Chiasso financial smuggling case

Chiasso financial smuggling case

The Chiasso financial smuggling case began on June 3, 2009 near Chiasso, Switzerland (near the Swiss/Italian border), when Sezione Operativa Territoriale di Chiasso in collaboration with officers of Italian customs/financial military police (Guardia di Finanza) detained two suspects (who appeared to be Japanese nationals in their 50s)[1] who had attempted to enter Switzerland with a suitcase in their possession with a false bottom containing what at first appeared to be U.S. Treasury Bonds worth $134.5 billion.[2][3][4] The two possessed 249 U.S. bonds worth $500 million each (among other securities, they also had 10 "Kennedy bonds" denominated at $1 billion each); and the large denominations of the securities, along with accompanying bank documentation was what attracted the Italian police's attention.[2] Large denominations are not available to the general public; only nation-states handle such amounts of money.

Contents

Investigation and determination

Assessment as to the authenticity of the bonds began immediately (counterfeiting of these securities was suspected). One source reported that the U.S. Securities and Exchange Commission had been requested to verify the authenticity of the bonds.[4] A spokesmen for the Bureau of Public Debt has commented on the matter.

On June 18, 2009 the Financial Times reported that the Italian police and the U.S. Secret Service had concluded that "the bills and accompanying bank documents were most probably counterfeit, the latest handiwork of the Italian Mafia."[5] Though this information has not been verified by Italian official sources. Mckayla Braden, senior adviser for public affairs at the Bureau of Public Debt at the U.S. Treasury Department also said that this type of counterfeit bond scam "has been going on for years." Although these bonds, if fake, appear to have been of very high quality. Col. Rodolfo Mecarelli, the provincial commander of the financial police in Como, said that the bonds "are made of filigree paper of excellent quality."[1]

The Financial Times also reported that the two suspects "had been released" by Italian authorities. No additional comment or elaboration from the Guardia di Finanza headquarters in Rome was available. As well, Ed Donovan, a spokesman for the U.S. Secret Services has said that the “U.S. Secret Service, which polices counterfeiting of U.S. currency, is assisting Italian authorities in tracing the source of the fake bonds."[6]

Nonetheless, Japanese authorities also remained interested in the matter; Takeshi Akamatsu, a press secretary for the Japanese foreign ministry, confirmed that the two suspects were carrying Japanese passports and had been detained and questioned by the Guardia di Finanza (Italian financial/customs military police), but that Tokyo had not been informed of their names or whereabouts during or after their release.[7]

The motivation or likelihood of passing counterfeit bonds of these types and size is not known at this time.

Reactions and speculation

There has been very little in the way of official statements regarding this case, raising concerns about who made them,[5] dumping of U.S. debt[8] and Italian interests.[9]

Other questions include the identities of the Japanese men detained, the reason for their release, the origin of these high quality fake bonds, the U.S. Secret Service investigation, lack of Italian official acknowledgment of fakes and many other questions.[10]

Initial reactions to the story contemplated the possibility that the bonds were genuine; if the bonds had proven to be genuine, this case would have been regarded as the largest single act of smuggling (with respect to financial value) in recorded history.[3] The total value of the counterfeit bonds was estimated at approximately one percent of total U.S. GDP in 2008.[11] The pair would also have been considered the fourth largest creditor to the U.S., ahead of the United Kingdom and just behind Russia.[12] As well, according to Italian law failing to declaring currency above 10,000 euros can be punished by fines of 40%.

Since the confirmation by American officials that the bonds were counterfeit, some reactions have shifted to taking note of a general loss of confidence in international banking and finance (in general) and the U.S. dollar in particular—as noted by a recent downward trend in the U.S. Dollar Index (and the dollar reaching a new low for 2009 vs. other world currencies on July 28, 2009).[13] The Daily Telegraph commentator Edmund Conway noted that when U.S. Treasury Secretary Timothy Geithner traveled to China (in June 2009) and asserted in Beijing that Chinese financial assets denominated in the U.S. Dollar "are very safe," it drew laughter from the audience, even though laughter was not Geitner's intent.[12]

Conway also speculated that this incident may be a sign that "America is on the brink of losing its economic superpower status."[12]

Similar Incidents

On September 18, 2009, a similar incident was reported[14] by the Italian financial military police Guardia di Finanza, this time involving two (apparently) Philippine nationals smuggling U.S. Treasury bonds (valued at approximately $180 billion) at Malpensa Airport (the largest airport in Milan, Italy). The two were detained and the assessment of this case is on-going.[15]

On January 26, 2011, another similar incident was reported[16] by the Italian military police Carabinieri, this time involving six smuggling U.S. Treasury bonds (valued at approximately €20 billion and said to be counterfeit) at a highway rest stop. The six are under investigation for receiving stolen goods.

See also

Notes

  1. ^ a b "Italien rätselt über 96-Mrd.-Euro-Schmuggel". Financial Times Deutschland. 2009-06-13. http://www.ftd.de/politik/europa/:Kennedy-Bonds-Italien-r%E4tselt-%FCber-96-Mrd-Euro-Schmuggel/526520.html. Retrieved 6 July 2009. 
  2. ^ a b "Sequestrati a Chiasso titoli USA per novantasei miliardi di euro". Guardia di Finanza. 2009-07-06. http://www.gdf.it/GdF__Informa/Notizie_Stampa/AdnKronos/Adnkronos_2009/Adnkronos_Giugno_2009/info-1518911049.html. Retrieved 6 July 2009. [dead link]
  3. ^ a b "US government securities seized from Japanese nationals, not clear whether real or fake". AsiaNews.it. 2009-06-08. http://www.asianews.it/index.php?l=en&art=15456&size=A. Retrieved 6 July 2009. 
  4. ^ a b "2 Japanese carrying $134 bil worth of U.S. bonds detained in Italy". Japan Today. 2009-06-11. http://www.japantoday.com/category/crime/view/2-japanese-carrying-134-bil-worth-of-us-bonds-detained-in-italy. Retrieved 6 July 2009. 
  5. ^ a b "Mafia blamed for $134bn fake Treasury bills". Financial Times. 2009-06-18. http://www.ft.com/cms/s/0/82091ec2-5c2f-11de-aea3-00144feabdc0.html. Retrieved 6 July 2009. 
  6. ^ "UPDATE 1-U.S. Treasury says bonds seized in Italy are fakes". Reuters. 2009-06-19. http://www.reuters.com/article/companyNewsAndPR/idUSN1946360420090619. Retrieved 6 July 2009. 
  7. ^ "U.S. says smuggled Treasury bonds were fake". Gold Anti-Trust Action Committee. 2009-06-21. http://www.gata.org/node/7514. Retrieved 6 July 2009. 
  8. ^ "Employees of Japan Finance Ministry arrested in Italy trying to smuggle $134 Billion in U.S. Treasuries in suitcases". Turner Radio Network. http://www.turnerradionetwork.com/index.php?option=com_content&view=article&id=59:employees-of-japan-finance-ministry-arrested-in-italy-trying-tosmuggle-134-billion-in-us-treasuries-in-suitcases&catid=1:latest-news&Itemid=50. Retrieved 6 July 2009. 
  9. ^ "$134.5 BILLION worth of US bonds seized from smugglers at Swiss border". Boing Boing. 2009-06-14. http://www.boingboing.net/2009/06/14/1345-billion-worth-o.html. Retrieved 6 July 2009. 
  10. ^ "The Bond Saga: It Gets More Odd". The Market Ticker. 2009-06-21. http://market-ticker.org/archives/1142-The-Bond-Saga-It-Gets-More-Odd.html. Retrieved 6 July 2009. 
  11. ^ "Country Comparison: National Product". The World Factbook. Central Intelligence Agency. https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html. Retrieved 6 July 2009. 
  12. ^ a b c Conway, Edmund (2009-06-20). "Is this the death of the dollar?". London: Telegraph. http://www.telegraph.co.uk/finance/economics/5586543/Is-this-the-death-of-the-dollar.html. Retrieved 6 July 2009. 
  13. ^ Brown, Matthew (2009-07-28). "Dollar Touches 2009 Low as Economic View Reduces Safety Demand". Bloomberg.com. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTaWdIwzI_mw. Retrieved 2010-11-07. 
  14. ^ "Il mistero dei bond falsi Miliardi verso la Svizzera - Corriere della Sera". Corriere.it. http://www.corriere.it/cronache/09_settembre_20/bond_falsi_delfrate_661f9a3e-a5c6-11de-a2a4-00144f02aabc.shtml. Retrieved 2010-11-07. 
  15. ^ "Libero Quotidiano - Filippini con 180 miliardi nel trolley. Mistero alla dogana di Malpensa". Rassegnastampa.mef.gov.it. http://rassegnastampa.mef.gov.it/mefeconomica/View.aspx?ID=2009091813722922-2. Retrieved 2010-11-07. 
  16. ^ [finance.yahoo.com/news/Italy-confiscates-euro20-apf-1927243563.html "Italy confiscates euro20 billion in fake US bonds"]. Yahoo.com. finance.yahoo.com/news/Italy-confiscates-euro20-apf-1927243563.html. Retrieved 2011-01-26. 

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