To x et als. "The Pirate Bankers"

Getting back to you X: Read the following because this is where I`m going. This is an excerpt from an forthcoming book by James S. Henry. Henry calls himself an "artist" which I agree, if he deliver what this excerpt promises. Yes I printed this before but i think it`s more relevant now. This book has been pushed-back a few times.

Description:
The denizens of the global underground economy are as diverse as they are colorful: incredibly wealthy tax evaders with megamansions, 200-foot yachts, and $45 million private jets; arms dealers and mercenaries; drug-dealing warlords; art forgers and art thieves; Russian oligarchs, Russian mobsters, and Chechnyan terrorists; the Saudi Royal family and their mujahideen arch-enemies; smugglers, interrogators, assassins, con artists and fraudsters of all description; more than a few corrupt First and Third World politicians, judges, dictators, generals; and even a prelate or two. Despite their diversity, all these players share the same basic financial concerns for their stocks of anonymous private wealth—at last count, worth more than $5 trillion—against the threats posed by prosecutors, tax men, kidnappers, and each other. Fortunately for this Noah’s Ark of subterranean characters, a sophisticated network has grown up to deliver precisely these services. This global "pirate banking" system now conceals the riches of the world’s wealthiest people and largest corporations as well as many of its worst villains. They are all citizens of a brave new virtual country—one that lacks a physical location, but offers them freedom from most taxes, laws, and moral restraints.

Beemoe

I like this kind of stuff, i'm trying to find out about financers that opreat for the italian mafia organizations...and yes it is like you wrote..they have amazing wealth, some of them are famous businessman and some of them are anonymous.
they opreat all over the globe and they have those luxrious things like you worte:
"megamansions, 200-foot yachts, and $45 million private jets"....

good stuff!

x-man

X-MAN, X-MAN,
IT'S ALL AROUND YOU MATE.
CHECK THE LASEST POSTS UNDER THE PRINCI AFFAIR.
IF YOU CAN READ ITALIAN THEN THERE IS SOME OF WHAT YOU WANT.
IT'S NOT SPECIFIC BUT THIS IS JUST AN EXAMPLE.

financers that opreat for the italian mafia organizations.
It can not be possible that this is organized in my opinion.

yes gianni i know this stuff...

May I ask if it's ok here?
Do you know this stuff, or do you imagine this stuff?

If there is a return on investment then there is money for any project around the world no mater the group.

Oh! you know this.

Hey how's Europaradiso going for our friend?
Do you think it will go ahead?

i said i know this stuff because i read it like you on the web, i don't know more than that....

i don't know if europardiso will go ahead...time will tell

x-man

Interesting conversation: I`m curious about who operates in Milan. I could be wrong but I think that`s where all the real action is. You have the finance, business, fashion and cultural connections. you have to also realize that Milan is also very close to Campione.

You get a "higher" class of person from Milan, meaning a person who is more worldly and sophisticated. Anybody?

yes it's correct....read in the cosa nostra topic and you will see today's posts about the arrest in milan of the manger of "banca lugano", he suspect of laundering huge sums of money for the sicilians in some tax heavens using his bank as transit point for the money...

you know the name salvatore filippone ?

the calabrians have some important financers with big connections in the political, finance and economic systems over the world....and as our friend carmelo once wrote here- the police know maybe 1% of the italian mafia money laundering opretions....

x-man

Fascinating X: have you been to Milan?

yes, but for a very short time...

I have James Henry in my email. Maybe I can get him over here to discuss his book.

it will be great

Did you ever find any info. on our dude in South Africa.....Vito P. I`m not going to try to spell or mispell his name again. Hehehe

Hey X: Salvatore Filippone looks like one of the connections between the Russians and various Italian organizations. It`s going to take me a while to read the long article. I`m feeling this.

not really...no new information about him for months now....

This post has been edited by x-man on May 12 2008, 03:59 PM

yes, he worked for the calabrese....

he had so much money that the story tells he baught a shoe spree for 7000$ or something like that...

i can imagine that in the current time for the ndrangheta there are a lot of "Salvatore Filippones" out there.

they are amazing global economic power.

it will be great if you will be able to send me the link to the article you talked about.

thanks my friend.

x-man

ciao

yes, i love all this. after all, this is what it all comes down to today - a far cry from the 'early days' of the mafia, and what a mafioso was and stood for. Pino Arlaachi's book really does begin to nail this, although it was back in the early 80's, it still has its relevance as what he says is only confirmed today.

Wealth and its proliferation! As we have said many many times, the numbers are mind blowing, and this is the reason the mafia et al will not relinquish their hold, whatever the outward signs might APPEAR to be


Buona Fortuna

'The king is dead. Long live the king'

Hey X: I will send you the link tomorrow. It`s very long. I`ve been going back and forth with James Henry. I think he likes what we are doing. more tomorrow!

I agree with you Bagheriaboy.....good observation.

http://www.sisde.it/sito%5CSupplemento.nsf/servnavig/24

As I said before a very long and intellectual article concerning organized crime and socio-economics and Salvatore Filippone.

yea it's the famous article.

Hey X: speaking on Vito Pallaozzo (maybe I mispelled it again hehehehe) Jiggy knows some things on him. contact jiggy over at the "LA Crimefile" Martin@ Noseweek never got back to me. Jiggy may be the way to go.

It`s funny....the financial architecture behind crime.......hey fellas, this is where "The Sovereign Society" checks in, hehehe at, that this "architecture" has existed for sooooooo long. Offshore banks, tax havens, numbered accounts, bearer share, IBC`s, capitive insurance companies.....it`s funny that a hand full of books have been written on how it`s really done.

What`s really funny all the politicians who protect this "architecture" like Sen. Gramm. It reminds me of what Bill Greene said years ago about using the same mechanisms that the rich do.

New Books......Hoyt L. Barber who wrote that landmark book called "Tax Havens of the World" has several new books out "Tax Haven Today" Hell to Havana" "Secrets to Swiss Banking" These books are written the perspective of a person who really operate in the Offshore. There`s even a Chicago Outfit connection in his fiction book "Hell To Havana"

James S. Henry again.....in Litchenstein


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The Nation Business Banks & Banking

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Attack of the Global Pirate Bankers
By James S. Henry

July 22, 2008

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Reuters Pictures
UBS Chairman of the Board of Directors Peter Kurer addresses a general shareholder meeting of the bank in Basel April 23, 2008.
For what is the crime of burglarizing a bank, compared with the crime of building one? --Bertolt Brecht


EDITOR'S NOTE: Additional reporting for this piece was provided by Lauren Citrome, Samuel W. duPont, Ben Silk, Jessica Bidgood, Sonia Tan and Renee Birenbaum as part of the Tufts University-Institute for Global Leadership Investigative Economics Program.

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James S. Henry: For decades, the world's largest banks have been helping wealthy Americans steal billions in unpaid taxes. What are we going to do about it?
The Hearing: Last week in Washington we got a rare look inside the global private banking industry, whose high purpose it is to gather up the assets of the world's wealthiest people and many of its worst villains, and shelter them from tax collectors, prosecutors, creditors, disgruntled business associates, family members and each other.

Thursday's standing-room-only hearing on tax haven banks and tax compliance was held by the US Senate's Permanent Subcommittee on Investigations, chaired by Michigan Senator Carl Levin, a regular critic of tax havens--except when it comes to offshore leasing companies owned by US auto companies. He presented the results of his Committee's six-month investigation of two of Europe's most venerable financial institutions--LGT Group, the largest bank in Liechtenstein and the personal fiefdom of Crown Prince Hans-Adam II and the royal family, with more than $200 billion in client assets; and UBS, Switzerland's largest bank and the world's largest private wealth manager, with $1.9 trillion in client assets and nearly 84,000 employees in fifty countries, including 32,000 in the United States.

The theatrics included videotaped testimony by Heinrich Kieber, a Liechtenstein computer expert in a witness protection program with a $7 million bounty on his head, for supplying a list of at least 1, 400 LGT clients--some say more than 4,500--to tax authorities in Europe and the United States; two former American clients of LGT, who took the Fifth Amendment; Martin Liechti, head of UBS international private banking for North and South America, who'd been detained in Miami since April, and who also took the Fifth; Douglas H. Shulman, our sixth IRS commissioner in eight years, who conceded that offshore tax evasion must be a "serious, growing" problem even though the IRS has no idea how large it is; and Mark Branson, CFO of UBS's Global Wealth Management group, who apologized profusely, pledged to cooperate with the IRS (within the limits of Swiss secrecy) and surprised the Committee by announcing that UBS has decided (for the third time since 2002) to "exit" the shady business of providing new secret Swiss accounts to wealthy Americans.

There were also several other potential witnesses whose importance was underscored by their absence. Peter S. Lowy, of Beverly Hills, another former LGT client who'd been subpoenaed, is a key member of the Westfield Group, the world's largest shopping mall dynasty, which operates fifty-five US malls and 118 others around the world, is worth more than $12.4 billion, holds the lease on the World Trade Center, has many other properties in Australia and Israel, and was recently awarded a $3 billion project for the UK's largest shopping mall, in time for the 2012 Olympics. His lawyer, the renowned Washington fixer Robert S. Bennett, reported that Lowy was "out of the country" and would appear later, probably also just to take the Fifth. Perhaps he traveled to Australia, where his family is also reportedly facing an LGT-related tax audit. (Bennett's law partner, David Zornow, the head of Skadden, Arps' White Collar Crime practice, represents UBS's Liechti.) Steven Greenfield, a leading New York City toy vendor whose business had been personally recruited by the Crown Prince's brother, went AWOL and did not bother to send a lawyer. LGT Group declined to follow UBS's contrite example and also failed to appear.

Also missing from the roster were two prominent UBS executives: Robert Wolf, CEO of UBS Americas, who has bundled more than $370,850 for Barack Obama so far this year, making UBS his fifth-largest corporate donor; and former Texas Senator Phil Gramm, vice chairman of UBS Securities LLC, a leading lobbyist for UBS until March and, until recently, John McCain's senior economics adviser. While they were on the subject of offshore abuses, the Senate might also have wanted to depose former top McCain fundraiser James Courter, who also resigned last week, after it was disclosed that his telecom firm, IDT, had been fined $1.3 million by the FCC for using a haven company in the Turks and Caicos to pay bribes to former Haitian President Jean-Bertrand Aristide.

While neither of these UBS executives have been directly implicated in the tax scandal, both might reasonably be questioned about precisely what the rest of UBS in the States knew about the Swiss program, what it implies for US tax policy, and whether those who complain about UBS's knowing facilitation of tax fraud are just whining.

The Cases: This crowded docket, combined with the UBS mea culpa, almost distracted us from the sordid details of the Levin Committee's actual findings.

UBS: UBS opened its first American branch in 1939, and for all we know, has likely been facilitating tax fraud ever since, but the Senate investigation focused only on 2000 to 2007. During this period, even as UBS was sharply expanding its onshore US operations by acquiring Paine Webber, expanding in investment and retail banking, it also mounted a top-secret effort to recruit wealthy Americans, spirit their money to Switzerland and other havens and conceal their assets from the IRS.

This program, aimed at people with a net worth of $40 million to $50 million each, was staffed by fifty to eighty senior calling officers and 1,000 client advisors. Based in Zurich, Geneva, and Lugano, each officer made two to ten surreptitious trips per year to the United States, calling on thirty to forty existing clients per visit and trying to recruit new ones by attending HNW (high net worth) watering holes like Miami's Art Basel and the UBS Regatta in Newport. By 2007, this program had garnered 20,000 American clients, with offshore assets at UBS alone worth $20 billion.

To achieve these results, UBS established an elaborate formal training program, which coached bankers on how to avoid surveillance by US customs and law enforcement, falsify visas, encrypt communications, secretly move money in and out of the country and market security products even without broker/dealer licenses.

Meanwhile, back in 2001, UBS had signed a formal "qualified intermediary" agreement with the US Treasury. Under this program, it agreed either to withhold taxes against American clients who had Swiss accounts and owned US stocks, or disclose their identities. However, when UBS's American clients refused to go along with these arrangements, the bank just caved in and lied to the US government. Eventually, it concealed 19,000 such clients, partly by helping to form hundreds of offshore companies. This cost the US Treasury an estimated $200 million per year in lost taxes.

In early July 2008, a US court approved a "John Doe" subpoena for UBS, demanding the identities of these 19,000 undisclosed clients. However, as of last week's Senate hearing, UBS has refused to disclose them. While it maintains that it is no longer accepting new Swiss accounts from Americans, it is also insisting on the distinction between "tax fraud" and "tax evasion," reserving full disclosure only for cases involving criminal tax fraud, which is much harder to prove under Swiss law. This means it may be difficult to ever know whether it has kept its commitments.

Ultimately UBS got caught, not by virtue of diligent law enforcement, much less the Senate's investigation, but by sheer accident. In late June, Bradley Birkenfeld, a senior private banker who'd worked with UBS from 2001 until late 2005 out of Switzerland, and then continued to service the same clients from Miami, pleaded guilty to helping dozens of wealthy American clients launder money. His name surfaced when his largest client, Igor Olenicoff, a Russian émigré property developer from Southern California, was accidentally discovered by the IRS to be reporting much less income tax than he needed to justify his $1.6 billion measurement on the Forbes 400 list of billionaires.

With Birkenfeld's help, Olenicoff succeeded in parking several hundred million dollars' of unreported assets offshore--including millions in accounts controlled by a Bahamian company that he said had been set by former Russian Premier Boris Yeltsin. Ultimately, Olenicoff settled with the IRS for $52 million in back taxes, one of the largest tax evasion cases in Southern California history, and also agreed to repatriate $346 million from Switzerland and Liechtenstein. In theory he faced up to three years of jail time, but--following standard US practice of going easy on big-ticket tax evaders who have no "priors"--he received only two years probation and three weeks of community service.

As noted, Olenicoff also gave up his UBS private bankers, including Birkenfeld, who plead guilty in June to facilitating tax fraud and is now awaiting sentencing--the first US prosecution of a foreign private banker in history. It was Birkenfeld's revelations, in turn, that led to the disclosure of UBS' program for wealthy Americans, and at least one-half of the Senate investigation.

The most important point is that this entire program would clearly have been impossible without the knowledge and approval of the bank's most senior officials in Switzerland, and probably some senior US executives as well -- although the committee did not press this point. As former UBS CEO Peter Wuffli once said, "A company is only as ethical as its people." From this standpoint, we have reason to be concerned that UBS's behavior may repeat itself, so long as so many of these same senior executives remain in place.

LGT: For all its pretensions to nobility, Liechtenstein is well-known in the trade as the "place for money with the stains that won't come out," a flexible jurisdiction whose "trusts" and "foundations" are basic necessities for everyone from Colombian drug lords and the Saudi royals to the Suhartos, Marcoses, Russian oligarchs and Sicilian mafia.

As detailed by the Senate investigation, LGT Group has certainly lived up to this reputation in the US market. It maintained a program that was, if anything, even more sophisticated and discreet than that of UBS for large fortunes. Among its specialties: setting up conduit companies in bland places like Canada, allowing clients to transfer money without attracting attention; leaving the designation of "beneficiaries" up to corporations controlled by potential beneficiaries themselves, a neat way of avoiding "know your customer" rules; rarely visiting clients at home, let alone mailing, e-mailing or phoning them, certainly never from a Liechtenstein post office, Internet address or area code; shifting the names of trust beneficiaries to very old folks just before death to make it look like a repatriation of capital was an inheritance.

In terms of precise trade craft, indeed, LGT had it all over UBS. It only really got caught red-handed when it tried to modernize and trusted Heinrich Kieber, a fellow citizen and IT expert ,who turned out to be either a valiant whistleblower, a well-paid extortionist (he was paid $7.5 million by the German IRS alone for his DVDs), or both.

Implications: So what do we learn from all this? Many will consider these revelations shocking. After all, just as the US government is facing a $500 billion deficit, millions of Americans are fighting to save their homes, cars and college educations from the consequences of predatory lending, and inequalities of wealth and income are greater than at any time since the late 1920s, we learn that for decades, the world's largest banks have been helping wealthy Americans steal billions in tax revenues from the rest of us. At the very least, this suggests that it may be time to put the issue of big-ticket tax evasion, offshore and on, back on the front burner. But we also need historical perspective. Those who have studied this subject for decades also realize that achieving reform in this arena is not a matter of a few criminal prosecutions. It is a continuous game, requiring persistence and constant adaptations to the opponents, because we are playing against some of the world's most powerful vested interests, with huge fortunes at stake.

After all, offshore tax evasion by wealthy Americans is hardly new. For example, in May 1937, Treasury Secretary Henry Morgenthau Jr. wrote a lengthy letter to Franklin Delano Roosevelt, explaining why tax revenues had failed to meet his expectations despite a sharp rise in tax rates. Some rich folks didn't mind paying up, given the hard times so many Americans were facing during the Depression. As Edward Filene, the Boston department store magnate, famously remarked, "Why shouldn't the American people take half their money from me? I took all of it from them." However, according to Morgenthau, many other rich people busied themselves inventing new ways to dodge taxes, notably by secreting funds offshore in brand new havens like the Bahamas, Panama and... Newfoundland!

Scroll forward to the Castle Bank and Trust case of the early 1970s, when another IRS investigation of offshore banking disclosed a list of several hundred wealthy Americans who'd set up trusts in the Bahamas and Cayman Islands. Just as the investigation was picking up steam and the names were about to be publicized, a new IRS Commissioner came in and shut it down--officially because the otherwise-lawless Nixon Administration suddenly got concerned about due process. Few names on the list--a copy of which appears in my forthcoming book, Pirate Bankers, were ever investigated.

Scroll forward now to the late 1990s, when the Organization for Economic Cooperation and Development (OECD), the European Union and the US Treasury once again became excited about offshore tax havens. As the EU launched its "savings tax directive" on cross-border interest, a Cayman banker surfaced to report that more than 95 percent of his nearly 2,000 clients were Americans, and the IRS discovered 1 million to 2 million Americans using credit cards from offshore banks. Meanwhile, the OECD's favorite tool became the "blacklist." A list of thirty-five to forty "havens" was evaluated on the basis of abstract criteria like the quality of anti-money laundering programs and the willingness to negotiate information sharing agreements.

Unfortunately this "name and shame" approach didn't have much success. First, the OECD had no success against jurisdictions like Monaco, Andorra and Liechtenstein that are basically shameless. Second, the OECD's definition of "haven" was highly selective. It omitted many emerging havens like Dubai, the Malaysian island of Labuan, Estonia, Singapore and Denmark, whose importance has recently increased. As we'll see, it also ignored the role of major onshore havens like London and New York, which have been very attractive to the world's non-resident rich, especially from the developing world.

Third, blacklisting havens focused on the wrong dimension. As Senator Levin's hearing has underscored, the real problem is a global pirate banking industry that cuts across individual havens, and includes many of our largest, most influential commercial and investment banks, hedge funds, law firms and accounting firms. From their standpoint, it doesn't much matter whether a particular haven survives, so long as others turn up to take their place in providing anonymity, security and low-tax returns. Up to now, despite blacklisting, the supply of new tax-haven vehicles has been very elastic.

On the other hand, as the UBS and LGT cases show, the dominant players in global private banking are relatively stable institutions--which makes sense, given their clients' need for stable sanctuaries. This suggests that it makes more sense to focus on regulating institutions than regulating or blacklisting physical places.

Until the UBS case, this seemed to be much more difficult than, say, beating up on some tiny and distant sultry island for shady people. Even now, after the Birkenfeld case supplied the first private banker prosecution, we have yet to see the first criminal prosecution of a top-tier private bank--apart from BCCI in the early 1990s, which had already failed and was hardly top-tier.

This is not because of a shortage of despicable behavior. For example, UBS, like most of its competitors in global private banking, has a long history of engaging in perfidious behavior, apologizing for it and then turning back to the future. This includes UBS's involvement in South Africa's apartheid debt and the accounts scandals of the 1980 involving the Marcos family; Benazir Bhutto, Mobutu Sese Seko, Holocaust victims and Nigerian dictator Sani Abacha of the 1990s; the 2001 Enron bankruptcy and the Menem scandal; the 2003 Parmalat scandal; the 2004-2006 Iran/Cuba/Saddam funds transfers scandal, for which it was fined $100 million by the Federal Reserve; the 2008 Massachusetts securities fraud case; and now the Birkenfeld matter. Furthermore, as the committee report noted, UBS has a history of violating even its own policies. From this angle, unapologetic LGT is at least not hypocritical.

It is also well to remember that UBS and LGT are hardly the only global private banks involved in recruiting wealthy clients to move money offshore. The committee report indicates a long list of other banks that also provided offshore services to American clients involved in the UBS and LGT cases--including Citibank (Swiss), HSBC, Barclays (Birkenfeld's original employer), Credit Suisse, Lloyds TSB, Standard Chartered, Banque du Gotthard, Centrum, Bank Jacob Safra and Bank of Montreal. In addition, there are dozens of other non-US and US banks that are also active in the offshore US private banking market. This suggests the shortcomings of a case-by-case prosecutorial approach, and the value of designing regulations to improve behavior and provide ongoing feedback about taxpayer compliance.

In principle, one can imagine many such improvements in regulation, assuming a compliant Congress. For example, as proposed in the Stop Haven Abuses Act, introduced in 2006 and revised in February 2007 by Senators Levin, Coleman and Obama, there would be a rebuttable presumption that offshore shell corporations and trusts are owned by those who establish them. This would eliminate the "Q.I. rule" exception, which allowed hundreds of UBS clients to avoid reporting to the IRS simply by moving their assets to into shell companies.

We could also institute many other changes, including an increase in the painfully short three-year statute of limitations for investigating and proposing changes in offshore tax liabilities; tightening up on anti-money laundering legislation; levying withholding taxes against hedge funds; raising the penalties for abusive tax shelters, and requiring banks that open offshore entities for US clients to report them to the US Treasury.

Key Tasks: However, most of these proposed rule changes have the flavor of stopgaps, technical gimmicks that are still far too focused on individual taxpayers rather than the private banking industry--the advisers, enablers and systems operators. If we're right that this industry had become an unregulated, untaxed black hole--a multibillion-dollar global "bad"--we need to focus on two key tasks.

The first is to create appropriate incentives for the global private banking industry to do the right thing. We need to find ways to tax the behavior of tax-evading institutions, their CEOs, senior managers and even shareholders, to punish them for more misbehavior, and perhaps also reward them for bringing the money home with a brief one-time tax amnesty. In the short run, there have to be more Bradley Birkenfelds, more exposés, and more penalties for banks and bankers alike. Mere apologies, however heartfelt, should not be enough.

The second challenge is to organize a global alliance around this issue. This is more difficult, although steps are already being taken. Global organizations like Tax Justice International, Oxfam GB, Friends of the Earth, Global Witness and Christian Aid are converging on a new global campaign around the issue of havens and offshore tax evasion. They've been enlisting support for this effort from countries like Norway, Chile, Brazil, Spain and France, organizations like the UNDP, the World Bank and even the International Monetary Fund.

This is very exciting, but the organizers face one critical problem--the fact there are serious conflicts of interest among developed and developing countries. The fact is that the United States, the UK and other developed countries not only lose tax revenue to haven banking; they also profit from it, because their own banks are so deeply engaged in it, especially when it involves developing countries.

Back in April 1986, this author broke the story that Citibank was actually taking far more capital out of Latin America and other developing countries than it was lending to them, despite its reputation as the largest Third World lender. Indeed, the business of helping Third World elites decapitalize their own countries had become so large and lucrative that Citi's private banking group was the bank's single most profitable division.

To achieve that feat, Citigroup resorted to skullduggery and the flouting of local laws all over the planet. This included repeatedly sending teams of private bankers undercover to countries like Brazil, Argentina, and Venezuela; helping to set up thousands of shell companies and bank accounts in offshore havens and secretly transferring funds to them; teaching its clients money-laundering tricks like mis-invoicing and back-to-back loans; designing ways to communicate with clients that kept their financial secrets safe; and overall, concealing vast sums of flight capital from Third World tax authorities (and their competitors), while lobbying Congress to insure that any foreign capital that arrived in the United States enjoyed near-zero taxes and near-Swiss secrecy. For a time the resulting tax breaks and lax banking rules that applied to "nonresident aliens" from other countries made the United States, in effect, one of the world's largest tax havens.

In short, from the 1970s to the 1990s, banks like Citigroup, BankAmerica and JP Morgan Chase (and UBS, Credit Suisse, RBS, Paribas and Barclays etc.) were behaving throughout the Third World just as badly as UBS has recently been behaving here. And their very success laid the foundations for the global private-haven banking industry with which the IRS is now struggling.

At the time, it seemed that their behavior was hurtful mainly to the developing world, which wasn't strong enough to hold Senate hearings and put Citibankers in jail. But lately it has become clear that the system has grown large enough to consume its creators.

In the last thirty years, fueled by the globalization of financial services, lousy lending, capital flight and mind-boggling corruption, a relatively small number of major banks, law firms, accounting firms, asset managers, insurance companies and hedge funds have come to launder and conceal at least $10 trillion to $15 trillion of private untaxed anonymous cross-border wealth.

Rich people the world over, including tens of thousands of wealthy Americans, are now free to opt in to this sophisticated, secretive, utterly unprincipled global private banking industry. They can become, in effect, residents of nowhere for tax purposes, citizens of a brave new virtual country, which offers its inhabitants unprecedented freedom from the taxes, regulations and moral restraints that the rest of us take for granted. They wield enormous political influence even without paying taxes, merely by making contributions, threatening to withhold them--or better yet, threatening to abscond with their capital unless certain conditions are met. In a sense, this is the ultimate libertarian pipe dream: representation without taxation. But it is a nightmare for the rest of us, and we must design and organize our way around it.

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About James S. Henry
James S. Henry is a New York-based investigative journalist who has written widely on the problems of tax havens, debt, and development. His most recent book, The Blood Bankers (Basic Books, 2005), examined where the money went that was loaned to eight developing nations. His forthcoming book, Pirate Bankers (2009), examines the history and structure of the global private banking industry. more...





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hello beemoe,

very intersting article.thanks.

now when there is economic crisis it is the time for the mafias to get their money into the financial system.

"you want money to save your bank/company? take...." than in few years the police won't able to do the them nothing,because if they will seize the money, the bank/company will fall again.

now some limits will be lower, the monitor and supervision will be lower because the financial system need money and it doesn't matter where the money came from.


money laundering haven.

Hey X: sorry I haven`t been around I`m in the process of moving back to L.A. Anyway you`re soooooooo right this is a good time to be a white-collar / financial criminal......The situation(s) in the financial markets are tailor-made for a killing but the "mafias" won`t neccesarily make the big killing in this situation but the financial criminals and business/ finance people wiil make it! They are the ones who really know to profit from the system. I`ve said this before and maybe you can understand it better but the white-collar criminals operate far beyond the realms of the gangsters (read: blue collar criminals). Look at what happened to Mike Millken he stole well over a billion and he only did a year and a half in prision, whereas John Gotti and Larry Hoover did or doing life time bids!

Most of the gangsters really don`t know enough about finance / business and real estate to make the big profits like the finance people do. After all if they did they wouldn`t be in gangsterism in the first place.

Check out how Tom Renyi and Bruce Rappaport used Semion Mogilevitch to do their dirty work. Mogilevitch is wanted by Interpol but not Renyi and Rappaport.

interesting post, but in many countries (Japan,Russia, China,Colombia,Italy) the tradititional oc groups are infiltrated in politics and major companies. In the US its different i guess...

I mean politics and major companies are infiltrated by traditional oc groups

I agree...

'US dominance is over' - Medvedev
Russian President Dmitry Medvedev has said that the era of US global economic dominance is over.

Speaking after talks with German Chancellor Angela Merkel in St Petersburg, Mr Medvedev said the world needed a "more just" financial system.

Mrs Merkel's visit is seen as an attempt to ease tensions between Moscow and the West over the war in Georgia.

Germany is seen as Russia's close ally in Europe but Mrs Merkel has criticised Moscow's actions in Georgia in August.

However, she has urged the West to maintain a dialogue with the Kremlin.

The talks come a day after European Union observers began patrolling in Georgia to oversee a withdrawal of Russian forces from "buffer zones" around Georgia's breakaway regions of South Ossetia and Abkhazia.

Russia has kept troops there since ousting Georgian forces in August. It has promised to complete its troop pull-out by 10 October, but it plans to keep thousands of troops in the breakaway regions.

Booming trade

In St Petersburg, Mrs Merkel and Mr Medvedev were also expected to discuss how to boost growing bilateral trade.

The Russians want German technology, while the Germans seek access to Russian markets, the BBC's Steve Rosenberg in Berlin says.

Some 40% of the natural gas Germany imports comes from Russia, and the two countries are now building a pipeline under the Baltic Sea to bring Siberian gas to Europe.

Many German business leaders believe their future depends on good relations with Russia, our correspondent says.

He says Berlin does not want its good links with Moscow to be broken now by a new stand-off.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/europe/7647729.stm

Published: 2008/10/02 11:01:49 GMT

To Hollander: Not really different even in places like Colombia, Japan and Italy the ruling class has way more power than the gangsters. A perfect example Provenzano goes to prison as soon as his political protectors left office. The same in Japan, the Tsutsumis, Mitsuis, Mitsubishis and Yamatos (the Royal Family) are far more powerful than the gangsters. They allowed Sassakawa to be their medium between the upperworld and underworld. Even Colombia the very-rich hired the narcos to do their dirty work.

In order for the gangsters to exist they have to pay! Check out how much Pallozzlo pays the ANC!

Thanks for your response i agree with you in China they call it UMBRELLAS. But in the US and other Western countries the underworld is multi-ethnic...

Even in China......The government is far more powerful than the Triads. I get a big laugh everytime I read on this forum where a group of gangsters are running some major industrialized / informationalized country. The gangsters are actually trying to do what the governments and the rich are doing.

Even Charlie Luciano and Larry Hoover wanted too go legit because it was way more profitiable. But couldn`t because they were to tied to the underworld.

What I want to do is create a forum where we could discuss financial independence as well as the crime that goes with it. You can`t really do those things on most of the forums because financial independence runs counter to how most people think.

beemoe how are you my friend?

do you read about the huge money laundering in lugano? (it was published 2 days ago- camorra topic) .

it is only 1 billion $ case....in these days much more serious cases are happaning as i can imagine

Hi X: No I didn`t read about Lugano. It sounds like my thang. You`re right there are many interesting things happening in the finance world. I`m working on how can I take advantage of all of this chaos. Who says a little financial meltdown is bad! I`m working on reverse mergers and private placements.

But things have changed since Luciano Those old-time gangsters are gone..

Guys like camorraboss Sandokan see themselves as a Napoleon or Patton not Donald Trump...

Larry Hoover is very much alive! He`s in Colorado Supermax. They may see themselves as Napoleon but the governments they deal with are far more powerful. The government of China can wipe those gangsters out anytime they want. Big businesspeople have access to the politicians, they can hire Delta Force operatives anytime they want!

Governments and businesspeople act in unison. That`s how capitalism operates. If that equation gets out of equillibrium then the financiers leave. Look at Fidel Castro`s Cuba. He needs the financiers but can`t get enough of them to finance his operations.

Yes the US Government and 'civiliized' european countries, but in the balkans, southern russia, southern italy and many countries around the world (mexico,japan) are at least for a part under control of underworld powers...