“Creative” Wall Street and Money-Laundering

I have long maintained that we will eventually learn that Citibank took over where BCCI and then Riggs Bank left off: serving as a money laundering vehicle used by drug cartels and other organized crime, terrorists, and spooks. But this article (h/t scribe) on the role of big banks in laundering Mexican drug money reports that–while Citibank has been implicated in money laundering (but took the appropriate regulatory steps in response)–there are a number of other banks deeply implicated:

  • Wachovia (now owned by Wells Fargo)
  • Bank of America
  • American Express
  • HSBC
  • Banco Santander

Most of these banks were implicated in Mexican legal filings. But in March, Wachovia entered into a Deferred Prosecution Agreement with the government that reveals some of the details behind its money laundering.

The DPA lays out the means by which Wachovia enabled money laundering as follows:

  • Allowing Mexican Casas de Cambio (exchange houses) to wire through Wachovia. From May 2004 through May 2007, Wachovia had processed at least $373 billion in CDC wire activity.
  • Offering a “bulk cash” service, in which Wachovia would arrange physical transport of large amounts of US dollars collected by the CDCs into the US. From May 2004 through May 2007, Wachovia processed over $4 billion in bulk cash for the CDCs.
  • Providing a “pouch deposit” service, in which CDCs would accept checks and travelers checks drawn on US banks, aggregate them into a pouch, and then forward them to Wachovia for processing. By May 2005, Wachovia had set up a digital scan system for this service. From May 2004 through May 2007, Wachovia processed $47 billion in digital pouch deposits for all its correspondent banking customers, including what it did for the CDCs.

The DPA also describes how Wachovia helped telemarketers steal directly from victims’ accounts–the subject of an unrelated lawsuit going back some years.

So here are two key details of this.

First, it appears that Wachovia deliberately got deeper into money-laundering for CDCs in 2005 even as the government issued more alerts about the way drug cartels were using CDCs.

As early as 2004, Wachovia understood the risk that was associated with doing business with the Mexican CDCs. Wachovia was aware of the general industry warnings. As early as July 2005, Wachovia was aware that other large U.S. banks were exiting the CDC business based on [anti-money laundering] concerns.

Despite these warnings, Wachovia remained in the business. And in September 2005, Wachovia purchased the right to solicit the international correspondent banking customers of Union Bank of California (“UBOC”). Wachovia knew that UBOC was exiting the CDC market due to AML problems. Wachovia hired at least one person from UBOC who had a significant role in the CDC business at UBOC. After UBOC exited the CDC business, Wachovia’s business volume increased notably.

September 2005 was definitely before most people realized the giant shitpile–of which Wachovia held more than its fair share–was going to explode. But Wachovia was already deep into it.

So $373 billion in wire services (some of which were surely legal), $4 billion in bulk cash services, and some portion of $47 billion in digital pouch services (again, some of which is surely legal and may pertain to remittances). Compare those numbers to the $40 to $60 billion or so in Wachovia subprime losses Wells Fargo ate when it took over Wachovia. Was Wachovia laundering money for drug cartels because it was so badly exposed in mortgage-backed securities, or was it so heavily involved in products that could be used for money laundering just for fun?

Now, for all of this, DOJ made Wells Fargo pay $160 million: $50 million that is an outright fine, and $110 million for what DOJ said it had identified as clear drug proceeds laundered through Wachovia. Now, granted, DOJ is fining Wells Fargo (beneficiary of huge amounts of free money from the Fed in recent years and the recipient of huge tax deductions for taking over Wachovia), not Wachovia. And granted, this was the largest fine ever for money laundering. But as the Bloomberg story notes, that’s less than 2% of Wells Fargo’s profits last year. And isn’t even as much as Wachovia got in deposits–$418 million–from the fraudulent telemarketing scheme.

Then there’s the bigger question. Who else was using these vehicles? Banks that enable this kind of money laundering tend to be indiscriminate about their client base. And as I noted when I started this post, money laundering for drug cartels tends to go hand in hand with money laundering for other organized crime, terrorists, and spooks. Given the scale of what Wachovia was doing, where are the other busts?

And while we’re looking for those other busts, note that the investigation of Wachovia started in May 2007, 17 months before the government brokered the Wells Fargo takeover. Is there any chance that Treasury, which would have been involved in this, was unaware of the massive amounts of money laundering Wachovia had been engaged in when they brokered that deal? Recall, too, the weirdness over the competition between Citi and Wells Fargo for the privilege of taking on the Wachovia shitpile. The Federal government was at one point prepared to take on a portion of Wachovia’s shitpile to allow Citi to take over the bank for a dollar a share. And when Citi CEO Vikram Pandit lost out on the deal, Andrew Ross Sorkin reported in Too Big to Fail, he told Sheila Bair, that “This isn’t just about Citi … There are other issues we need to consider. I need to speak to you privately. … This is not right. It’s not right for the country. It’s just not right!”

I don’t want to get too tinfoil about this. But it strikes me that the efforts to keep Wall Street and all its celebrated creativity intact serves to make it easier for banks like Wachovia to engage in widespread money-laundering. That is, it’s not just shadow banking as it is politely understood, but banking for entire shadow networks, both our own and our enemies.

Update: Aaron v. Andrew fixed–thanks SaltinWound.

Update: Here’s the full Bloomberg story.

  1. phred says:

    Well, well, well. So TARP wasn’t about ensuring that there would be credit available for Main Street after all. Why I am shocked! Shocked! To learn that TARP wasn’t about too big to fail, so much as keeping the financial dirty secrets of the world hidden.

    Honestly, I hope this is in fact the case, because then at least it isn’t just about corporate capture and political corruption. Which member of Congress was it, who said that when he was briefed about the impending financial collapse, “it scared the shit of out me”? Maybe we need to learn more of the details of that briefing…

  2. scribe says:

    Next time bankster’s shill appears on the TV singing hosannas about the “Creative Destruction of Capitalism” or similar, destruction-oriented propaganda that get used to help pitch the latest outrage against anything remotely resembling real capitalism or even common decency and obedience to law, consider this:

    that the guys pitching their [friends’] latest destructive episode are, in pitching destruction as good, admitting they [and their friends] can’t create a damned thing, but are capable only of destroying what their betters going before them had built.

    A shocking admission of both ineptitude and lack of creativity, if you ask me.

    But, to be fair, the knuckleheads graduating from our colleges over the last 30 years were hardly trained to be great intellects or to rise on their own merit by creating new businesses or being truly creative. They were trained to get along, talk easily, make the boss happy, suck the shit out of the ass of the person ahead of them on the totem pole and above all don’t offend the money people. True creativity would have, among other things, impaired the money people in making the regular payments on the debt they took out.

    So, whaddya expect when the people running the banks today are the people who formed the bases for the characters in American Psycho 20 years ago? You expect them to follow some silly law?

    Sliding a little OT, here, now:

    But, hey, I’m also the guy who pops up and reminds them that, if they were the true believers in Ayn Rand and Objectivism they claim to be, they’d all be clamoring for a fully-confiscatory estate tax because, as she said, the only people who should inherit wealth are those who wouldn’t need it to get wealthy in the first place (because they have superior skills). Of course, since we cannot know in advance who those people are until they prove out as being superiorly skilled after working for years, evenhanded justice would require the fully-confiscatory estate tax applied to everyone.

    You oughta have seen the dirty looks I used to get when I talked about that.

  3. bobschacht says:

    Thanks for exposing this! If you have a channel to bring this to the attention of the Financial Crisis Inquiry Commission, please do so.

    Bob in AZ

    • mattcarmody says:

      Everyone on that committee should be fully aware of the relationship between Wall Street, drug cartels, the various organized crime syndicates, the CIA, and international money laundering outlets. If they don’t know they wouldn’t be on the committee in the first place because it’s folks like them, like John Kerry, Lee Hamilton, and Richard Ben-Veniste through the years who serve on “investigatory” committees for the sole purpose of keeping the secrets secret.

      That’s what’s meant by national security and states secrets, never let the rest of us know how thoroughly corrupted the system has become. Always find a big fucking flag to hide behind while the money’s changing hands.

  4. fatster says:

    O/T, w/apologies

    Torture claims: David Cameron announces inquiry
    David Cameron has said a “judge-led” inquiry will look at claims that UK agents were complicit in the torture of terror suspects

    Including Binyam Mohammed


  5. barne says:

    Back in ’08, fraudulent charges from a company calling itself Sigma were appearing on credit cards. It was supposedly a charge for “office supplies,” but it was a smallish theft of around $9.48, which I’m sure a whole lotta victims just let slip by, either not noticing it or not having the time to deal with such a small amount. My credit card company didn’t seem AT ALL interested in tracking down this seemingly widespread fraud. They just wanted to credit my account and let it go. Oh, and they DID try to sell me a fraud protection service for big bucks per month.

    Me: (paraphrase) I see on the web that lots and lots of people are complaining about this Sigma charge appearing on their cards.

    My card Co.: (paraphrase) ‘Oh, they’ll get caught eventually. And if you push me to forward such a small fraudulent charge of $9.78 up the ladder, it’ll cost my company $40 to process, and the boss isn’t going to like THAT. By the way, would you like to buy fraud protection for only $big.00 dollars per month?”

    HOW IT EVOLVES: “Your mom, bless her heart, made an honest $20 million a year out of this family business. And Jim over there wants to buy it, and make the same honest dough. But I know how to make a $billion a year. And that means I can bid higher than anybody for the business your mom built. Who you gonna sell to, kids, Jim, or me?”

    • emptywheel says:

      One of the things about the telemarketer scam is that the bank got big payments anytime someone complained about it.

      However, Wachovia continued processing fraudulent transactions for that account and others, partly because the bank charged fraud artists a large fee every time a victim spotted a bogus transaction and demanded their money back. One company alone paid Wachovia about $1.5 million over 11 months, according to investigators.

      So the bank had an incentive to keep the scam in place bc it made bigger profits.

  6. barne says:

    You’re finally in the CEO chair, and you’ll retire in 6 years. Sooooo, you promote only the most honest people in your business to surround you, because you’re less worried about going out with your stock options maxed out by hook or crook, and you’re more worried about your customers welfare, right?

  7. temptingfate says:

    Seems that the tactics of shock and awe continues apace. Story and Morgenson covered the same issues related to AIG and the various scams that have been passed over recently in the NYT.

    “This was not about the banks,” said Sarah J. Dahlgren, a senior vice president for the New York Fed who oversees A.I.G. “This was about stabilizing the system by preventing the disorderly collapse of A.I.G. and the potentially devastating consequences of that event for the U.S. and global economies.”

    The regulators, or at least the people assigned to the tasks of oversight, are not longer shy about admitting that they see the only important issue as being whether enforcement helps the economy.

    Steal a hundred dollars and do 10 years. Steal a few billion and you better know someone or control a corporation. Steal a few hundred billion and the business will be forced to apologize and promise not to do it again before returning to business as usual.

    • thatvisionthing says:

      Steal a hundred dollars and do 10 years. Steal a few billion and you better know someone or control a corporation. Steal a few hundred billion and the business will be forced to apologize and promise not to do it again before returning to business as usual.

      I was leaving the same comment around in a few threads recently, comparing the legal consequences faced by environmental activists to those faced by BP in the Gulf. Astronomical difference.

      An activist who participated in this effort with the intention of protecting the environment, with no personal financial gain…

      We torched Jefferson Poplar because hybrid poplars are an ecological nightmare threatening native biodiversity in the ecosystem,” the saboteurs wrote in a communique that was released after the action. “Our forests are being liquidated and replaced with mono-cultured tree farms so greedy, earth-raping corporations can make more money.”

      …gets placed through uncertain means into a secret prison for “domestic terrorists”:

      Environmental and animal rights activists who do property damage may be classified as “domestic terrorists” with “inspirational significance.” This gets them a ticket to a special prison, a CMU—communication management unit–the purpose of which is to keep them almost totally isolated and with no due process to challenge their placement.

      Government Acknowledges Secretive Prisons for “Domestic Terrorists,” Proposes Making Them Permanent
      Apr 14th, 2010 by Will Potter

      The Bureau’s proposal makes clear that the CMUs are intended to keep these cases isolated, and to keep political prisoners with “inspirational significance” from communicating with the communities and social movements of which they are part.

      Per the podcast interview with Will Potter (at 5:55), apparently it’s not even known who assigns them to these units — it’s not a judge, maybe a warden, maybe higher up?

      These units used to be secret, but now they’re out in the open and multiplying and the government is trying to get even more stringent isolations put into law: A prisoner is to be allowed three pieces of paper a week to one recipient, one <15 minute phone call a month, one hour visit a month (down from the current four hours), and NO TOUCHING. (Inspiration is contagious?) The environmental activist/domestic terrorist in the story linked to above, Daniel McGowan, has not hugged his wife in two years

      I wonder what the dollar value assigned to his crime was, just to compare.

      As I said there, imagine if eco persons, or greater/common-good persons, were writing the laws instead of corporate persons.

      And in charge of enforcing them.

      • readerOfTeaLeaves says:

        I was leaving the same comment around in a few threads recently, comparing the legal consequences faced by environmental activists to those faced by BP in the Gulf. Astronomical difference.

        Or compare it to the guy who leaked to Wikileaks.

        • thatvisionthing says:

          And I was thinking of the guy on a Daily Kos comment thread recently who got 5 years in prison for using medicinal marijuana.

          In 1995, the garden that had done me so much good was discovered and my rural ranch was attacked by a platoon of National Guard troops being carried by Huey helicopters. I ended up losing all my property, my law license, and 5 years of my freedom; and while there I nearly died from lack of nutrition due to the fact that they would not prescribe me Marinol, the only pharmaceutical drug that has any effect at all. But I did get through it, and 15 years later am doing well. And let me say this: IT WAS WORTH IT. The relief from the illness was worth the Kafkaesque absurdity I had to suffer to attain it.

          He actually felt he had been faced with kindness by many involved in his saga, from the court to the prison system, yet all hands were tied and they had to do what they had to do. This is insane.

          Justice, when viewed in fine detail, is almost always uncontroversial. It so happens that there is no medical-necessity defense in Federal criminal cannabis law, so there was no legal defense for me in my case. I therefore used my punishment hearing to bring as much attention to the issue of cannabis hemp as I could. I laid my life bare–the illness; the self-destruction; the shame and indignity–and then proved up how my life had gotten better (including my rather nice income at the time) since I had used cannabis to treat my illness. And when I was done, the hard-right Republican judge presiding over my hearing gave me the minimum under the sentencing guidelines, saying he wished his hands were not tied and that he could go even lighter on me. He was a Reagan appointee, and no doubt supported the insane cannabis laws and strict sentencing guidelines which had put me in the position I was in. But even he could see the manifest injustice of the situation, and would have helped if he could. And my treatment during the imprisonment was similarly sympathetic; I will say that they spared no expense trying to treat me–except that the compound THC was forbidden, even in legal form, because it was not consistent with the whole rationale for my imprisonment. Prison guards, prison doctors, public officials, the prisoners themselves–I had all their sympathy and insofar as they could, their help. But I spent 53 months in prison nonetheless–and when I was sent to halfway house, and got a Marinol prescription for my illness and started “pissing” disloyally, they gave me the ultimatum of either voluntarily stopping the (LEGAL!) prescription (it messed up their loyalty/drug test, don’cha know), or going back to prison. (I went back to prison. Principles, don’cha see.)

          My point is that I believe in the essential goodness of people. I live in East Texas, and am surrounded by knee-jerk teabaggers and various varieties of Baptist know-nothing Bible-thumpers. And almost to a person, they are the nicest, most generous, most decent people you’d ever want to know.

          We had a lovely debate, I was saying the answer is jury nullification. If juries knew they were supposed to acquit defendants charged with crimes the jurors do not believe are crimes (one way to say it), juries would have been ending the war on drugs all these years ago, just like they helped end Prohibition. He would have been acquitted. But no, now juries cannot learn that constitutional function:

          Sparf vs US 1895:

          The case has occasionally been simplistically described as: Since the law has no way to prevent the jury from judging the law, they shall have that right, but only if they do not know it.

          I get wound up.

        • thatvisionthing says:

          And now this:

          Environmentalist Facing 3-Year Prison Sentence For Unfurling Banners in Senate Office Building

          Environmentalist Ted Glick will be sentenced today and faces up to three years in jail for hanging two banners inside the Hart Senate Office Building on Capitol Hill that read, “Green Jobs Now” and “Get to Work.” Glick was convicted in May of two misdemeanors—displaying a banner in a federal building and disorderly conduct—each of which carries a six-month jail sentence. But the U.S. Attorney’s Office has asked the judge to triple Glick’s sentence because of his two previous convictions, both of which also related to non-violent protests.

          What ever happened to right to petition?

  8. ShotoJamf says:

    Very interesting story, EW. While I acknowledge that there are about One Billion Other Stories to be covered out there, I do think a bit more time could be spent on this drug cartel stuff. Basically, we’ve got a war going on right up close and personal, and (for whatever reasons) there’s a virtual media blackout on it. Anyway, really good story. Amazing stuff.

    • emptywheel says:

      The big Bloomberg story describes a AML Wachovia guy in London resigning bc the company ignored his complaints–and he tied his complaint directly to the number of people killed by drug cartels.

      But the thing is, he was at Wachovia until 2009. So I wonder if this is still going on.

      • ShotoJamf says:

        But the thing is, he was at Wachovia until 2009. So I wonder if this is still going on.

        With the amount of cash flowing internationally from these transactions, it would be a stretch (for me, at least) to believe that it isn’t going on all day, every day. And this doesn’t even speak to the cashflow through numbered offshore accounts.

  9. Mauimom says:

    And I assume this is getting widely covered in the “traditional” media like the NYT and WaPoo, right?

    The best we can hope for these days is that Rolling Stone picks up the story, which should be easy for them to do, since Marcy’s done all the heavy lifting.

    But RS’ recent notoriety ought to cause of few more people to read about this.

    • emptywheel says:

      It was reported in March by the NYT and WSJ, at a minimum. And DOJ did do a real press release, which is more than they did in the case of some of the DPAs under Bush. That said, I really wonder about using a DPA in this case–where were the bank employees getting indicted for this?

      • thatvisionthing says:

        Deferred Prosecution Agreement — does that mean a corporate monitor? Who, and for how much? Corporate monitoring as I see it seems to be another way to launder money between the government and corporations via the DOJ and favors to old friends like ex-AGs Ashcroft, Mukasey, and I guess Gonzalez too? Oh, please, don’t throw me in that criminal prosecution briar patch!

  10. joanneleon says:

    Well *that* gives the name “American Express” a whole new meaning!

    I do remember the weirdness of the fight over Wachovia. I never even considered that a big money laundering gig might have something to do with it. Nor did I know about a deferred prosecution agreement for Wachovia for money laundering. All that media attention to the banking crisis and I don’t think I ever heard anyone mention anything about money laundering. Does deferred prosecution mean they’ll never be prosecuted?

    Just an aside and maybe indicative of nothing: Remember in the summer of ’08 when someone reported receiving counterfeit money from a Wachovia branch?

    Thanks for bringing this to our attention.

    I wonder if John Kerry has retired from this type of investigation.

    • phred says:

      I wonder if John Kerry has retired from this type of investigation.

      I certainly hope so. John Kerry is just another corporate apologist these days. In his last election, 30% of the primary vote went to his progressive opponent. That was a large enough percentage to rock NPR’s little world, Bob Siegel was nearly hyperventilating into the microphone. I hope we succeed in unseating Kerry next time…

  11. temptingfate says:

    Does deferred prosecution mean they’ll never be prosecuted?

    Not them nor any other large bank.


    No big U.S. bank — Wells Fargo included — has ever been indicted for violating the Bank Secrecy Act or any other federal law. Instead, the Justice Department settles criminal charges by using deferred-prosecution agreements, in which a bank pays a fine and promises not to break the law again.

    ‘No Capacity to Regulate’

    Large banks are protected from indictments by a variant of the too-big-to-fail theory.

    Indicting a big bank could trigger a mad dash by investors to dump shares and cause panic in financial markets, says Jack Blum, a U.S. Senate investigator for 14 years and a consultant to international banks and brokerage firms on money laundering.

    The theory is like a get-out-of-jail-free card for big banks, Blum says.

    “There’s no capacity to regulate or punish them because they’re too big to be threatened with failure,” Blum says. “They seem to be willing to do anything that improves their bottom line, until they’re caught.”

      • thatvisionthing says:

        I have long maintained that we will eventually learn that Citibank took over where BCCI and then Riggs Bank left off: serving as a money laundering vehicle used by drug cartels and other organized crime, terrorists, and spooks.

        Reading this, I was remembering another post here about a British newspaper story:

        Drug money saved banks in global crisis, claims UN advisor

        Drugs and crime chief says $352bn in criminal proceeds was effectively laundered by financial institutions

        * Rajeev Syal
        * The Observer, Sunday 13 December 2009

        Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations‘ drugs and crime tsar has told the Observer.

        Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were “the only liquid investment capital” available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.

        Sure enough, the post I’m remembering is ew’s We’re All BCCI Now from 12/12/09:

        I’ve been saying for a while that when everything finally unravels, it will probably be revealed that Citibank has been playing the same function as BCCI–the bank that served as the means for organized crime, terrorists, and the CIA to launder money in the 80s–once did.

        A related story worth looking at again.

        • readerOfTeaLeaves says:

          I was actually rethinking the timeline of the Carlyle Capital Group implosion in March 2007, the week that Spitzer got flayed in the press. Greg Palast drew some interesting connections, and lo and behold RBMS were pieces of the puzzle.
          I think it all links up.
          Also, note that Carlyle’s legal cousin, Carlyle Group, operates a ton of NSA spooks stuff.
          All of which makes EW’s timeframe here (2005 – 2007ish) all the more intriguing, eh?

          I’m with EW on that circular question of ‘which was it? that the banks were in bogus RMBS’s in order to hide their money laundering? or the money laundering led to the RMBS crap’?

          As for EW’s:

          I don’t want to get too tinfoil about this. But it strikes me that the efforts to keep Wall Street and all its celebrated creativity intact serves to make it easier for banks like Wachovia to engage in widespread money-laundering. That is, it’s not just shadow banking as it is politely understood, but banking for entire shadow networks, both our own and our enemies.

          I’m almost starting to take pride in my tin foil hattery. I’m thinking large ostrich feathers, bright twirly thingys, and a very large bow. After all, I’d hate to think this complicit bullshit is only worth a tin foil baseball cap; that would be a serious form of ‘underdressing’ given the scope of the scams.

          Also, EW’s hypothesis is ***perfectly*** in keeping with Hank Paulson’s 3 Page Edict to Congress: ‘gimme the money and don’t ask no questions, not-now-not-evah’ bullshit. Also with the failure of Elizabeth Warren to ferret out where all that money went.

          Bottom line: finance is a national security issue.
          All the ego-driven Bushista mark-to-market bogus accounting bullshit and MozillaMortgages? Basically, it’s a form of handing our asses on a platter to drug lords around the world, plus probably the Russian Mafia and whoever wants to buy black nukes.

          But no doubt simplifying and cleaning up our tax and accounting regs would offer fewer buyout opportunities for private equity funds. Complexity pays better for the oligarchs.

    • thatvisionthing says:

      Per wikipedia:

      Under the U.S. Sentencing Guidelines, a past deferred prosecution will not count toward a defendant’s criminal history, if there was no finding of guilt by a court and the defendant did not plead guilty or otherwise admit guilt in open court. This is in contrast to a deferred disposition, which typically does involve such a finding or admission.

      So it’s interesting, DOJ could have gone for admission of guilt and didn’t? Is there a trail in DOJ as to who decides the path?

      An interesting sidetrack. I wanted to see what wikipedia said about “DPA”s so I searched there, came up with zilch. Then I tried searching “deferred prosecution agreement” there and got redirected here, to “Deferred Prosecution.” Is that obscure/d?

      Also weird. Usually I can search in a PDF but funnily I can’t in the DPA ew linked to — ? Wanted to search on “monitor” and “guilt”, got 0 results, then I tried searching on words I could see were there and also got 0 results. Are there PDFs and then other PDFs I guess is my question.

  12. scribe says:

    Oh, and I forgot:

    the whole idea of crooked balance sheets not showing all the income/expenses of the corporation being a good thing and not a crime was one of the things which got a big boost under Bushco. I’m sure you’ll all remember how they changed the rules to make it so the telcos’ not reporting all the money they got from the government for facilitating warrantless wiretapping was required behavior, instead of a crime.

    Kinda makes an honest evaluation of a balance sheet impossible, but, hey, it covers the other crimes….

  13. Gitcheegumee says:

    Thank you for this thread.

    Here is an article from earlier this year that includes additional info about some of the regimes and specific banks involved in money laundering:

    CORRUPTION: U.S. banks abetting corrupt regimes, probe finds | The …Feb 3, 2010 … CORRUPTION: U.S. banks abetting corrupt regimes, probe finds … Only banks are required under U.S. law to know their customers and reject …

    US Banks, Lobbyists Abetting Corrupt Regimes, Probe Finds …Feb 4, 2010 … US Banks, Lobbyists Abetting Corrupt Regimes, Probe Finds …. Our corporations are corrupt, our congress is corrupt and is led by a …
    http://www.commondreams.org/headline/2010/02/04-8 – Cached – Similar

  14. captjjyossarian says:

    I don’t want to get too tinfoil about this.

    Is it even tinfoil when there’s a 40+ year track record of this type of activity on Wallstreet?

    I mean, even after BCCI, we’ve had other signs such as NYSE Chairman Richard Grasso’s 1999 photo op hugging a FARC guerrilla commander in the Columbian jungle. What might that meeting have been all about? And isn’t it likely that he made many such business calls to the various drug cartel’s?

    In terms of bankers covering thier tracks:

    Reuters: CIA seek laid-off bankers in NY recruitment drive

    • mattcarmody says:

      There’s been a revolving door between Wall Street and Langley since day one.

      As far as I’m concerned you can’t be too surprised by what goes on in this country.

      It’s a big problem when workers try to unionize to protect their interests against manufacturers and unions are branded hotbeds of subversion. But it’s OK for a group like the National Association of Manufacturers, which held its first meeting in 1867, to speak with one voice as a lobbying arm for businesses, many of which are so filthy rich from tax subsidies and outright theft, that having one more group speak for their interests is overkill.

    • emptywheel says:

      Mostly I put the tinfoil caveat to suggest that there COULD be other interpretations of what Pandit was trying to say. I realize I’ve got little evidence to support my contention that Citi is the next big BCCI when both Wachovia and BoA are in line ahead of it. But I don’t doubt that the larger case is easy to make and not tinfoil at all.

  15. Gitcheegumee says:

    The Saudis acquired great chunks of Citibankafter the BCCI debacle. ..and Riggs had been a bank involved in the BAE/Saudi/Al Yamamah arms imbroglio.

    Interesting today,some financial news from British Petroleum :

    Source: Yahoo

    DUBAI (Reuters) – Oil company BP is seeking support from sovereign wealth funds in the Middle East and Asia to defend itself from any takeover bids while it deals with its massive U.S. oil spill, a senior UAE source said on Tuesday.

    BP executives have held talks with a number of sovereign wealth funds (SWFs) including Abu Dhabi, Kuwait, Qatar and Singapore, the source told Reuters under condition of anonymity.

    “BP is seeking a strategic partner so it doesn’t get taken over by other major oil companies such as Exxon and Total,” the source said. “It’s BP that is approaching the sovereign wealth funds not the other way round. They are the ones in need of a partner.”

    Read more: http://uk.finance.yahoo.com/news/bp-appeals-to-swfs-for

    Anybody remember when the Saudis wanted to buy the US ports,just a few years ago?

    And none other than AIG eventually became the buyer?

  16. TEBB says:

    I used to be a banker. Bank officers’ performance is based on several factors – the amount of loans they make, the amount of deposits they bring in, the amount of fee income their accounts generate. Banks are NOT real excited aboutmaking loans right now – so fee income and deposits are important and officers are getting pressured to generate them. If you are an officer and your job is on the line, you’ll be inclined to pull in the deposits from whereever you can so as to keep your job.

  17. Gitcheegumee says:

    Why this matters

    The World Bank has endorsed estimates by Washington-based Global Financial Integrity (GFI) in 2005 that illicit financial flows across borders range between 1.0 and $1.6 trillion per year. In 2009, GFI calculated illicit cross-border flows out of developing countries alone at approximately $850 billion – $ 1 trillion. With annual global foreign aid flows currently averaging some $100 billion per year, this led Raymond Baker, GFI’s Director, to conclude in testimony before the U.S. House of Representatives that

    “for every dollar Western governments have been handing out across the top of the table, crooked Western banks, businesses and middlemen of various descriptions have been taking back up to ten dollars of illicit proceeds under the table.”
    International financial secrecy, and the jurisdictions that sell it, are at the heart of the matter. The time has come to identify the culprits.

    Read more…

    Financial Secrecy IndexThe Financial Secrecy Index (FSI) creates a ranking which identifies the jurisdictions that are most aggressive in providing … 2009 Tax Justice Network.

    -What the Index reveals – -Implications – -Who is included?
    http://www.financialsecrecyindex.com/ – Cached – Similar

    NOTE: According to one of the reports from this site, roughly 1/2 of the secrecy jurisdictions have ties to Britain.These secrecy jurisdictions are NOT to be confused with tax havens.

    • thatvisionthing says:

      I never understand financial stuff. Dots and dots and dots. But we were talking here about another story recently about Japanese businessmen apprehended at the Italian border with a briefcase full of $134 billion of US bonds — they said they were on Japanese govt business to dump worthless debt:

      …the two men arrested by Italy were trying to secretly dump Bonds that were previously held by the nation of Japan. The men arrested have told Italian police they were ordered to move the Bonds by the government of Japan because the Japanese government has lost faith in the ability of the U.S. government to repay its debts.

      …it is now confirmed based upon the serial numbers of the Bonds, that the $134 Billion is part of the $686 billion of U.S. debt officially held by Japan.

      I don’t get moving the money, a dud here is a dud there to me, what I took away from it is that US money is getting to be known worldwide as worthless. There was a story yesterday on Daily Kos about how Saudis are going to quit developing new oil fields, to save the wealth for their descendants. I figured that was how you say “dollars are now worthless” in Arabic.

      • Gitcheegumee says:

        Well, now if the Saudis are going to quit developing NEW oil fields ,mebbe the BP investment may be attractive to them.

        (See comment #25.)

        • thatvisionthing says:

          Maybe. Maybe not. If money is worthless, and investments are worthless, because it’s all polluted with bubbly toxic “assets” — maybe the Saudis are the first to realize it, do the face palm with the collision of limited natural resources and unlimited greed. Everything that gets translated into money gets translated into worthless. Fees are wealth, labor isn’t. The Too Titanic To Fail WILL sink, because they keep trying to float it from the top down by making the hole in the bottom bigger. It’s all they know how to do. So maybe quit the translating, maybe stop digging, maybe change the doom loop.

      • Gitcheegumee says:

        Here’s a particularly nifty little site that has been doing yeoman’s work on financial legerdemain for some time now..They have special sections devoted to Citigroup and Wells Fargo, btw.

        Highly recommended.

        Inner City Press — Reporting and Taking Action from the South …Inner City Press is a non-profit organization headquartered in the South Bronx of New York City which is active in the fields of community reinvestment, …

        http://www.innercitypress.org/ – Cached – Similar

        What’s New on Site

        How to Contact Us

        About Inner City Press

        Citigroup Search This Site


        Bank Beat

        The Wells Fargo Watch

        More results from innercitypress.org »

        Inner City Press: Investigative Reporting from the United NationsInnerCityPress.com is engaged these days in investigative journalism from the United Nations, including the World Bank, the IMF, the UN Development Program …

        http://www.innercitypress.com/ – 5 hours ago – Cached – Similar

        Another favorite of mine is the Komisar Scoop-Lucy Komisar has been doing investigative reporting on financial hijinks for years. She did a spectacular piece on BCCI,and just recently won a Loeb award for an investigative piece on Alan Stanford,btw.

  18. Gitcheegumee says:

    I think that the word conspiracy, just as the word liberal. has gotten a bad rap….and rep.

    I was curious as to what the actual definition of conspiracy is.

    Hold on to your tin foil hats-this legal dictionary outlines a multitude of scenarios.

    conspiracy legal definition of conspiracy. conspiracy synonyms by …An agreement between two or more persons to engage jointly in an unlawful or criminal act, or an act that is innocent in itself but becomes unlawful when …

    legal-dictionary.thefreedictionary.com/conspiracy – Cached – Similar

  19. Gitcheegumee says:


    An agreement between two or more persons, to defraud a person of his rights by the forms of law, or to obtain an object forbidden by law;

    Okay, I am officially a collusion theorist


  20. Gitcheegumee says:

    “One of the things that is interesting about reading conspiracy theory is that much of what folks think is conspiracy is really many people acting in concert to make or protect their money.” – Catherine Austin Fitts

    Narco News Publishes C.A. Fitts Guide to Narco-DollarsOct 24, 2001 … Narco-Dollars. for Beginners. “How the Money Works”. in the Illicit Drug Trade. Part I in a Series. By Catherine Austin Fitts …
    http://www.narconews.com/narcodollars1.html – Cached – Similar

    Narco News Publishes Part III of C.A. Fitts on Narco DollarsNarco-Dollars. for Beginners. “How the Money Works”. in the Illicit Drug Trade. Click Here to Read Part I. Click Here to Read Part II …
    http://www.narconews.com/narcodollars3.html – Cached – Similar
    Show more results from http://www.narconews.com

  21. JMLagain says:

    Refresh my memory. Who was the Wachovia Exec who was involved in the money-laundering accusations at the RNC in Virginia? How or was that ever resolved?

  22. MarkH says:

    It has been argued that democracy won’t work once the public realizes they can vote to print more money for their projects or themselves directly.

    I think it can easily be argued Democracy might not work because a handful of the wealthiest realize they can buy government and redirect it to serving their purposes until the larger purpose of government is no longer served. That causes the break-down of the nation.

    We aren’t facing socialism because anyone wants it. We know a balanced capitalistic system can work pretty well and Dems are trying to put that in place. But, we’ve gone a long time with a minority growing richer and richer and they’ve done a great deal of damage with that. Even today the Court says the rich can use corporations to give as much as they want to blow up the campaign & election system to get what they want. These forces keep pushing the system out of balance and they might succeed.

    Add to that the drug money flowing through and around the world.
    Add to that the forged money.
    Add to that the political fights which now bring in foreign interests.

    It’s a lot to oppose when people simply don’t recognize, appreciate and fight to keep a solid working system.

  23. Gitcheegumee says:

    The Komisar Scoop | Reports & Analysis by Investigative Journalist …May 18, 2010… CORRUPTION: U.S. banks abetting corrupt regimes, probe finds … smoking gun: the IDT-Haiti contract; » Corruption: Laundromat Royale …

    thekomisarscoop.com/ – Cached – Similar

    Regulation & enforcement | The Komisar ScoopCorruption: Laundromat Royale. Inter Press Service (IPS), July 18, 2008. It sounded like the plot of an action thriller. A U.S. Senate subcommittee …

    thekomisarscoop.com/category/govt-politics/regulation/ – Cached

    NOTE: This Laundromat Royale article about UBS will blow your socks off!And be sure to read the commentary which follows-especially the Fitts statements regarding financial audits.