Why The US Is So Attractive To Money Laundering Banks

Tyler Durden's picture

Whether you are a Mexican or a Mexican't, it would appear that the heavily-regulated and oh-so-vaunted halls of the US banking systems would be a terribly difficult place to launder your hard-earned drug/terrorism/piracy spoils. But as Stratfor's Ben West points out in this fascinating and brief clip, it is the 'safety' of the US system that makes it so attractive; for once the 'Tony Montanas' have found their banker 'mark' (whether it's HSBC or StanChart) - and paid their 'little friend' the standard vig - the money flowing out the other end of the US banking systems' laundry is as clean-looking as Carmelita Jeter the day of a drug test. The sad but true reality is - as usual - given the means, there is always a way; and the US has favored nation status among the world's pillagers.


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falak pema's picture

Rome is where the corruption is deepest; all the whilst the roman Senators sing :  we fight for civilization and we hate cheaters! 

Oldest song in the world, of might is right and anyways, my country right or wrong, 'cos "we're always right" fight club! 

Man's nature never changes. If you want your freedom fight for it! 

NotApplicable's picture

Well, the money to fill the campaign coffers has to come from somewhere!

Precious's picture

Emil Puhl the head of Germany's Reichsbank during WWII claimed he didn't know what the Nazis were doing.

He was just an innocent banker, moving around the gold the Nazis stole to pay for their war machine.

He served less than 5 years in prison but deserved to be summarily executed.

Ignatius's picture

And it has always been thus.

In the US a regular schmo moves $10,000 and it's reportable.  The banks move millions and, if you didn't know, there's an exemption to reporting requirements if you're a big dog.  Short version, they hate competition.  Cuts into profits, illegal and otherwise.

Nobody For President's picture

Word to the wise - get friendly with your local bank person - not the guy behind the desk - the gal behind the counter. I live in a small town environment - which makes it easier, and I have a real friend behind the counter (she hates it, need the $ - sound familiar?) who told me what the REAL limit is before the bank has to file a (forgot form name/number) with Homeland security/Gestopo. It is LESS than $10K. Find out what the REAL limit is at your bank, be advised as you withdraw cash to your local safe...

PS - It is presently $9K at my bank - $8,999 is good, but a bad idea, $8.500 is probably OK - for now. If you are a minnow, swimming with the sharks, you:

1. Have to recognize this and accept it, and

2. Act accordingly..

Nobody For President's picture

Bring back the  Nuremberg Trials - only this time, for US major economic crimes. (Congresspeople not exempt.)

magpie's picture

In reality, we'll probably settle for the side or person who is one or two degrees less corrupt than incumbents.

Ghordius's picture

You want Prohibition? You get Mafia Barons.

And they need banking, too, so they will get it. That simple.

CPL's picture

I wonder who in all those banking organizations are going to inform those Drug lords, Legacy Families and Dark Organizations that all their "clean" money has vanished.

And they thought they were the kings of thieves...indeed.



boogerbently's picture

....Why US banks ?

No regulation......DUH!

A Lunatic's picture

Only a world central bank can prevent this from happening in the future...............



Hugh_Jorgan's picture

Looks like a couple goons here on ZH failed to catch you there. Next time use a </sarc> tag at the end of your post. I guess some people need to get clubbed over the head with it these days...

3.7.77's picture

True, if it wasn't for the trolls whom make it hard to differentiate.

LMAOLORI's picture



It all comes down to this in the end...


Banks Are Being Punished, Again and Again, to No Avail


"The problem is not too few prosecutions, but that no one at the top of these organizations typically takes a fall for the crimes. There's also no penalty for repeatedly breaking promises to the DOJ and SEC to never break the laws again."

in full



When they are lol punished they pay a fine which they pass onto their customers so Crime Pays


Financial Fraud Conviction Scorecard:

Bush: 1300+, Clinton: 1000+, Obama: 0.0 (+/-)



Getting Old Sucks's picture

In other words, if you deposit 10k, you're a small fish and they report it.  If you deposit 1b, you get a free toaster.

Buckaroo Banzai's picture

And a GFE hooker for whenever you're in town, in the 9-10 range.

Cognitive Dissonance's picture

"....there is always a way; and the US has favored nation status among the world's pillagers."

Kind of like an attractive nuisance.

Of course it has nothing to do with the fact that we are corrupt third world banana republic with nuclear weapons.......right?

Dr. Engali's picture

Damn I just now completed an anti-money laundering course that took a couple hours of my time. It was prett much summed up in this 4 1/2 minute video. To bad compliance can't be this effecient.

CommunityStandard's picture

Next time just click through the course.  The questions at the end are the same every year.

Cognitive Dissonance's picture

I'm a good widget. I go from soup to nuts and read the entire course..........mostly because our testing outfit let's you know when you're clicking too fast.

They really don't believe that I am a speed reading HFT organic computer co-located in a flesh and bones avatar sharing the same ego and wallet. So they won't let me click through.

Damn! Gotta find me a new AML testing outfit new year.

Dr. Engali's picture

They caught on to that and changed the format. That's no longer an option.

Mercury's picture


So true.

 I worked for a small sub of a US mega-bank and watched it go to zero in 2008 (it was in "full compliance" the entire time of course).  The post-mortem revealed (besides sloppy handling of personal client and employee info, mountains of toxic debt and shocking idiocy of every stripe) a pervasive history of laundering S. American drug money.  The continuing ed/Patriot Act classes they made us take twice a year even had questions beginning with crap like: “Jorge Fernandez walks into your office with a bag of cash…”

 God forbid you tried to hedge your force-fed company stock position in your PA though…



krispkritter's picture

Because you have criminals dealing with criminals?

What's the difference between a Drug Lord and a Banker? Nothing...

alien-IQ's picture

the drug dealer provides a product people want. the bankers...not so much.

krispkritter's picture

And a bank(er) doesn't provide credit that people want?

If you look at it from a service perspective then they are still the same in my view. A Drug Cartel provides the conduit by which the product flows to the dealers and requires capital to do so. The Bank(er) provides the conduit by which the money flows to/from the Drug Cartels which is the capital they require. Both provide an illegal service which requires the cooperation of the other to exist on the scale it does today.

toomanyfakeconservatives's picture

Drug dealers risk their necks in the steets, banksters lie under oath to Congress.

Walt D.'s picture

.... or a bought off politician?

Carl Spackler's picture

What's the difference between a Drug Lord and a Banker? Nothing...

The drug lord takes your life, and the banker takes your property.

In the end, they are both out-of-control pillagers, however.

alien-IQ's picture

George Carlin covered this topic in his usual brilliant manner.

George Carlin: Execute the Bankers

HD's picture

USA USA USA!  It feels so good to be number one at something other than debt and obesity...

magpie's picture

I think Draghi can convince the barons and cartels to invest in Spanish bonds.

Random_Robert's picture

Pillaging... ?


That should be the job of governments, not bankers.


Oh, wait.... Duh- What was I thinking?


Yes, it all makes sense now.

Abraxas's picture

Talking about money, everybody seems to be focused on US$ / Yen peg, but nobody (as far as I could say) mentions strange “coincidence” that for the last three years US$ / CAN$ / AUS $ was roughly maintained at 1 : 1 : 1 ratio with EURO getting closer and closer. Somehow I don’t believe that this is indeed a coincidence and that the so called free-market sets those ratios. What the purpose of this peg would then be?

doc_in_the_house's picture

spx @ 1399, eur @ 1.227

but, but just minutes ago @ 1407 and 1.233 = STUPID PERFORMANCE CHASERS !!

me = JUST RIDING my spx 1401 avg price shorts and eur SHORTS avg price 1.24

how's that "eur to 1.30" call working out?? you piece of SAC OF FECAL GARBAGE GS !! = me short !!!!! and RIDE !!!!

10 yr treasury toilet paper selling off, its up 7 basis points..and casino spx is NOT being pumped !! i guess the lemmings woke up !!



ok back to watching something more productive than those STUPID PERFORMANCE CHASING CHEERLEADERS, with their "insightful insight" = STUPID REPORTERS from bloomberg and cnbc...back to watching looney tunes and curious george and others.

samsara's picture

Read some Cathrine Austin Fitts works.  How Narco dollars work.

Narco-Dollars for Dummies
"How the Money Works" in the Illicit Drug Trade



Want a Picture of it to make into a poster?  Hit the below link and see a picture of the then head of the NYSE embracing a Drug Lord.

NYSE Chairman Richard Grasso Embracing A FARC Commander

The Real Deal: The Ultimate New Business Cold Call

In late June 1999, numerous news services, including Associated Press, reported that Richard Grasso, Chairman of the New York Stock Exchange flew to Colombia to meet with a spokesperson for Raul Reyes of the Revolutionary Armed Forces of Columbia (FARC), the supposed "narco terrorists" with whom we are now at war.

The purpose of the trip was "to bring a message of cooperation from U.S. financial services" and to discuss foreign investment and the future role of U.S. businesses in Colombia.



CPL's picture

Shit, forgot about that.

Well, I think the Narco's, Tongs, Triads, Gullybois, Thugee, Bikers, Bloods, Crips, Disciples, NewAge and Mafia are all going to be seeking their pound of flesh from anyone that covers up their lost capital.


This isn't going to end well for anybody.  Drug lords are men of pure will to out do the next guys.  All I'm seeing here is a single reason for the bunch of them to stand under the same banner and commit resources.  This will not go well at all, could end up with a single leader for all the groups.  A UN of crime...<shutter>  Hopefully that isn't an unintended consequence of the current administrations across the globe singular action of print and lose money...not necessarily in that order.

bigwavedave's picture

Jeter is unfair. FloJo? Come on!

Shizzmoney's picture

it is the 'safety' of the US system that makes it so attractive; for once the 'Tony Montanas' have found their banker 'mark' (whether it's HSBC or StanChart) - and paid their 'little friend' the standard vig - the money flowing out the other end of the US banking systems' laundry is as clean-looking as Carmelita Jeter the day of a drug test.

This is basically how the online poker boom was able to persist for so long circa 1998-2011, and how even 3rd party processors were able to make vig off the bank vig from player deposits/cashouts.

HedgeHammer's picture

If you've got the money we've got the time.

So just sign right here on the -------- line.

If you've got the money you won't do any time.

We'll make sure to turn Jim out on a dime.

So don't worry my friends we will all be fine.


now I leave you a quote from one of my most favorite POTUS

The modern theory of the perpetuation of debt has drenched the earth with blood, and crushed its inhabitants under burdens ever accumulating. -Thomas Jefferson


and here I thought I was being witty

NeedtoSecede's picture

Slightly off topic, but has anyone else at ZH seen anything on the story that is just breaking today about Fast and Furious?  One of the guys we have in custody is claiming that not only was the DOJ allowing guns to "walk" into Mexico, but that is was actually done in collusion with the cartels as a way to "manage the drug trade" by pitting one cartel against the others.  And this guy is alleging that in return for the guns the DOJ would let drugs enter the country.  And should we be surprised that most of the drugs that were "allowed" in landed in Chicago?WTF????

Talk about corruption!  I am a cynical SOB when it comes to our government but this one even has me speechless.  I thought is was bad when I thought is was just a scheme to pass more gun laws, but this takes the corruption to a new level.

Hang 'em all!


Canaduh's picture

I think that was the plot for last seasons Sons of Anarchy

JR's picture

As teddie888 wrote today: Why Chicago?  It’s because Axelrod & Rahm Emanuel can control it the way they want it to go? Korruption !

Or RIGHTHOOK today: “Obama inserted Rahm Emanuel in as mayor of Chicago for a reason; to launder programs like this and to create excessive votes out of thin air at election time. Crooked, mischievous, anarchist, Marxist.”

And  blogger John Sweet seven days ago regarding the five AFT officials who share the blame for Fast and Furious: “I am sure that the focus will remain on the five selected for cannon fodder but the reality is that Rahm Emanuel reports that he knew about the operations while he was at the White House.”

Here what GREG GUTFELD, CO-HOST, had to say about Chicago and Rahm in the video Gutfeld: Rahm Emanuel chickens out:

So, lately, we have been playing a game called chase the chicken. Bad things are happening we're obsessing over a fast food joint that serves bird. Why? Well, it should be scary stuff like the economy, war and, well, murder. Chicago Mayor Rahm Emanuel who said Chick-fil-A didn't represent Chicago values. What a relief! For the chain, that is, given what pose values are. According to NBC Chicago, Chi Town is unbeatable when it comes to violence.

Based on projected murder total this year, Chicago has roughly 20 murders for 100,000 people. That's double Moscow, three times New York City and twice Mexico City. When you have to go to Mexico to get away from the crime, you've got problems.

Anyway, for Rahm, it's not about gay marriage. It's about the city whose prime export is corpses and keeping it off the radar. Rahm knows the media prefers gay or decay. Better to report that over the drip, drip, drip of daily bloodshed.

So, focus on fillets, but the citizens know Rahm is chickening out. As a voice of all things tolerant, he's proving to be tolerant of the one thing he shouldn't be tolerant of -- the death spiral of a city hurdling towards hell, with or without the waffle fries.

Read more: http://www.foxnews.com/on-air/the-five/transcript/gutfeld-rahm-emanuel-chickens-out#ixzz234cRgZ1f

JR's picture

Remember this from February regarding Stratfor, the source of this story (never mind that Stratfor is the primary U.S. propaganda arm for Israeli foreign policy)?

MASSiVE insider SeCReT dealing scheme with STRATFOR and G Sachs, maybe | ft.com/alphaville

Posted by Paul Murphy on Feb 27 2012

[Updated with Stratfor response]

Talk about the paranoid discussing the paranoid…

Anonymous, the anonymous hacking group, has pinged 5m emails it stole from Stratfor, the political intelligence consultancy, to Wikileaks.

It would be rude of us not to read them, although the FT is not amongst the 25 media partners involved in this “investigation”.

The first thing in the files on Wikileaks that catches our eye, among the purported emails and reported highlights:

The emails show that in 2009 then-Goldman Sachs Managing Director Shea Morenz and Stratfor CEO George Friedman hatched an idea to “utilise the intelligence” it was pulling in from its insider network to start up a captive strategic investment fund. CEO George Friedman explained in a confidential August 2011 document, marked DO NOT SHARE OR DISCUSS : “What StratCap will do is use our Stratfor’s intelligence and analysis to trade in a range of geopolitical instruments, particularly government bonds, currencies and the like”. The emails show that in 2011 Goldman Sach’s Morenz invested “substantially” more than $4million and joined Stratfor’s board of directors. Throughout 2011, a complex offshore share structure extending as far as South Africa was erected, designed to make StratCap appear to be legally independent. But, confidentially, Friedman told StratFor staff : “Do not think of StratCap as an outside organisation. It will be integral… It will be useful to you if, for the sake of convenience, you think of it as another aspect of Stratfor and Shea as another executive in Stratfor… we are already working on mock portfolios and trades”. StratCap is due to launch in 2012.

Er, bet it doesn’t launch in 2012.

The actual Stratcap emails are here. A taste: …


davood's picture

Maybe because your CIA was founded on drugs and continues to run on it from Vietnam to Afghanistan and beyond?

tony bonn's picture

the usa is a prime drug money laundering center for two reasons....the 2d one is that the big banks desperately need that business to stay afloat.....Drug money was a huge intravenous feed to wachovia at the time of its forced demise....

the main reason for the drug money business is the cia which is knee deep in the drug trade going back at least to the vietnam war which was operated in part to push drugs to raise money for the cia's murderous operations.....dead gis were stuffed with heroin and other drugs from the golden triangle and later sold to americans....

the mena drug scandal operated by the bush crime syndicate and the clintons is another famous drug episode.....this collaboration brought clinton the presidency.....

the cia is and was the foremost drug dealer in the world, using americans as stool pigeons to buy its poison.....

these are the reason why the usa banks are meca for drug money laundering - the cia and its drug trade....

Russian ISDA MA's picture

What if some Hedge Funds wanted to short the Chinese/HK property market?  Would the "placement" be thru Canadian listed Chinese corporations like Sino-Forest or Casino's based in Macau like Wynn/LVS/Melco/MGM?  Then the "intergration" takes the form of fake asset purchases and different equity investments?  Could they now build CDO's and sythetic CDO's?