Saturday, September 19, 2009

"Another $100 Billion in Bearer Bonds Seized on Italian Border?"

"Another $100 Billion in Bearer Bonds Seized on Italian Border?"
by Sonia Sirletti and Elisa Martinuzzi

"The U.S. Secret Service is examining more than $100 billion of U.S. government bonds confiscated in northern Italy in August, just two months after $134 billion of allegedly fake securities were seized in a nearby town. The Secret Service is analyzing whether the bonds taken in August may be counterfeit, said a spokeswoman for the U.S. embassy in Rome. Italy's financial police in Varese, north of Milan, arrested two individuals carrying the securities in a briefcase, according to a person involved in the case.

The two men currently are in custody as prosecutors in the town of Busto Arsizio carry out their investigation, the person said. The seized notes include securities with face values of $500 million and $1 billion, Italian daily MF reported today, without saying where it got the information. "There must be a well-organized group behind these alleged crimes," Fabio Polimeni, a Milan lawyer specializing in counterfeiting cases, said.

Italian authorities seized U.S. treasuries on June 4 with a face value of more than $134 billion from two Japanese travelers attempting to cross into Switzerland.* The two men later disappeared and the case is still under investigation. The U.S. government bonds found in the false bottom of a suitcase carried by the men were fake, a U.S. Treasury spokesman said June 18.

"As financial markets become more sophisticated, creative and bigger, we can expect criminal activity to go with it and it's happening everywhere," Livia Oglio, a Milan lawyer, said. "The amount seized is phenomenal." Since the beginning of the year the police at border stations in Italy have seized 1.7 million euros of genuine money and bonds, and have confiscated more than 100 million euros of bonds that have been determined to be false, according to an Italian finance police statement in July."
To contact the reporter on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net
* The story of the earlier seizure is here:
http://coyoteprime-runningcauseicantfly.blogspot.com/2009/06/karl-denninger-1345-billion-bearer.html

Karl Denninger: "You're not going to walk into a bank with $130 billion in bearer bonds and cash them. Nor are you going to sell a bond with a $500 million face value to someone without them authenticating it. They will be authenticated before you get one dime out of them - no matter who you think you're going to "give" them to. So if they're fakes and you're "just screwing around", there is no reason to hide them. Nor is there any particular reason to have authentic and recent original bank documents in your luggage with them, as has been reported.

Next, unless someone knew you were smuggling them, why would you be subject to that sort of search? What made the people involved "interesting" to the authorities? This doesn't sound like a random stop to me; how many people are carrying $130 billion in bearer bonds at any given point in time? No, someone was tipped off that this was happening. Now why would you bother to stop them here, prior to their attempted delivery of such instruments, if they were fake?"
- http://market-ticker.denninger.net/archives/1119-The-Saga-Of-The-Bearer-Bonds.html

Real bearer bonds must be authenticated before they're cashed in. Why smuggle fakes that are worthless? So the question then becomes, who has the capacity to acquire $100 billion in bearer bonds? And why smuggle them, instead of processing them on the open market?

2 comments:

  1. Could someone be "feathering a nest" for possible retreat when TSHTF?
    YeOldFurt

    ReplyDelete
  2. Must be one hell of a nest, YeOldFurt, don't you think?
    This whole thing is so odd...

    Thanks for stopping by!

    ReplyDelete