• Frank Huguenard Scientist, Film Maker and Speaker
  05/29/2016 01:12 pm ET | Updated 29 minutes ago 
• http://archive.is/bERJ6#selection-1141.0-1308.0

The Racketeer Influenced and Corrupt Organizations Act (RICO) is a United States Federal Law passed in 1970 that was designed to provide a tool for law enforcement agencies to fight organized crime.  RICO allows prosecution and punishment for alleged racketeering activity that has been executed as part of an ongoing criminal enterprise.  

Activity considered to be racketeering may include bribery, counterfeiting, money laundering, embezzlement, illegal gambling, kidnapping, murder, drug trafficking, slavery, and a host of other nefarious business practices.

James Comey and The FBI will present a recommendation to Loretta Lynch, Attorney General of the Department of Justice, that includes a cogent argument that the Clinton Foundation is an ongoing criminal enterprise engaged in money laundering and soliciting bribes in exchange for political, policy and legislative favors to individuals, corporations and even governments both foreign and domestic. 

James Comey

“The New York Times examined Bill Clinton’s relationship with a Canadian mining financier, Frank Giustra, who has donated millions of dollars to the Clinton Foundation and sits on its board. Clinton, the story suggests, helped Giustra’s company secure a lucrative uranium-mining deal in Kazakhstan and in return received “a flow of cash” to the Clinton Foundation, including previously undisclosed donations from the company’s chairman totaling $2.35 million.”

Bloomberg Politics

Initially, Comey had indicated that the investigation into Hillary’s home brewed email server was to be concluded by October of 2015.  However, as more and more evidence in the case has come to light, this initial date kept being pushed back as the criminal investigation has expanded well beyond violating State Department regulations to include questions about espionage, perjury and influence peddling.

Here’s what we do know.   Tens of millions of dollars donated to the Clinton Foundation was funneled to the organization through a Canadian shell company which has made tracing the donors nearly impossible.  Less than 10% of donations to the Foundation has actually been released to charitable organizations and $2M that has been traced back to long time Bill Clinton friend Julie McMahon (aka The Energizer).   When the official investigation into Hillary’s email server began, she instructed her IT professional to delete over 30,000 emails and cloud backups of her emails older than 30 days at both Platte River Networks and  Datto, Inc.  The FBI has subsequently recovered the majority, if not all, of Hillary’s deleted emails and are putting together a strong case against her for attempting to cover up her illegal and illicit activities.

A conviction under RICO comes when the Department of Justice proves that the defendant has engaged in two or more examples of racketeering and that the defendant maintained an interest in, participated in or invested in a criminal enterprise affecting interstate or foreign commerce.  There is ample evidence already in the public record that the Clinton Foundation qualifies as a criminal enterprise and there’s no doubt that the FBI is privy to significantly more evidence than has already been made public.

Under RICO, the sections most relevant in this case will be section 1503 (obstruction of justice), section 1510 (obstruction of criminal investigations) and section 1511 (obstruction of State or local law enforcement).  As in the case with Richard Nixon after the Watergate Break-in, it’s the cover-up of a crime that will be the Clintons’ downfall.  Furthermore, under provisions of title 18, United States Code: Section 201, the Clinton Foundation can be held accountable for improprieties relating to bribery.  The FBI will be able to prove beyond a reasonable doubt that through the Clinton Foundation, international entities were able to commit bribery in exchange for help in securing business deals, such as the uranium-mining deal in Kazakhstan.

It is a Federal Crime to negligently handle classified information under United States Code (USC) 18 section 1924.  It is a Federal Class A Felony under USC 18 section 798.  Hillary certified under oath to a federal judge that she had handed over to the state department all of her emails, which she clearly did not.  In spite of her repeated statements to the effect that everything that she did with her home brewed email server as Secretary of State was above-board and approved by the State Department,  the Inspector General Report vehemently refutes this claim.  Hillary refused to be interview by the Inspector General’s office in their investigation, claiming that her upcoming FBI interview took precedent but it seems more likely that Hillary is more concerned about committing perjury or admitting to anything that can be used against her in a court of law.

“Secretary Clinton should have preserved any Federal records she created and received on her personal account by printing and filing those records with the related files in the Office of the Secretary.  At a minimum, Secretary Clinton should have surrendered all emails dealing with Department business before leaving government service and, because she did not do so, she did not comply with the Department’s policies that were implemented in accordance with the Federal Records Act.”

Inspector General Report

Hillary Clinton is guilty of exposing classified documents to foreign governments by placing them illegally on her server, of sending and receiving classified documents and conspiring with her staff to circumvent the Freedom of Information Act (FOIA) by avoiding the use of the State Department run servers.  Some of the documents were so highly classified the the investigators on the case weren’t even able to examine the material themselves until they got their own clearances raised to the highest levels.

While there is an excellent cast to be made the Hillary committed treasonous actions, the strongest case the FBI has is charging both Bill and Hillary Clinton as well as the Clinton Foundation of Racketeering.  There’s no wonder why it’s taken this long for the FBI to bring forward a recommendation.  The rabbit hole is so deep on this one that it has taking dozens of investigators to determine the full extent of the crimes that have been committed.   Perhaps the most interesting question here is whether or not the FBI’s investigation will be able to directly link The Clinton Foundation with The Hillary Victory Fund.  If this happens, the DNC itself may be in jeopardy of accusations of either being an accomplice or of being complicit in racketeering.

Politico: Less than 1% of the Hillary Victory Fund Benefited State Parties

Posted on May 2, 2016 by WashingtonsBlog

http://www.washingtonsblog.com/2016/05/56251.html 

By Gaius Publius, a professional writer living on the West Coast of the United States and frequent contributor to DownWithTyranny, digby, Truthout, and Naked Capitalism. Follow him on Twitter @Gaius_Publius, Tumblr and Facebook. Originally published at at Down With Tyranny. GP article archive here.
According to Politico, of the $60 million raised by and for the Hillary Victory Fund, a PAC jointly controlled by the Hillary Clinton campaign and the DNC, less than 1% of the money raised ended up benefiting state Democratic parties.
Why does this matter? Because Clinton has been touting from day one, it seems, that she’s been raising money for the party as well as for herself, and the media, even after stories like this, by actor and activist Margot Kidder, started coming out, has been taking her at her word, allowing the assertion to go unchallenged, even when the facts were at hand.
I’ve been calling the Hillary Victory fund a “kickback scheme.” Others have called it money-laundering. Full explanation of how the transfers work is here.

Now Politico tells the tale, and includes some numbers to give you a sense of the scale of the operation and just how badly the state parties are getting screwed (my emphasis):

Clinton fundraising leaves little for state parties
The Democratic front-runner says she’s raising big checks to help state committees, but they’ve gotten to keep only 1 percent of the $60 million raised.
In the days before Hillary Clinton launched an unprecedented big-money fundraising vehicle with state parties last summer, she vowed “to rebuild our party from the ground up,” proclaiming “when our state parties are strong, we win. That’s what will happen.”
But less than 1 percent of the $61 million raised by that effort has stayed in the state parties’ coffers, according to a POLITICO analysis of the latest Federal Election Commission filings.
The venture, the Hillary Victory Fund, is a so-called joint fundraising committee comprised of Clinton’s presidential campaign, the Democratic National Committee and 32 state party committees. The set-up allows Clinton to solicit checks of $350,000 or more from her super-rich supporters at extravagant fundraisers including a dinner at George Clooney’s house and at a concert at Radio City Music Hall featuring Katy Perry and Elton John.
The victory fund has transferred $3.8 million to the state parties, but almost all of that cash ($3.3 million, or 88 percent) was quickly transferred to the DNC, usually within a day or two, by the Clinton staffer who controls the committee, POLITICO’s analysis of the FEC records found.
By contrast, the victory fund has transferred $15.4 million to Clinton’s campaign and $5.7 million to the DNC, which will work closely with Clinton’s campaign if and when she becomes the party’s nominee. And most of the $23.3 million spent directly by the victory fund has gone towards expenses that appear to have directly benefited Clinton’s campaign, including $2.8 million for “salary and overhead” and $8.6 million for web advertising that mostly looks indistinguishable from Clinton campaign ads and that has helped Clinton build a network of small donors who will be critical in a general election expected to cost each side well in excess of $1 billion.

First, note the numbers. The scheme allowed each Clinton donor to circumvent limits on contributions to Clinton herself by donating also the Hillary Victory Fund (HVF), twice in fact, once in 2015 and again in 2016. Kidder explains that

a single donor, by giving 10,000 dollars a year to each signatory state could legally give an extra $330,000 a year for two years to the Hillary Victory Fund. For each donor, this raised their individual legal cap on the Presidential campaign to $660,000 if given in both 2015 and 2016. And to one million, three hundred and 20 thousand dollars if an equal amount were also donated in their spouse’s name.
From these large amounts of money being transferred from state coffers to the Hillary Victory Fund in Washington, the Clinton campaign got the first $2,700, the DNC was to get the next $33,400, and the remainder was to be split among the 33 signatory states. With this scheme, the Hillary Victory Fund raised over $26 million for the Clinton Campaign by the end of 2015.

But it never ended up working that way, and to all appearances, by design. As Politico explains above, the states almost immediately transferred nearly 100% — 88%, to be exact — of their portion back to the DNC.
Those George Clooney Fundraisers
A side note about the numbers. The original stories on HVF, the joint fundraising PAC, had 33 states involved. The above story (Politico) has just 32 states involved, implying that one state dropped out. No problem with that, and in fact it makes the George Clooney fundraiser numbers make sense.
Politico again, but a different story:

It will cost more than four times the average income in San Francisco to have dinner next to Hillary Clinton and the Clooneys there next month.
For two seats at the head table with Clinton, George Clooney and his wife, attorney Amal Clooney, at an April 15 fundraiser, a couple must contribute or raise a whopping $353,400 — a huge ticket price for a hard-dollar fundraiser….
On April 16, Clinton and the Clooneys will reunite at the Clooney Los Angeles mansion, where tickets cost $33,400 per person to dine at the table with one of Hollywood’s most glamorous couples.

As the story makes clear, the fundraisers are for the Hillary Victory Fund. For the second fundraiser, $33,400 is the amount that can be raised per individual, twice that per couple, “for the DNC” (allegedly) as part of an HVF donation. For the first fundraiser, $353,400 (an odd amount, right?) is the sum of $33,400 (“for the DNC”) plus $320,000, or $10,000 each for 32 state parties (who again, transfer back almost all of the money they “receive”).
Hillary Victory Fund in the Spotlight, Finally
Some have seen this as a problem for quite a while. As the original Politico story notes:

The arrangement has sparked concerns among campaign finance watchdogs and allies of Clinton’s Democratic rival Bernie Sanders. They see it as a circumvention of campaign contribution limits by a national party apparatus intent on doing whatever it takes to help Clinton defeat Sanders during the party’s primary, and then win the White House.

In other words, “money laundering” (Cory Doctorow’s term, quoted here) or, as I’ve been calling it, a kickback scheme.
What’s notable is that this is being noticed. Now even Rachel Maddow may have to acknowledge, the next time Clinton says to Maddow’s face that she’s “raising millions for the states and down-ticket races” (my paraphrase), that maybe a follow-up question is required. After all, this isn’t just Sanders campaign manager Jeff Weaver, or writers like Cory Doctorow and Margot Kidder, talking. This is Politico.
So consider for a moment, at the very point in this campaign that…

• Clinton pivots to the general election and attacks Trump more than Sanders, and
• Trump pivots to the general election and rolls out “crooked Hillary”

… Politico rolls out a “crooked Hillary (even if it’s legal)” story of its own. Politico legitimizes Trump’s attack. Game on.
Takeaways: First, the media won’t be as kind to Clinton in the general election as it was in the primary. I know, the primary’s still going on, but only in fact, not in the world of the media.
Second, as many including myself have noted, the free ride Clinton has been given by the press, including CNN and MSNBC (a network some in frustration have started calling “MSHRC”) — that free ride has allowed Clinton to operate in an atmosphere of never have been called out, of never having to clean up her act.
That free ride is ending, and Politico is the outlet that’s ending it. (Please do read the whole Politico piece; there much more dynamite in it than I can quote. If you can, go through it to the end.)
The Democratic Party Responds
Two final points, both from the article at the top of this piece. First, this isn’t a fake-leak story, as in, “People are pretending to be talking without permission so those who gave their permission can get their message out.” This story relies on real leaks, as in, “People who are talking to us are afraid of the price they’ll pay if we use their names.”
In this case, the leaks are coming from the state parties who are getting screwed:

But it is perhaps more notable that the arrangement has prompted concerns among some participating state party officials and their allies. They grumble privately that Clinton is merely using them to subsidize her own operation, while her allies overstate her support for their parties and knock Sanders for not doing enough to help the party.
“It’s a one-sided benefit,” said an official with one participating state party. The official, like those with several other state parties, declined to talk about the arrangement on the record for fear of drawing the ire of the DNC and the Clinton campaign.

Second, those state officials are being schooled by the DNC in the correct method of response:

In fact, the DNC, which has pushed back aggressively on charges that it is boosting Clinton at the expense of other Democrats, has advised state party officials on how to answer media inquiries about the arrangement, multiple sources familiar with the interactions told POLITICO.
“The DNC has given us some guidance on what they’re saying, but it’s not clear what we should be saying,” said the official. “I don’t think anyone wants to get crosswise with the national party because we do need their resources. But everyone who entered into these agreements was doing it because they were asked to, not because there are immediately clear benefits.”

The states didn’t come up with this scheme, Clinton and the DNC did. And now it’s all coming out. Will it come out on CNN (and “MSHRC”) as well? That’s the next piece to watch for, now that Politico has given its permission and blessing.
And yes, you can bet this will be grist for the Trump machine’s mill.
Bad Judgment, Hubris or Never Saw the Sanders Movement Coming?
A thought from me. Clinton seems to be fraught with errors of her own making. Why on earth did she make those speeches after leaving the State Department, knowing that she would run, or at least, that running was one of the likely choices? Why do it? Greed? Bad judgement? Hubris? Or just the assumption that no one would call it out?
The same here, with this Hillary Victory Fund deception. Did Clinton and Wasserman Schultz never think this would be called out? Or did they think it would just be part of the background noise for most voters?
Or maybe she never saw coming a campaign that would say so clearly what only the whole country knows, but what would never be even whispered aloud by her bipartisan friends and the media. That the entire system is corrupt. That it needs taking down.
If no one speaks for the people, nothing will get publicly said. Sanders speaks for the people in the public arena for the first time in a generation. And no one in Clinton’s position perhaps, saw that coming, or figured out what an existential threat it would become.
Well, that existential threat is here, and it’s not going away. Bummer that, for some.

Mossack Fonseca: The Nazi, CIA And Nevada Connections... And Why It's Now Rothschild's Turn

Submitted by Tyler Durden on 04/03/2016 23:38 -0400
http://www.zerohedge.com/news/2016-04-03/mossack-fonseca-nazi-cia-and-nevada-connections-and-why-its-now-rothschilds-turn
For all the media excitement about the disclosed names in the "Panama Papers" leak, in this case represented by the extensive list of Mossack Fonseca clients, this is not a story about which super wealthy individuals did everything in their power, both legal and illegal, to avoid taxes, preserve their financial anonymity, and generally preserve their wealth. After all, that's what they do, and it should not come as a surprise that they will always do that, especially following last year's disclosure by the same ICIJ which revealed a list of 100,000 HSBC clients who had been dutifully avoiding the payment of taxes.
What the story is about is the nebulous world of offshore tax evasion and tax havens, which based on data from the World Bank, IMF, UN, and central banks, hide between $21 and $32 trillion, where registered incorporation agents and law firms in small Caribbean countries (and not so small US states) make the laundering of money and the "disappearance" of the super wealthy, into untracable numbers hidden behind shell companies, possible.
So, in order to learn some more about the real star of this story, the Panamanian lawfirm of Mossack Fonseca, we went to Fusion which has compiled a fascinating story of the company's history, founders, and key milestone events in its life.

These include the Nazis, the CIA, Mexican drug lords, and of course, the U.S.
First, here is the Nazi and CIA connection:

Jurgen Mossack’s family landed here in the 1960s. During World War II, his father had served in the Nazi Party’s Waffen-SS, according to U.S. Army intelligence files obtained by the ICIJ. Once in Panama, the elder Mossack offered to spy on communists in Cuba for the CIA. (Mossack Fonseca said the firm “will not answer any questions related to private information regarding our company founding partners.”)

Here is the connection to Mexican drug lord Rafael Caro Quintero, and perhaps to the DEA:

Many times Mossack Fonseca has had no clue which nefarious characters were doing what with the companies the firm created – as when Jurgen discovered in 2005, according to internal emails, that he was the registered agent and listed as the director for a company controlled by the Mexican drug lord Rafael Caro Quintero. The co-founder of the Guadalajara Cartel was convicted in Mexico in 1985 for the brutal murder of U.S. DEA agent Enrique “Kiki” Camarena. (Today, Quintero is again considered a fugitive by the US after walking out of prison in 2013 on a technicality).

Mossack Fonseca’s senior partners instructed an employee to carry out their resignation from the company upon the discovery. "Pablo Escobar was like a newborn compared to R. Caro Quintero!” Jurgen wrote in reaction to the news. “I wouldn't want to be among those he visits after he leaves prison!"

And then there is the state of Nevada:

In 2013, an Argentine prosecutor’s report linked Nevada-incorporated shell companies involved in a major corruption scandal to Mossack Fonseca. When those shell companies became the subject of a federal court battle in Nevada, the leaked files show, Mossack Fonseca employees took steps to remove paper records and to wipe computer files and phone logs at its Las Vegas office. One employee even traveled from Central America to Nevada to bring back files. “When Andrés came to Nevada he cleaned up everything and brought all documents to Panama,” according to an email dated Sept. 24, 2014.

Mossack Fonseca said it “categorically” denies hiding or destroying documents in its statement to the ICIJ: “Let us be clear that it is not our policy to hide or destroy documentation that may be of use in any ongoing investigation or proceeding.”

The leaked records also contradict sworn testimony by Jurgen Mossack, who told the federal district court that his firm was separate from “MF Nevada,” its office in Las Vegas, and had no control over it. Mossack Fonseca “has never maintained an office, establishment or principal place of business in Nevada,” Mossack testified in July 2015. But, according to the ICIJ investigation, internal documents show the opposite, indicating that the firm’s Panama City headquarters controlled MF Nevada’s bank account, and that the firm’s co-founders and one other official with the company owned 100 percent of MF Nevada.

Why is Nevada important? Because recall that according to a recent investigation by Bloomberg, "The World’s Favorite New Tax Haven Is the United States" ...

... and specifically several US states such as Nevada, Wyoming and South Dakota.

After years of lambasting other countries for helping rich Americans hide their money offshore, the U.S. is emerging as a leading tax and secrecy haven for rich foreigners. By resisting new global disclosure standards, the U.S. is creating a hot new market, becoming the go-to place to stash foreign wealth. Everyone from London lawyers to Swiss trust companies is getting in on the act, helping the world’s rich move accounts from places like the Bahamas and the British Virgin Islands to Nevada, Wyoming, and South Dakota.

“How ironic—no, how perverse—that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour,” wrote Peter A. Cotorceanu, a lawyer at Anaford AG, a Zurich law firm, in a recent legal journal. “That ‘giant sucking sound’ you hear? It is the sound of money rushing to the USA.”

That money is rushing for one simple reason: dirty foreign - and local - money is welcome in the U.S., no questions asked, to be shielded by the most impenetrable tax secrecy available anywhere on the planet.
One may even say that nowadays, US-based tax havens are the new Switzerland, or Bahamas or, for that matter, Panama. Indeed, for most Americans, offshore tax haven are now meaningless with the passage of the FATCA law, which makes the parking of dirty US money abroad practically impossible. So where does that money go instead - it stays in the US:

Others are also jumping in: Geneva-based Cisa Trust Co. SA, which advises wealthy Latin Americans, is applying to open in Pierre, S.D., to “serve the needs of our foreign clients,” said John J. Ryan Jr., Cisa’s president.

Trident Trust Co., one of the world’s biggest providers of offshore trusts, moved dozens of accounts out of Switzerland, Grand Cayman, and other locales and into Sioux Falls, S.D., in December, ahead of a Jan. 1 disclosure deadline.

“Cayman was slammed in December, closing things that people were withdrawing,” said Alice Rokahr, the president of Trident in South Dakota, one of several states promoting low taxes and confidentiality in their trust laws. “I was surprised at how many were coming across that were formerly Swiss bank accounts, but they want out of Switzerland.”

And, to top it off, there is one specific firm which is spearheading the conversion of the U.S. into Panama: Rothschild.

Rothschild, the centuries-old European financial institution, has opened a trust company in Reno, Nev., a few blocks from the Harrah’s and Eldorado casinos. It is now moving the fortunes of wealthy foreign clients out of offshore havens such as Bermuda, subject to the new international disclosure requirements, and into Rothschild-run trusts in Nevada, which are exempt.

* * *

For financial advisers, the current state of play is simply a good business opportunity. In a draft of his San Francisco presentation, Rothschild’s Penney wrote that the U.S. “is effectively the biggest tax haven in the world.” The U.S., he added in language later excised from his prepared remarks, lacks “the resources to enforce foreign tax laws and has little appetite to do so.”

Yes, Mossack Fonseca may now be history, and its countless uberwealthy clients exposed, but none other than Rothschild is now delighted to be able to fill its rather large shoes. In fact, someone with a conspiratorial bent may decide that today's dramatic takedown of the Panama "offshoring" industry was nothing more than a hit designed to crush the competition of domestic "tax haven" providers... suxh as Rothschild.

How The U.S. Government And HSBC Teamed Up To Hide The Truth From A Pennsylvania Couple

Submitted by Tyler Durden on 03/02/2016 23:30 -0500
http://www.zerohedge.com/news/2016-03-02/how-us-government-and-hsbc-teamed-hide-truth-pennsylvania-couple
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
The reason both the Democratic and Republican establishments are in full on panic mode about the rise of Donald Trump and Bernie Sanders is a deep seated fear that the plebs have finally woken up.
Democrats rail against big corporations, while Republicans rail against big government. This scheme has been used to successfully divide and conquer the public for decades while big government and big business successfully schemed to divert all wealth and power to an ever smaller minuscule segment of the population — themselves.
It took awhile, but the people are finally starting getting it and they are royally pissed off. One of the primary mechanisms for this historic elite theft has been the creation of a two-tiered justice system in which the rich, powerful and connected are never prosecuted for their criminality. Instead, the government actively protects them by pretending corporate entities commit crimes as opposed to individuals. Of course, this is impossible, but yet it’s how the government handles white collar crime. The Orwellian named “Justice Department” casually utilizes deferred prosecution agreements (DPAs), in which companies pay a little fine and the criminals themselves walk away with not just their freedom, but ill gotten monetary gains as well.

Nowhere is this most apparent than when it comes to the big banks. The individuals who work at these criminal cartels can literally do anything they want with total impunity. One of the most egregious examples of this was the $1.9 billion settlement arranged with HSBC for laundering Mexican drug cartel money and dealing with sanctioned countries. If you or I did this we’d be sitting in a concrete box eating porridge through a straw for the rest of our lives, but when “masters of the world” at big banks do it, the parent company just pays a slap on the wrist fine and life goes on. That’s how oligarch justice works.

Although the Department of Justice and HSBC thought the money laundering case was settled ancient history, a determined chemist from Pennsylvania is throwing a wrench into their plans and it could have major implications.
The Wall Street Journal reports:

WEST CHESTER, Pa.—When Dean Moore ran into roadblocks with a request for mortgage relief, he did what many people do: He sat down at his kitchen table to bang out an angry letter.

The letter has thrust Mr. Moore, a chemist, and his wife, Ann Marie Fletcher-Moore, a part-time bookstore manager, into a high-stakes battle over whether HSBC Holdings PLC must release a secret report on its compliance with a $1.9 billion money-laundering settlement.

A “secret” report. You’ve got to be kidding me.

The disclosure would be the first ever for this type of case and would shine a light on an increasingly common practice for banks accused of breaking the law. Instead of being prosecuted, banks typically enter into settlements under which they often agree to be overseen by monitors whose detailed judgments are kept secret. Judge Gleeson’s order has the potential to dial back that confidentiality, opening a new channel of information that prosecutors say could threaten the viability of such settlements in future cases.

If you don’t get by now that America is a banana republic, there’s little hope for you.

HSBC and Justice Department prosecutors have opposed the release, saying it wouldn’t do much to help Mr. Moore with his mortgage predicament. Judge Gleeson, in his order to unseal the report, said that was irrelevant.

Big banks and the U.S. government are simply 100% in bed together. Constantly scheming to prevent citizens from learning the truth.

The bank is appealing the ruling, but already it may be having an impact. HSBC disclosed last week that the January report by independent monitor Michael Cherkasky found instances of potential financial crime and had “significant concerns” about the bank’s pace of progress in complying with the money-laundering settlement.

A legitimate government that cared about the people would want the public to know this, but not the U.S. government.

The Moores say the experience has been surreal. The couple lives in this Philadelphia suburb with their four children, two dogs and a 15-year-old rabbit and had never spent much time in court other than for jury duty. They have nevertheless held their own against a phalanx of lawyers from the British bank and the Justice Department. A recent hearing in a Brooklyn federal court “was like ‘Law and Order,’” said Mrs. Fletcher-Moore, who is 50 years old.

HSBC admitted in its 2012 settlement that it failed to catch at least $881 million in drug-trafficking proceeds laundered through its U.S. bank and that its staff stripped data from transactions with Iran, Libya and Sudan to evade U.S. sanctions.

The mortgage was administered by HSBC, and the Moores say they wrote to the bank starting in 2008 asking it to temporarily lower the 7% interest rate. They said the lender appeared receptive, only for its representatives to misplace documents needed to complete their application for a loan modification several times.

Frustrated, the Moores researched the bank online last year and stumbled upon news of the money-laundering settlement and the monitor’s secret report. The Moores say they believe the report details faulty internal controls like those they encountered when trying to modify their loan.

If his ruling stands, it would be “the first time we get to see what happens after a bank settles a prosecution,” said Brandon Garrett, a professor at University of Virginia’s law school who has studied the monitor system.

Which is exactly what the U.S. government doesn’t want people to see.

HSBC and the Justice Department are still fighting to keep the report private and have appealed Judge Gleeson’s ruling to the Second Circuit Court of Appeals. An appeals court ruling could be months away. “I feel like a very small boat in a very large ocean,” Mr. Moore wrote at one point, in a letter responding to some of their arguments.

For more on the corrupt U.S. justice system, see:
How the Department of Justice is Actively Trying to Prevent Civil Asset Forfeiture Reform
Is the Justice Department Finally Ready to Jail Corporate Criminals?
Florida Man Sentenced to 2.5 Years in Jail for Having Sex on the Beach
Some Leaks Are More Equal Than Others – Hypocritical D.C. Insiders Line up to Defend General Petraeus from Prosecution
Some Money Launderers are “More Equal” than Others
Some Money Launderers are More Equal than Others Part 2 – CEO of BitInstant is Arrested
Just another day in the…

Germany Shuts Down Canadian Bank Tied To Money Laundering

Submitted by Tyler Durden on 02/08/2016 07:39 -0500
http://www.zerohedge.com/news/2016-02-08/germany-shuts-down-canadian-bank-tied-money-laundering

For the first time since 2012, Bafin - Germany’s banking regulator, which for a minute looked like it might actually accuse Anshu Jain of lying about LIBOR - has closed a bank.

All financial transactions by Maple Bank of Canada’s German subsidiary have been halted on the grounds the operation has too much debt or, as BaFin put it, there’s “a prohibition on transfer of ownership and payment, due to imminent over indebtedness.”

Maple - which describes itself as having expertise in "equity and fixed income trading, repos and securities lending, deposits, structured products and institutional sale" - has obligations of around €2.6 billion and assets of €5 billion meaning it “has no systemic relevance” - to quote BaFin again.

It is however, “relevant” for National Bank - Canada’s sixth largest financial institution which has a 24.9% stake in Maple. National will now take a full reserve against that stake, the carrying value of which is CAD165 million. “That means National Bank’s CET 1 capital ratio will take a 13-basis-point hit,” WSJ notes, adding that “this isn’t the first time that National Bank has seen its regulatory capital level dented in recent months.”

No, it’s not, and this “isn’t the first time” that Maple Bank has been under the microscope.

As The New York Times reminds us, Maple “played a prominent role in attempts by the Porsche family to take over Volkswagen several years ago [by] helping Porsche lock up Volkswagen shares using a complex combination of derivatives.”

Former Porsche CEO Wendelin Wiedeking and former CFO Holger Härter are on trial in Stuttgart, where the pair face allegations that they purposefully lied to investors in 2008 to inflate VW shares. “Porsche was threatened financially at the time, according to prosecutors, because a sharp decline in Volkswagen shares forced it to post cash to protect Maple Bank from losses,” The Times adds.

In other words, Maple Bank was the institution at the center of the infamous short squeeze that caused VW shares to soar in October of 2008 when the automaker briefly became the most valuable company on the planet. At the time, the company’s market cap was greater than Apple, Philip Morris, and Intel combined.
Maple Bank is also under investigation for tax "irregularities." Last September, German prosecutors raided the bank's offices and homes tied to its employees in what Reuters called "a probe of serious tax evasion and money laundering connected to dividend stripping." Prosecutors alleged that at least 11 people illegally claimed some €100 million in tax paid using an illegal dividend arb. "Previous cases of dividend stripping in Germany have involved buying a stock just before losing rights to a dividend, then selling it, taking advantage of a now-closed legal loophole that allowed both buyer and seller to reclaim capital gains tax," Reuters said, outlining the circumstances behind the infraction.
Apparently, once Maple Bank made the government mandated provisions for taxes, its financial situation deteriorated meaningfuly. In other words, Germany effectively put the bank out of business. "Frankfurt prosecutors allege that Maple Bank and its business partners have bilked the taxpayer of some 450 million euros," Reuters added on Sunday. "The bank has an equity capital of just 300 million euros."
As for National Bank, the lender said on Sunday that it "has advised the German authorities that if it is determined portions of dividends received from Maple Financial Group Inc. could be reasonably attributable to tax fraud by Maple Bank, arrangements will be made to repay those amounts to the relevant authority." CEO Louis Vachon is "surprised" at the developments, but says his bank's results will not be materially affected by developments in Germany.
Now if only BaFin would get serious about investigating Europe's largest bank which, unlike Maple, has quite a bit of "systemic relevance," we might be able to take the regulator seriously.

How Chinese Oligarchs Used Fake Trade Invoices To Launder Almost $1 Trillion Globally

Submitted by Tyler Durden on 05/04/2015 22:20 -0400
http://www.zerohedge.com/news/2015-05-04/how-chinese-oligarchs-used-fake-trade-invoices-launder-almost-1-trillion-globally
Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Our estimates show that the developing world lost US$991.2 billion in illicit financial flows in 2012, over ten times the amount of official development aid received by these countries in that year, and greater than the amount of net foreign direct investment received. From 2003 – 2012, US$6.6 trillion left developing country economies illicitly.

Illicit outflows from developing countries increased at a trend rate of 9.4 percent per annum in real terms over the time period from 2003 to 2012. Though growth rates of IFFs tended to be higher before the financial crisis, their volume continues to climb. Over this time period, illicit financial flows were equivalent to 3.9 percent of developing world GDP on average.

Save for a brief slowdown during the financial crisis, illicit financial flows have been allowed to grow unchecked over the past decade. In 2012, illicit outflows reached a staggering new peak of US$991 billion.

– From the Global Financial Integrity Report: Illicit Financial Flows from Developing Countries: 2003-2012

While the U.S. government loves to target and imprison small time so-called “money launderers” such Bitcoin pioneer Charlie Shrem, the real money launderers, the ones who help drug cartels and pump criminally sourced money into foreign real estate thus pricing out domestic populations worldwide, face no consequences whatsoever. I’ve explored this hypocrisy on many occasions, most recently in the post, Some Money Launderers are More Equal than Others Part 2 – CEO of BitInstant is Arrested. Here’s an excerpt:

Last May, I wrote an article titled: Some Money Launderers are “More Equal” than Others, which likened the U.S. government to the pigs that ruled the roost in George Orwell’s classic novel Animal Farm. In that article, I decided to compare the way the “authorities” used money laundering laws against Liberty Reserve, versus the way they tip-toed around massive money laundering for Mexican drug cartels that HSBC engaged in. Since I wrote that article, JP Morgan has been fined tens of billions of dollars for a cornucopia of criminal activities. Meanwhile, we have yet to see a single executive arrested or put behind bars. Why?

I think it is quite obvious. The United States’ “economy” has devolved into nothing more than a state-sanctioned criminal racket. A handful of oligarchs and the corporations they control, are immune from prosecution no matter what they do. They have a complete and total license to steal with impunity. Meanwhile, if a peasant is caught stealing 10 dollars or found with a dime bag of weed, it is jail for life. ‘Merica.

So now I turn your attention to the breaking news that Charlie Shrem, the impressive, young and very talented kid behind Bitcoin exchange BitInstant, has been arrested.

Shrem now sits in a prison cell for his victimless non-crime. This is how the United States Attorney’s Office for the Southern District of New York proudly announced the charges against Shrem:

Yes, you read that right. ONE MILLION DOLLARS. Meanwhile, big banks launder billions for drug cartels, and corrupt Chinese launder trillions into overseas real estate, yet take a look at who ends up in prison. A 24-year old innovator and entrepreneur who harmed no one by “laundering” a million bucks. You only need to ask yourself two questions to understand what is going on here:

1. Who poses a greater risk to society, Charlie Shrem or HSBC executives?
2. Who poses a greater risk to the status quo’s rigged system, Charlie Shrem or HSBC executives?

Now you know why one person sits in jail, while the others remain free. The U.S. justice system is a compete and total joke.
But I digress. This post is supposed to be about illicit Chinese funds and how it’s basically a total free for all. Much of this money has entered U.S. real estate, helping to price out American families who can barely afford rent at this point (see: 1 in 4 Renters Use Half Their Pay for Housing). I’ve focused on this issue often over the past couple of years. For example, in the post, Chinese Purchases of U.S. Real Estate Jump 72% as The Bank of China Facilitates Money Laundering, I wrote:

American citizens already have a hard enough time affording a home. Squeezed out by financial oligarchs buying tens of thousands of properties for rental income, and faced with real wages that haven’t budged since the mid-1970s, the demographic of U.S. citizens that historically dominated the new home market has been forced to live in their parents’ basements. Just to kick em’ when they’re down, Americans now face the impossible task of competing with laundered Chinese money.

While this trend may not be new, it is certainly accelerating. According to the National Association of Realtors in its annual report on foreign home purchases, transactions from Greater China (includes Hong Kong and Taiwan) were up 72% in the past year to $22 billion. In some California communities, 90% of real estate buyers are from China. Yes, 90%. Naturally, many of them are buying multi-million dollar homes in “all cash” transactions.

There have been several studies looking at how this money is laundered, but a report from Global Financial Integrity (GFI) released last December points out that fake trade invoices, i.e., misinvoicing trade transactions or trade-based money laundering, seems to be the primary vehicle used. Quartz dug into the data and provided some interesting commentary and telling charts. Here are a few excerpts:

China’s capital account might be closed—but it’s not that closed. Between 2003 and 2012, $1.3 trillion slipped out of mainland China—more than any other developing country—says a report (pdf) by Global Financial Integrity (GFI), a financial transparency group. The trends illuminate China’s tricky balancing act of controlling the economy and keeping it liquid.

GFI says the most common way money leaks out in the developing world is through fake trade invoices. The other big culprit is “hot money,” likely due to corruption—which GFI gleans from inconsistencies in balance of payments data.

In China, both activities have picked up since 2009. In fact, $725 billion—more than half of the outflows from the last decade—has left since 2009, just after the Chinese government launched its 4 trillion yuan ($586 billion) stimulus package.

Even after that wound down, the government encouraged investment to boost the economy, prodding its state-run banks to lend. Since loan officers dish out credit to the safest companies—those with political backing—this overwhelmingly benefited government officials and their cronies.

That’s left small private companies so starved for capital that they’ll pay exorbitant rates for shadow-market loans, which a lot of China’s sketchy trade invoicing outflows likely sneaked back in to speculate on shadow finance and profit from the appreciating yuan. Corrupt officials, meanwhile, shifted their ill-gotten gains into overseas real estate and garages full of Bentleys.

The paragraphs above are particularly telling. Just like in the U.S., the so-called government “stimulus” in China achieved nothing more than to stimulate an oligarch crime spree. Hence the global boom in $100 million real estate, art and everything extremely high-end. As intended, the bailouts and stimulus on a global basis went directly to the 0.0001%.
Finally, here are a couple of choice passages I found from the GFI report itself:

This report, the latest in a series of annual reports by Global Financial Integrity (GFI), provides estimates of the illicit flow of money out of the developing world–as a whole, by region, and by individual country–from 2003-2012, the most recent ten years of data availability.

The vast majority of illicit financial outflows is due to trade misinvoicing.

Can you believe it’s not Bitcoin after all!

Save for a brief slowdown during the financial crisis, illicit financial flows have been allowed to grow unchecked over the past decade. In 2012, illicit outflows reached a staggering new peak of US$991 billion.

Read that twice, and then read it again. The banker bailouts bailed out the criminals and their criminal global financial system, which then ramped to new heights of corruption and fraud in the subsequent years.

Illicit financial flows from developing countries are facilitated and perpetuated primarily by opacity in the global financial system. This endemic issue is reflected in many well-known ways, such as the existence of tax havens and secrecy jurisdictions, anonymous companies and other legal entities, and innumerable techniques available to launder dirty money—for instance, through misinvoicing trade transactions (often called trade-based money laundering when used to move the proceeds of criminal activity).

Now, here are a couple of the main conclusions from the report:

Our estimates show that the developing world lost US$991.2 billion in illicit financial flows in 2012, over ten times the amount of official development aid received by these countries in that year, and greater than the amount of net foreign direct investment received. From 2003 – 2012, US$6.6 trillion left developing country economies illicitly.

Illicit outflows from developing countries increased at a trend rate of 9.4 percent per annum in real terms over the time period from 2003 to 2012. Though growth rates of IFFs tended to be higher before the financial crisis, their volume continues to climb. Over this time period, illicit financial flows were equivalent to 3.9 percent of developing world GDP on average.

That is what Oligarchy looks like.
*  *  *
For related articles, see:
Chinese Purchases of U.S. Real Estate Jump 72% as The Bank of China Facilitates Money Laundering
Open the Floodgates – Chinese Inquiries on U.S. Real Estate Soar 35% After Easing of Visa Rules
Corrupt Chinese Politicians are Buying Billions in U.S. Real Estate
Welcome to Arcadia – The California Suburb Where Wealthy Chinese Criminals are Building Mansions to Stash Cash
How NYC’s Biggest Real Estate Project in a Generation is Being Financed by Selling Green Cards to the Chinese

Big Banks Started Laundering Massive Sums of Drug Money In the 1980s … And Are Still Doing It Today

For More Than 30 Years, the Big Banks Have Been Key Players In the Drug Trade

Posted on May 2, 2014 by WashingtonsBlog 

 

It has become mainstream news that at least some of the big banks are  laundering staggering sums of drug money.  See this, this, this, this, this, this and and this.
But you may not know the scope or history of the problem.
Official statistics show that huge sums of drug money are laundered every year:

The United Nations Office on Drugs and Crime (UNODC) conducted a study to determine the magnitude of illicit funds generated by drug trafficking and organised crimes and to investigate to what extent these funds are laundered.  The report estimates that in 2009, criminal proceeds amounted to 3.6% of global GDP, with 2.7%  (or USD 1.6 trillion) being laundered.

This falls within the widely quoted estimate by the International Monetary Fund, who stated in 1998 that the aggregate size of money laundering in the world could be somewhere between two and five percent of the world’s gross domestic product.  Using 1998 statistics, these percentages would indicate that money laundering ranged between USD 590 billion and USD 1.5 trillion. At the time, the lower figure was roughly equivalent to the value of the total output of an economy the size of Spain.

Indeed, the head of the United Nations Office on Drugs and Crime says that drug dealers kept the banking system afloat during the depths of the 2008 financial crisis.
This started a long time ago. For example, Citibank was caught laundering drug money for Mexican cartels in 2001.
In the 1990s, earlier, Citibank apparently set up special client accounts for a big drug dealer:

One of the more infamous cases involving taxpayer bailed-out Citigroup’s ties to money laundering drug cartels emerged in the late 1990s when Raúl Salinas de Gortari, the brother of former Mexican President Carlos Salinas, was arrested after his wife, Paulina Castañón, attempted to withdraw $84 million from a Swiss account controlled by Raúl under an alias.
***
According to a 1995 Los Angeles Times report, Salinas “amassed at least $100 million in suspected drug money.”
Switzerland’s top prosecutor at the time, Carla del Ponte, “launched the investigation after the U.S. Drug Enforcement Administration supplied information that led Swiss agents to the accounts in Geneva, where they arrested Raúl Salinas’ wife and her brother on Nov. 15 as the pair attempted to withdraw more than $83 million.”
Del Ponte told the Los Angeles Times that after observing Salinas’ interrogation by Mexican federal prosecutors the sums found in those accounts were “suspected to be from the laundering of money related to narcotics trafficking.”
In 1998, when Swiss prosecutors completed their Salinas investigation, The New York Times disclosed that “Swiss police investigators have concluded that a brother of former President Carlos Salinas de Gortari played a central role in Mexico’s cocaine trade, raking in huge bribes to protect the flow of drugs into the United States.”
***
A 1998 report by the General Accounting Office (GAO) pointed a finger directly at Citibank. Investigators revealed that “Mr. Salinas was able to transfer $90 million to $100 million between 1992 and 1994 by using a private banking relationship formed by Citibank New York in 1992. The funds were transferred through Citibank Mexico and Citibank New York to private banking investment accounts in Citibank London and Citibank Switzerland.”
With the connivance of bank officials, in 1992 Salinas was able to “effectively disguise” the source of those funds and their destination.
Indeed, with hefty fees secured from assisting their well-connected client Salinas, Citibank “set up an offshore private investment company named Trocca, to hold Mr. Salinas’s assets, through Cititrust (Cayman) and investment accounts in Citibank London and Citibank Switzerland.”
***
A 1999 Senate Permanent Subcommittee on Investigations report on “Private Banking and Money Laundering” revealed that “a culture of secrecy pervades the private banking industry.”
“For example,” Senate investigators disclosed, “in the case of Raul Salinas . . . the private bank hid Mr. Salinas’ ownership of Trocca by omitting his name from the Trocca incorporation papers and naming still other shell companies as the shareholders, directors, and officers. Citibank consistently referred to Mr. Salinas in internal bank communications by the code name ‘Confidential Client Number 2′ or ‘CC-2.’ The private bank’s Swiss office opened a special name account for him under the name of ‘Bonaparte’.”

In the 1980s, the Bank of Credit and Commerce International (BCCI) – apparently backed by top CIA officials – laundered drug money.  Time Magazine reported in 1991:

Because the US wanted to supply the Mujahideen rebels in Afghanistan with stinger missiles and other military hardware it needed the full cooperation of Pakistan. By the mid-1980s, the CIA operation in Islamabad was one of the largest US intelligence stations in the World. `If BCCI is such an embarrassment to the US that forthright investigations are not being pursued it has a lot to do with the blind eye the US turned to the heroin trafficking in Pakistan’, said a US intelligence officer.

As Wikipedia notes, Alfred McCoy (Professor of history at the University of Wisconsin-Madison, and one of the world’s top experts on drug trafficking)

[McCoy] uncovered money laundering activities by banks controlled by the CIA, first the Castle Bank which was then replaced by the Nugan Hand Bank, which had as legal counsel William Colby, retired head of the CIA.  He also alludes to the BCCI, which seems to have played the same role as the Nugan Hand Bank after its collapse in the early 1980s, claiming that “the boom in the Pakistan drug trade was financed by BCCI.

Citibank was still laundering Mexican drug money in 2001.
And nothing has changed since then.
The big banks are still laundering staggering sums of drug money.   For example, NPR noted last month:  “Awash in cash, drug cartels rely on big banks to launder money“.
And an HSBC employee who blew the whistle on that banks’ money laundering for terrorists and drug cartels says: “America is losing the drug war because our banks are [still] financing the cartels“, and “Banks financing drug cartels … affects every single American“.
(And see this.)
If you can’t believe that the banks would launder drug money, just take a look at their other crimes.
The Feds are a big part of the problem. After all, they support some ruthless, criminal drug cartels, have repeatedly protected drug smugglers and supported drug producers (update).
Obviously the war on drugs is a total boondoggle.

Global Partners Pledge $240 Million to Fight Neglected Tropical Diseases (Another that makes me go hummmm)

Uniting to Combat NTDs, a partnership of foundations, global health organizations, and pharmaceutical companies, has announced commitments totaling $240 million to fight neglected tropical diseases (NTDs) that disproportionately affect the world's most vulnerable populations.
A new commitment of $120 million by a group of the partners of will be used to combat soil-transmitted helminths (STH), intestinal worms that are among the most common cause of infections in poor children. The funding includes commitments of $50 million from the Children's Investment Fund Foundation to provide technical assistance to national deworming programs; $50 million from the Bill & Melinda Gates Foundation to explore the feasibility of interrupting transmission and mitigating the risks of drug resistance; $8 million over five years from the Buenos Aires-based nonprofit Mundo Sano to test strategies for deworming and develop combination treatments; and $4.5 million from Vitamin Angels to scale deworming with Vitamin A distributions and  implementation support.
In addition, Dubai Cares will design programs that integrate nutrition, deworming, and water, sanitation, and hygiene (WASH) interventions in schools; WaterAid will deliver WASH programs in NTD-endemic areas; and the World Food Programme will work to ensure deworming interventions are provided as part of school feeding programs.
The World Bank also announced that it is committing $120 million from the International Development Association, its fund for the poorest countries, to support NTD control and elimination programs across Africa, including support for school-based deworming programs.
Spearheaded by the Gates Foundation and launched two years ago to support efforts to meet the World Health Organization's control, elimination, and eradication targets for ten specific NTDs by 2020, the Uniting to Combat NTDs effort also includes the U.S. Agency for International Development, the UK Department for International Development, more than a dozen pharmaceutical companies, and a number of nongovernmental organizations. In conjunction with the announcement of the new commitments, the partnership released a report highlighting the progress made over the past two years.
"We're taking the 'neglect' out of neglected tropical diseases, thanks to the commitment of partners from across the public and private sectors," said Gates Foundation co-chair Bill Gates. "Pharmaceutical companies are providing drugs free of charge, endemic countries are scaling up integrated screen-and-treat programs for multiple diseases, and donors are delivering essential funding. If we stay focused, we can reach the London Declaration's 2020 goals and help provide millions with access to health."

"Global Partners Are Taking the 'Neglect' Out of 'Neglected Tropical Diseases'." Uniting to Combat Neglected Tropical Diseases Press Release 04/02/2014.