2 Japanese carrying $134 bil worth of U.S. bonds detained in Italy

[Peter Lemkin]

[This would make a great Monty Python skit - Dead Parrot, Take 2 - the lies and outstanding questions in this piece are too obvious to comment upon. Have a good laugh!]

Mafia blamed for $134bn fake Treasury bills

By FT reporters

Published: June 18 2009 19:52 | Last updated: June 18 2009 19:52

One summer afternoon, two “Japanese” men in their 50s on a slow train from Italy to Switzerland said they had nothing to declare at the frontier point of Chiasso.

But in a false bottom of one of their suitcases, Italian customs officers and ministry of finance police discovered a staggering $134bn (€97bn, £82bn) in US Treasury bills.

Whether the men are really Japanese, as their passports declare, is unclear but Italian and US secret services working together soon concluded that the bills and accompanying bank documents were most probably counterfeit, the latest handiwork of the Italian Mafia.

Few details have been revealed beyond a June 4 statement by the Italian finance police announcing the seizure of 249 US Treasury bills, each of $500m, and 10 “Kennedy” bonds, used as intergovernment payments, of $1bn each. The men were apparently tailed by the Italian authorities.

The mystery deepened on Thursday as an Italian blog quoted Colonel Rodolfo Mecarelli of the Como provincial finance police as saying the two men had been released. The colonel and police headquarters in Rome both declined to respond to questions from the Financial Times.

“They are all fraudulent, it’s obvious. We don’t even have paper securities outstanding for that value,’’ said Mckayla Braden, senior adviser for public affairs at the Bureau of Public Debt at the US Treasury department. “This type of scam has been going on for years.’’

The Treasury has not issued physical Treasury bonds since the 1980s – they are handled electronically – though they still issue savings bonds in paper format.

In Washington a US Secret Service official said the agency, which is working with the Italian authorities, believed the bonds were fake.

Officials in Tokyo were nonplussed. Takeshi Akamatsu, a Japanese foreign ministry press secretary, said Italian authorities had confirmed that two men carrying Japanese passports had been questioned in the bond case but Tokyo had not been informed of their names or whereabouts.

“We don’t know where they are now,” Mr Akamatsu said.

Italian officials, while pointing out that hauls of counterfeit money and Treasury bills were not unusual, were stunned by the amount involved. Investigators are looking into the origin and destination of the fakes.

Italian prosecutors revealed last month that they had cracked a $1bn bond scam run by the Sicilian Mafia, with the alleged aid of corrupt officials in Venezuela’s central bank. Twenty people were arrested in four countries.

The fake bonds were to have been used as collateral to open credit lines with banks, Reuters news agency reported. The Venezuelan central bank denied the accusations.

By FT staff in Rome, Tokyo, New York and Washington

[There now, don't you feel more reassured about the financial world and trust in governments.....etc.]

[Magda Hassan]

This is from some one called Jhonab a poster on Karl Denniger's Market Ticker Forum. Most intriguing.
http://www.tickerforum.org/cgi-ticker/ak...225&page=3

"Under Italian law when law enforcement agencies seize fake bonds or counterfeit money they are under the obligation to arrest the bearers. And in order to avoid misappropriation, the agency seizing the material, in this case the financial police, must quickly proceed to its destruction (i.e. incineration).

However, in case of real securities, after the securities holders are identified, the financial police must release them immediately after issuing a statement of confiscation and imposing a fine valued in this case at € 38 billion (US$ 53.4 billion). In this case, why were the two men released right away without any fine imposed?" (Asianews.it, today)

So the Italian media (and the Swiss) cover the story from this angle: If the bonds are real, it would mean a giant money inflow into the ever empty Italian Treasury - it would amount to paying the entire rebuilding after a major earthquake going on right now four times.

But today there is this tiny 'development':
'Another discrepancy is the fact that, along with the securities, original and recent bank documents were seized as proof of their authenticity.'
http://www.asianews.it/index.php?l=en&ar....

I have not been able to find the original source for this information about the banking documentation being 'recent'. Asianews called the Financial Guards regional headquarters in Como to ask why the 'bonds' had not been burned, if they were fakes, and why the smugglers had been set free, because this could only happen if the bonds were real. But nobody has called back.

And then you have this twist:

'Swiss Free Ports are a legal "no man's land"

Swiss free ports zones, normally based around airports, operate outside of Swiss government control. Goods entering such zones are not registered or taxed, are not reflected in Swiss import statistics, and are sent to other locations without export duties. While free port zones are part of Swiss territory, they operate outside of Swiss customs control.

Swiss free ports enjoy a level of freedom that others don’t. For example, European Union free ports are subordinate to the customs authorities. As such, they have to keep a detailed inventory of all the goods passing through their hands. That is not the case in Switzerland, where goods can be warehoused for an indefinite period of time.

Most trading in Swiss free ports happens anonymously via 3rd parties. Buyers can examine (and bring experts to verify) goods being sold, but rarely are there any direct interactions between buyers and sellers. Since free ports are not transparent, they may hide illegal activities, such as forged paintings and counterfeit securities. These fake goods must be of high enough quality to fool experts.

The four big Swiss free ports are Zurich, Basel, Geneva, and Chiasso.

To summarize, what makes Swiss free ports attractive:

1) Goods are ready to be shipped anywhere in the world and don’t need to clear Swiss customs before leaving the country
2) Indefinite storage in location outside the jurisdiction of any sovereign nation.
3) Anonymity afforded
4) Avoid/defer taxes because of special legal status.'

[Magda Hassan]

In Washington a US Secret Service official said the agency, which is working with the Italian authorities, believed the bonds were fake.

Do they mean 'believe' the same way tobacco company executives 'believe' that smoking is not harmful to your health?

Italian prosecutors revealed last month that they had cracked a $1bn bond scam run by the Sicilian Mafia, with the alleged aid of corrupt officials in Venezuela’s central bank. Twenty people were arrested in four countries.

The fake bonds were to have been used as collateral to open credit lines with banks, Reuters news agency reported. The Venezuelan central bank denied the accusations.

By FT staff in Rome, Tokyo, New York and Washington

[There now, don't you feel more reassured about the financial world and trust in governments.....etc.]

Now, if only they can tie in North Korea, Bolivia and Iran. :bandit:

[Peter Lemkin]

Committee Report 46 of 50 - House Report 108-044 - PROVIDING FOR CONSIDERATION OF HOUSE CONCURRENT RESOLUTION 95, THE CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2004

B) The amounts by which the aggregate levels of Federal revenues should be reduced are as follows:

Fiscal year 2004: $44,000,000,000.

Fiscal year 2005: $67,600,000,000.

Fiscal year 2006: $91,100,000,000.

Fiscal year 2007: $105,100,000,000.

Fiscal year 2008: $112,100,000,000.

Fiscal year 2009: $119,500,000,000.

Fiscal year 2010: $134,500,000,000.

How many coincidences make a coincidence in intel-blackspace? This seems to be some 'magic' number lately. Very estute of the Mafia, eh?!

[Magda Hassan]

From the Asia News, Italy http://www.asianews.it/index.php?l=en&ar...me=&size=A My bolding.

Seizure of US government bonds from two Japanese men in Italy raises questions
Seized US bonds are worth US$ 134.5 billion. The whole affair touches a number of economic and political issues. For some the resignation of Japan’s Interior minister might be related to it.

Milan (AsiaNews) – There have been new developments with regards to the story of US$ 134.5 billion in US government bonds seized by Italy’s financial police at Ponte Chiasso on the Italian-Swiss border, which AsiaNews reported four days ago. News about it initially made it to the front page of many Italian papers, but not of the international press. Since yesterday though, some reports have published by English-language news agencies. And some commentators are starting to link the story to reports in US press dating back to 30 March. On that date the US Treasury Department announced that it had about US$ 134.5 billion left in its financial-rescue fund, the Troubled Asset Relief Program (TARP), whose purpose is to purchase assets and equity to buttress companies in trouble. The existence of such means that the Obama administration may not have to go to Congress for additional funds, something which is especially important since many lawmakers have vowed to oppose any requests for more money.
At the same time, Japan’s Kyodo news agency has reported that the resignation of Japan’s Interior Minister Kunio Hatoyama might also be related to the Ponte Chiasso affair. Officially the minister quit as a result of a row over who should head the state-owned Japan Post, but some sources have suggested that such a scenario is not very plausible since Mr Hatoyama was Prime Minister Taro Aso’s main ally in his rise to the prime minister’s office, and is especially unconvincing since the ruling coalition government has to face elections in just two weeks time. Indeed there are many reasons to connect the Ponte Chiasso incident to the minister’s resignation.
First of all, the men carrying the bonds had a Japanese passport. Secondly, they were not arrested. Under Italian law anyone in possession of counterfeit cash or bonds worth more than a few tens of thousands of euros must be arrested. By comparison the value of the seized counterfeit bonds is equal to 1 per cent of the US Gross Domestic Product (GDP). Thirdly, how the seizure took place is worthy of a Monty Python movie—two well-dressed Japanese men carrying a briefcase travelling in a local train usually used by Italian manual labourers who commute to Switzerland for work had as much chance to go unobserved as two European businessmen travelling in the Congo.
For AsiaNews the incident raises several questions. For example, why did Italy’s press, of every stripe, first give the matter great visibility, only to drop it as quickly? Also, if we are to assume that the bonds are real, why were they in Italy on their way to Switzerland? If these were the unused TARP funds why would they be in US Federal Reserve denomination? Would it not have been better to wait to see how they would be used before the bonds were issued? If they are authentic and owned by a foreign state, why were they not transported in a diplomatic bag, which cannot be inspected at customs? And what will the Italian government do insofar as the issue represents an offence under Italian law? Will it impose a fine of 38 billion euros, and run the risk of a row with an ally, or return the money without any penalty to the rightful owner and show the world that Italy is some kind of banana republic, a semi-colonial protectorate that violates its own laws and constitution?
Whatever the case may be, for Italy’s Prime Minister Silvio Berlusconi it is a heavy burden to bear, given the legal and criminal consequences he might face.
The only people who come out of it well are Italy’s tax cops, reason for them to show off their success on their website.

[David Guyatt]

This story is very reminiscent of the Edilberto Marcos-Marcos - Metro Grant Holdings affair (for a taster see: http://www.icac.org.hk/newsl/issue15eng/button1.htm) because the gold certificate in that case was seized but not destroyed as it should have been if it were fake -- and there was also a strong Japanese connection that led directly to the emperor's former cabinet chief who was also connected to the Japanese post office.

I absolutely love the $134.5 billion connections that are springing up. Can anyone seriously doubt that some deep politics are going on here?

[Peter Lemkin]

This story is very reminiscent of the Edilberto Marcos-Marcos - Metro Grant Holdings affair (for a taster see: http://www.icac.org.hk/newsl/issue15eng/button1.htm) because the gold certificate in that case was seized but not destroyed as it should have been if it were fake -- and there was also a strong Japanese connection that led directly to the emperor's former cabinet chief who was also connected to the Japanese post office.

I absolutely love the $134.5 billion connections that are springing up. Can anyone seriously doubt that some deep politics are going on here?

Well, just from a statistical point of view, the chances of four [so far, possibly connected] mentions of 134.5 billion [exactly] is greater than 10 x 10 x 10 x 10 x a billion = a number that is not chance to one, or so....mokin:

It also seems that deep politics and deep finance are only a distinction, without a difference. :burnout:

[Magda Hassan]

Here's another $134.5 billion number link from Ticker.


From May 30th.
http://www.antara.co.id/en/view/?i=1243655060&c=FEA&s=

However, Elfian Effendi, executive director of Greenomics Indonesia, a natural resources advocacy non-governmental organization, said the REDD scheme with which Indonesia is expected to get US$3.75 billion incentive a year, belittled the economic value of Indonesian forests.

Indonesian forests held 7,000 megatons of carbon sinks with an economic value of about US$134.5 billion. Advanced countries must pay 134.5 billion dollars if they want to prevent Indonesia from releasing 7,000 megatons of carbon into the atmosphere through deforestation and peat land cultivation.

[Peter Lemkin]

Well there you go Lotto bettors....your lucky number! [Lately there seems no distinction to the way the world looks stoned and not stoned; drunk and not drunk. I think the end is near......:wavey:

[Ed Jewett]

Can anyone seriously doubt that some deep politics are going on here?

... deep politics and deep finance are only a distinction, without a difference.

Barkeep, another round of Glen-more-angie for these folks.

Yes, and put it on the tab, please...

I'll pay in yen in a decade or so.

But I'm thirsty now!