 02/14/2013 - 10:36 | 3242900 Buckaroo Banzai
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The DOJ is the rat.

Thu, 02/14/2013 - 10:27 | 3242867 Sudden Debt
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Sorry... jail is already filled with people who got a parking ticket...


Thu, 02/14/2013 - 10:26 | 3242857 Cognitive Dissonance
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Thu, 02/14/2013 - 10:37 | 3242903 Buckaroo Banzai
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You know you are reaching the end of the game when the banksters are starting to turn on each other. 

Thu, 02/14/2013 - 10:41 | 3242910 NoDebt
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Yep.  This is indication that the effort to sacrifice pawns to save the king is well underway.  How many more pawns will it take to satisfy you to stop going after the kings?  Perhaps a rook, a knight, maybe even a bishop, but no higher than that.

You can also expect to hear the kings employing the newly-in-voge "it's too big to manage every little part of it so you can't hold me personally responsible" defense very shortly.  Jamie Dimon played it like a master, you can expect the same here. 

Thu, 02/14/2013 - 18:09 | 3244517 Swarmee
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Bishop? How about a Pope?!

Back on topic: these Italian bankers are being charged with criminal conspiracy to commit fraud..... Sounds like that's a crime that would stick to plenty of a-hole US bankers involved in tanking the economy and bringing about the financial crisis. Many times the excuse for no charges h been that what was done was unethical but not criminal, well, if they involved even one other person that's conspiracy so lets get crackin DOJ!

Or y'know, ANY arrest of ANYONE AT ALL involved in destroying massive amounts of wealth and affecting literally every US citizen.

Oh and as long as I'm wishing for ponies, how about one count of fraud per citizen for LIBOR fixing participants? Consecutive sentence should be pleasant to add up for that.

Thu, 02/14/2013 - 15:33 | 3243886 Bunga Bunga
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What do you thought? Of course at least somebody has to be arrested, since Goldmans can't be arrested.

Thu, 02/14/2013 - 10:28 | 3242860 madcows
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They must have forgotten to buy off the regulators (government) and and enforcers(SEC equivalent).  That's what our criminal wall streeters did, and look at them.  They've got a license to swindle at will... just so long as the politicians get a cut (see John Kerry and Heinz, Pelosi and her hubby's amazing "investments", etc..).

Thu, 02/14/2013 - 10:33 | 3242893 Water Is Wet
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Italy's prosecutors are no joke, apparently.  Italy's former intelligence chief was just sentenced to 10 years in prison for his role in a CIA kidnapping in the War on Terra.

Imagine if Leon Panetta or Don Rumsfeld or Colin Powell or David Petraeus were sent to prison... HA!  Italy actually has a justice system, apparently.

Thu, 02/14/2013 - 10:27 | 3242865 Gert_B_Frobe
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I'm sure those seized funds will work there way back into the system ... via various purchases by the Italian prosecutors for their female "cousins"

Thu, 02/14/2013 - 10:29 | 3242874 HelluvaEngineer
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In the US, they would go towards shiny new tanks/APCs for the local PD.

Thu, 02/14/2013 - 10:43 | 3242917 NoDebt
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What makes you think they haven't?

OK, maybe not tanks yet, but pretty much everything else, including drones!

Thu, 02/14/2013 - 10:29 | 3242875 Cdad
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I hear that financials will continue to lead equity market rallies because they are historically cheap.  Got that tip from The BlowHorn [CNBC], and I can hardly wait for the opening bell so that I can rush into JPM and DB.  

I also heard from J. Dimon that the 2008 financial crisis is over, and it is time for everybody to move on already.  Never have more prescient words been uttered.

This thing with Paschi is obviously some kind of one-off.  

The criminal syndicate known as Wall Street would never misrepresent the value of...its share.

Thu, 02/14/2013 - 10:31 | 3242884 Number 156
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The other flight risk is Mario Draghi.

Thu, 02/14/2013 - 11:02 | 3242975 Dapper Dan
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Never trust a man whose last name ends in a vowel.

Thu, 02/14/2013 - 11:29 | 3243062 Seasmoke
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Thu, 02/14/2013 - 12:15 | 3243253 thisandthat
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Thu, 02/14/2013 - 10:31 | 3242887 y3maxx
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...The Italian "SEC" is arresting TBTF Italian Bankers!

and TBTF Popes are jumping ship too.

...It's time for a Jewish Pope to step in and clean up the Vatican...

Thu, 02/14/2013 - 10:31 | 3242888 A Man without Q...
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"IMF urges speed on banking union with a credible common backstop."

i.e. in order to prevent the contagion risk from widespread fraud in EU banks, it is important that taxpayers take the hit...

Thu, 02/14/2013 - 10:33 | 3242894 falak pema
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just imagine the number of safes that are deposited in the back offices of bankers all over the world. If there are 4000 bankers and each has 50M $ that adds up to :

200 billion in small change. Now that is just peanuts; the big stuff is already in tax havens; hundred to two hundred times more, in cash or FIRE assets. 

Thu, 02/14/2013 - 11:15 | 3243022 Fuh Querada
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Tax-exempt trusts in Belize and the Cayman Islands.

Thu, 02/14/2013 - 10:38 | 3242905 ebworthen
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An actual arrest by the Police of an actual banker, when will that happen in the U.S.S.A.?

Thu, 02/14/2013 - 10:43 | 3242920 Terminus C
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When American Citizen citizenism blobs up to the task of citizenizing the government.

Thu, 02/14/2013 - 10:41 | 3242914 NEOSERF
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That's some juicy ripe a tomatoes.  Fuck Italy, call me back when I can buy a tuscan apartment with water views for $30K...

Thu, 02/14/2013 - 10:43 | 3242916 shovelhead
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New Euro realiity series...


Thu, 02/14/2013 - 10:43 | 3242919 Scalaris
Scalaris's picture

Has anyone figured the connection of Monte dei Paschi, Dresdner Bank AG, Lutifin Lugano, Skylark Limited Cayman and Alexandria Capital PLC?

Thu, 02/14/2013 - 10:50 | 3242936 youngman
youngman's picture

They all have an A in the name

Thu, 02/14/2013 - 11:32 | 3243076 MisterMousePotato
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Don't forget the helicoptor company.

Thu, 02/14/2013 - 10:55 | 3242949 ziggy59
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All of them were recently mentioned on ZH

Thu, 02/14/2013 - 11:16 | 3243024 Fuh Querada
Fuh Querada's picture

You left out Benedict.

Thu, 02/14/2013 - 11:56 | 3243166 Canucklehead
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These firms all have an indirect relationship with Kevin Bacon.

Thu, 02/14/2013 - 10:50 | 3242935 youngman
youngman's picture

There are going to be a lot of very rich border crossing agents in the near future.....lots of tips will be marketable securities are all good and accepted

Thu, 02/14/2013 - 10:54 | 3242946 ziggy59
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One banana, two banana... Soon Bacha-guloop will be snagged

Thu, 02/14/2013 - 11:03 | 3242983 spanish inquisition
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Berlusconi looking like the cleanest dirty shirt? (wait, should be dirty)

Thu, 02/14/2013 - 11:38 | 3243099 Hubbs
Hubbs's picture

Sounds to me that this banker didn't steal ANYTHING fom his fellow citizens, but rather a bunch of 0s and 1s from our generous, forgiving FED via QE transfers.

Since none of our domestic US  bankers are being prosecuted for equal or worse crimes, and since it is our money, then I claim this is capricious and arbitrary prosecution. <sarc>

Thu, 02/14/2013 - 12:19 | 3243267 ShankyS
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This story was very quickly removed from Reuters front page after being posted this AM - wonder why? 

Thu, 02/14/2013 - 12:56 | 3243378 Obama4Ever
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I'm still not getting this "mm" stuff. So his stash was 54 milimeters. Or 5.4 centimeters? Or about 2 and 1/8th inches. Not much of a stash.

Thu, 02/14/2013 - 15:57 | 3243972 Obama4Ever
Obama4Ever's picture

Even if you try to interpret "mm" as million million, that's the same as a thousand billion, or a trillion. So this guy had a stash of 54 trillion dollars.


Thu, 02/14/2013 - 14:10 | 3243635 Joebloinvestor
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A banker arrested.

How come this isn't leading the financial news?

I think a pig just flew by my window.

Thu, 02/14/2013 - 14:48 | 3243745 larz
larz's picture

These idiots are pikers Madoff ponzi-ed off with billions 

Thu, 02/14/2013 - 15:57 | 3243971 trendybull459
trendybull459's picture

Wow,what if catch each banker and provide each citizen with just 1/4mln $ from his holding(I mean revolution as solution,before we take all Elite off,may be its good the Elities cash out volantirely,this will solve problem with appartments,I believe its what they took on very average from the people in each country and because they have even more money i ask to devide being people,I would ask where the money prosecutors take from those bankers going?

have and must to see: "I love to travel,I love to be sponsored,I love things for free just because I'm a chick..."The other forms of prostitutes the Matrix try to keep going while prostitutes loosing jobs because rich corporative clients and bankers gettin hair cuts.Babies,you soon belong to the working class and taking water to home from the 10km long by step :)))))))))) Matrix should be reloaded:

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