Fraud of the Offshore BanksOffshore Banking Scandal Continues, But What Indictments?
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Editorial Commentary
June 22, 2009 (FinancialWire) (By Bud Burrell) — Going back some sixyears, I have repeatedly commented on and described the shameful crisesof offshore banking, brokerage, hedge funds, naked shorting, moneylaundering, and support for terrorism. I have heard promise afterpromise of additional pending indictments, or recovery of stolen funds,or both, and I have patiently waited for the system to work.
It has all been for naught, as not a single indictment of a materialcharacter has come down except for the notorious Amir Elgindy, otherthan the truncated action against the criminal Badian brothers, andtheir coterie of facilitators. The manipulation of Sedona Corporationby this conspiracy should be the best case in the industry, yet all theFederal authorities have done is blow the case by the numbers.Further, there is even less evidence of any material recovery of thefunds spirited offshore by these highly organized criminal enterprises.
I know and have worked closely with many US Attorneys and theirinvestigators from various Federal agencies. I have seen theirfrustration with the system. Probably no one organization has sufferedmore severely than the FBI, whose retention rate is now approaching thepregnancy term of an Elephant, 20 months. It is not their collectivefault. Rather it is a signal of the wholesale corruption of ourpolitical, legal and judicial systems for the protection of hugelyfunded vested interests, whose integrity is non-existent.
I have repeatedly told the story of how criminals and theirfacilitators set up complex interlinked and layered structures mixinginternational business corporations with offshore irrevocable trusts,set up in non-matching venues/jurisdictions, using offshore banksprotected in every case by banking secrecy laws. All of the majorglobal brokers, banks, significant hedge funds, select money managers,and many major corporations have set up all forms of complex specialpurpose entities (SPE’s) most Americans first heard of in relation tothe hiding of profits by Enron.
A major sponsor of this kind of activity was the banking systems setup by one major player in Bermuda, operating through a huge spider webof enterprises all over the Caribbean, with links to many other suchentities globally, ranging from the Channel Islands off Britain, toCyprus, to such arcane locations as Vanuatu. One of those keyoperators in the formation and money laundering of such entities,Jonathan Curshen, of Red Sea Management, was arrested in Costa Rica,and he has been extradited over a year ago back to the US. Nothingmore has been heard from him, again quite suspiciously.
Tracking washed, flushed and laundered monies offshore has beensomething the USG has shown itself to be astoundingly incompetent at.The real story of Madoff behind the rip-off of a reported $50 Billionfrom investors is what happened to those monies over the $1 Billionrecovered thanks to Madoff coming in and giving it up. The impact ofsuch ham-handed behavior is to cause most Americans to wonder if thereported number of $50 Billion is even honest, or if the real numberisn’t in fact much larger.
Last week, the CIA ran ads in the New York Post and on BloombergRadio looking for investment bankers and hedge fund traders to helpthem unwind the monstrously complex systems of offshore banking andmoney laundering, including millions of regular wire transfers designedto make such money lose its identity. The ad itself was an indicationof the very first problem. Investment bankers and traders aren’t wherethe knowledge or expertise lies. It is in the hands of the back officeand banking officials handling the rolling wires done every 60 to 90days from one offshore account to another.
The details of how this is done are not nearly as important as thefact that many of the top experts are not even known to our lawenforcement officials, or if they are, there is no sustainedrelationship with not only them, but with the foreign entities thathave the real knowledge. They need the equivalent of financial bountyhunters, not employees or clerks, who will work for a percentage offunds that are located and returned. If ever there has been a case forthe old adage “You get what you pay for”, this is it.
One of the first really definitive works done on this process waswritten in the early 1970’s, “The Fountain Pen Conspiracy” by JonathanKwitny. I know that for several years, it was used by the FBI atQuantico in training agents in fraud by wire. This book is the storyof how the first known $100 Million dollar money laundering scam wasperpetrated, constructed by two lawyers in Florida, using an entityknown as the Bank of Sark, which was not much more than some P. O.Boxes in the Caribbean.
The next definitive book on this kind of process was “Metal Men” byA. Craig Copetas, on the story of the new Oil to old Oil conversionprocess that helped Mark Rich steal over $10 Billion from the US in the1970’s and 1980’s, only ended when he fled to Switzerland to avoidarrest under a DOJ indictment. He was later pardoned by PresidentClinton with the assistance of his lawyer, our current AttorneyGeneral, Eric Holder.
Another major money laundering operation was set up by the ArkansasDevelopment Finance Authority, set up to launder the drug moneyproceeds of the Iran Contra guns for drugs operation in Mena, Arkansaswhen Clinton was Governor. As revenues from those efforts started torun at $100 Million a month, it was realized that no bank in Arkansascould handle this kind of cash, and the ADFA moved all of its accountsto Bank of Credit and Commerce (BCCI) in Florida, later shut down inthe most important major bank scandal of that era.
There are more of these stories, but no stories of major politicalfigures being indicted. This is the pattern being repeated over andover again. If this is a primer, understand that I could write postgraduate level papers on the details of this series of scandals, whichhave morphed yet again into modern variants on this theme. All of youneed to understand that several Trillion dollars are gone offshore,maybe more than our annual GDP. We are doomed if a major part is notrecovered.
There are no dumb questions here. This is NOT a don’t ask, don’t tell problem. Wake Up and smell the burning economy.
About Bud Burrell
Bud Burell was born and raised in Tulsa, Oklahoma, until hisappointment to the U. S. Military Academy in 1964, where he studiedhistory, Judo, and Fine Arts, with electives in the Renaissance,Russian History, and Chinese Culture, until going on to serve fiveyears in the U. S. Army, including one year in Vietnam with the 5thSpecial Forces Group in two different jobs, completion of FinanceOfficer Career Course thereafter, and 2 years as the Project Financeand Accounting Officer at the test installation for the Army IndustrialFund at the Lexington (KY) - Bluegrass Army Depot. Burrell left to WallStreet in 1973, progressing through a series of more responsible jobs,concluding his career in specialty and derivative money managementconsulting and research and development in IT and AI. All of Burrell’swork since has been primarily with major development stage companiesfrom the IT, Energy, Alternative Energy, Bio-Pharma, and generaltechnology arenas, globally; as well as on the counterfeiting andfinancial fraud scandals domestically and internationally.
Mr. Burrell also regularly contributes to Investrend Weblogs (https://infoescrow.net/?u=https://www.investrendweblogs.net).
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