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Making the Truth Illegal – revisited

“Making the Truth Illegal” is the title of the only post I have ever removed from this blog.

I removed it because I was threatened with legal consequences if I did not. (Plus, I would like to add, some of the way I had written the blog post was stupid and could have hurt someone who had helped me.)

The post concerned an article I had written for a division of Thomson Reuters which they decided they could not/would not publish.  The division of Thomson Reuters pulled the article because they and I had been threatened, by a major European Bank, with legal consequences if they did not. The title of the article was “Cyprus, Magnitsky and the truth about Money Laundering.”

Although I cannot publish the article I can show you how it began and tell you how it is, that the truth it contained was made illegal.

The article began:

Money laundering is the life blood of organized crime. Without it crime would simply not pay.  But who does the laundering? The easy and obvious answer is criminals. But that is completely wrong and is at the root of our inability to stop it.

Criminals are the people who need money laundering. They are the clients. But they do not, themselves, know how to launder money. The only people who do know, and who are in positions to do it, are those whose day jobs are the many professional services which make up laundering: the accountants, lawyers, company registration and management agents, account managers in banks and company directors in companies that have no reason to be, other than to pass hot money through an endless spin cycle. In organized crime, criminals provide the crime but professionals provide the organization.

Of course we could get jesuitical about it and say, but those professionals who launder are criminals. Which would be fine, except that we do not treat them as criminals. Criminals break laws. Professionals do not, they have ‘failures of compliance’. One is considered an active, purposeful ‘doing’ of something, for which punishment is de rigeur.  The other is excused as an unfortunate and unintentional ‘not doing’; an oversight, omisssion or failure to do, for which one and one’s employer get admonished to ‘do’ better. And as long as you promise you will, all is considered fine and finished. There may be a small fine but nothing to lose your bonus over. No one senior ever goes to gaol.

Criminals are investigated – by police. Professionals are ‘regulated’ – usually, and rather conveniently, by themselves or colleagues. People who rob banks have legal problems. People in banks, who rob people, or help others to rob them by laundering their money for them, they have regulatory issues. One is serious the other is a joke. How many bankers actually went to prison from Wachovia or Citi or HSBC?

All this might seem rather sweeping. But it is not. It is just that usually we do not get to hear about the people and businesses who do the actual laundering nor what happens to them afterwards. When money laundering is reported it is usually the lurid details of the clients of the money laundering, the drug cartels and terrorist organization, who get all the headlines. Hardly ever do we hear of the launderers themselves. And that is because, as already noted, they are never ‘guilty’ of having ‘done’ anything. But events in Cyprus have recently given us a rare opportunity to lift the sewer’s cover, peer inside and see at least some of the people who failed to act; who by omission, oversight, laziness or complicity, intentionally or otherwise, ‘helped’ to launder money.

As the philosopher Edmund Burke famously noted, “All that is necessary for the triumph of evil is that good men do nothing”.

As you can see the purpose of the article was not simply to prove, what everyone already knew, that Cyprus had indeed been laundering dirty Russian money, but to say something about WHO actually does the laundering. The point was to finger the launderers themselves not their clients.  Of course that meant naming companies, lawyers, company directors, company registration agents, and last but not least, the banks and individuals in them. These are, of course, people who are not used to the idea that they can be named, take grave exception to being named and who have the power, I discovered, to make sure they are not.

The article also did one further thing. When you added it all together and told the whole tale in all its detail, with all the names, dates, places and amounts, one further conclusion jumped out.  The lawyers, accountants, company directors and bankers, who did the laundering, are also the people who the anti money-laundering system relies upon to police the system and stop the laundering. The inescapable conclusion is that the anti-money laundering system not only does not work, but seems expressly fashioned to make sure it does not work.

It is possible – it happened in the Magnitsky case – for a criminal to buy a bank and be granted a bank license. Yet the law says it is the directors of such a bank who will be relied upon to contact the authorities about suspicious transactions. Criminals don’t often turn themselves in, yet in every country this is the non-system our leaders and financial experts maintain. In the UK the law is set up so that a company can be set up without any due diligence at all being done to determine the character let alone the actual identity of the owner. Because of this ‘loophole’ as the authorities coyly refer to it,  the UK is home to tens of thousands of shell companies set up by criminals and used for criminal purposes. This may sound like a fantastic charge and one I cannot possibly substantiate. Yet almost every major case of fraud or money laundering will involve UK shell companies. Follow the Magnitsky money and you will see it pass thorough UK shell companies. The same goes for the $64 billion of state money stolen from Kyrgyzstan much of it then passed through UK shell companies. Or the  on-going case of money laundered out of Ukraine by means of a fake oil rig purchase. That money too passed through UK companies.

I could give you plenty of other examples but the important point is that NO ONE in authority can offer a shred of evidence to show that I am wrong no matter how many criminal companies I claim there are likely to be, for one simple reason. THEY HAVE NO IDEA WHO OWNS THE COMPANIES. The system is set up so no one knows. Companies register owners but they can be other companies in other jurisdictions. And it is easy to set up a company in such a way so that no one checks on the owner at all, ever. That is the system we maintain.

Every minister who has ever had the power to change this state of affairs has been aware of this but they have all chosen to leave it that way.

In short we have a system which is conveniently designed so it does not stop money laundering but does make sure no one will be prosecuted. It serves to shield the guilty not stop them.

I realize these are statements that can still be dismissed as ‘conspiracy’. Without the 8000 words of detail the article contained, without the references to over a hundred pages of bank transfers and company records, I am left with just what I know to be the case without being able to show you what convinced me.

All I can do, as promised, is show you the final ‘shell’ which surrounds everything else and which allows the rest of the corrupt system to exist and do its job. The last shell is a legal one and I had not understood its importance, nor its power, until it did its job and stopped me publishing.

This is how it works.

First a few facts. In the Magnitsky case  $230 million was stolen from the Russian state. That money was then laundered  in a scheme that involved five deaths, a lorry load of bank records that exploded, eight banks, numerous shell companies and complete, abject and total regulatory failure. It is called the Magnitsky case after Sergei Magnitsky who was found dead, handcuffed on the floor of a cell in a Russian prison. His body, photographed at the time, was covered in bruises.

Mr Magnitsky had been arrested and then held without charge or trial in the custody of the Russian Interior Ministry for nearly a year. He had been detained shortly after he had named in official testimony Interior Ministry officials and certain tax officials as the criminals behind the theft. The men he named were the ones who arranged his detention.

BUT, the Interior Ministry held its own investigation. What it found was that although the money had indeed ‘gone missing’, none of the officials Mr Magnitsky had named were, according to their official investigation, guilty of anything other than being ‘tricked’ by person or persons unknown. The Ministry did try to suggest several culprits but two of them died mysteriously of heart attacks a thousand kilometres from their homes before they could testify, while another had, rather embarrassingly, died before the crime he was accused of  had even been committed. The Ministry looked silly even by Russian standards and no case was brought.

Eventually the Russian officials accused the deceased Mr Magnitsky of being the mastermind behind the crime he had been investigating. At one point the Russian state said it was going to put him on trial posthumously. So far it has not. And thus the case rests with the conclusion that there was no crime, only a ‘trick’ with no one found guilty.

It was also decided in Mr Magnitsky’s absence that despite the photographic evidence of his beaten body, he had died of natural causes and no crime had been committed there either. Case closed. And that ‘Case closed’ is what it is all about.

In the end it doesn’t matter what actually happened nor what evidence is to hand. As long as some official body does its own ‘investigation’ from which it concludes nothing happened, then nothing did, and the  case can be closed. Not only that but if anyone should try to look for themselves at the evidence they cannot refer to anyone or any bank as being involved in criminal behaviour of any kind. Because there wasn’t any.

If no money was stolen – and none was because the Russian said so – then no one could have laundered any. How can you launder money that was not stolen?

The Russian decision meant, in legal parlance, that there was no ‘predicate’ crime – no crime from which other crimes followed. Which means, if one authority says there was no crime, every other authority in every other country, should it want to, can point to this judgment and say, ‘why should we investigate anything if there was no crime in the first place?’

This meant when an official complaint was sent to the Cypriot authorities in 2008 alerting them to the Magnitsky affair, right at its beginning, they could ignore it. And they did. The Cypriot police were sent an official complaint in 2008, and to this day they have never replied to it nor even questioned the people, even Cypriot people, named in it.

In fact even when the Cypriot Authorities were sent another much more detailed complaint in 2012, which gave them dozens of leads and lines of enquiry they wrote back saying,

“…it is important that we firstly obtain information from the Russian authorities about the predicate offence or offences committed in Russia.

Thus we plan to contact the Russian authorities in order to obtain information…”

And of course there was no predicate crime. Not officially. Even though companies were stolen and hundreds of millions did ‘go missing’.

Similarly, in 2010 another complaint was sent about the Magnitsky affair, this time to the Austrian authorities. The complaint alleged that the very large and powerful Austrian bank Raiffeisen, had handled much of the  money that had ‘gone missing’. The Austrian authorities opened an investigation which concluded Raiffeisen had done nothing wrong at all. Case closed.

The Russians found no crime had been committed on their patch. The Austrians found nothing on their patch either.

This is despite the fact that Raiffeisen did handle the money. But you see handling is NOT laundering. Laundering requires the money be illicit AND that Raiffeisen knew, or reasonably could have known, the money was illicit. And the Austrian regulator concluded that Raiffeisen could not have known there was anything wrong with either the money it was handling, nor the bank from which it came nor the owner of that bank. The owner we are talking about here  is the criminal – a convicted criminal who owned his own bank – mentioned earlier.  According to Raiffeisen and the Austrian regulator the criminal past of the owner of the bank Raiffeisen was doing business with, could not have been known till a later date.

Now I find this judgement to be difficult to understand since the man in question had been convicted in Russian court in 2006. There are court transcripts of his admission of guilt which I have read. Yet Raiffeisen was handling the money in question in 2008.

BUT it doesn’t matter if I or you find this odd. The only FACT that is important, is that the Austrian regulator looked and found Raiffeisen NOT guilty of any crime. And so they are innocent. Case closed.

This is how you can end up, as I did, compiling facts and dates, evidence of bank transfers subpoenaed in court, which lead you to a conclusion that you are nevertheless not allowed to make public. You can present all the evidence but you  must contrive to do it without ever mentioning the name of a crime, nor suggesting any illegal activity in the piece. And of course you certainly cannot conclude in writing what the evidence suggests. If you try to , as I found, you are threatened with the law.

And that is how you make the truth illegal.

If this was just one case it would be horrible but isolated. But it is not. This use of official and legal judgements to squash the truth is exactly what happened in the case of Jonathan Sugarman and UniCredit. He found evidence that UniCredit was very seriously breaking the law. He got an outside company to check and they agreed. The Irish regultor however,  said, ‘There’s nothing to see here move along’. And Jonathan was threatened with leagal action if he did not go quietly away and hide.

What does all this mean for money laundering?

Here is how I concluded the article I cannot publish.

People love to talk about the ‘risks to banks and companies’ from money laundering. What risks? Think of the notorious cases of money laundering before Magnitsky: Citi., Wachovia, HSBC. No one was gaoled. No one senior even lost their job. Fines are a joke. Wachovia, for example handled or laundered over $370 billion of dirty or suspect money out of Mexico. They were fined one two thousandth of that amount, just $160 million. As a percentage of the direct financial benefits accrued to Wachovia, from having the dirty money flowing through their books, fines for money laundering are vanishingly small and better thought of as a tip pressed into the palm of a compliant doorman.

In reality, simply looking at the facts of what it has cost the banks in gaol time, fines or even something as intangible as their standing with their regulators and governments, it is very much worth it to launder. As for ‘standing’ or reputation – being guilty of huge money laundering did no harm to Citi when it came to bailing them out. Nothing untoward has happened to Wachovia or HSBC. In short – on a cost benefit analysis I would say it is of huge benefit and virtually no risk, for any bank large enough to be able to launder money, to do so.

And what of all the many companies and professionals, the company agents, lawyers and accountants, who do the jobs which make up the bulk of the work of laundering? Are there any real risks for them? I would say there are few because our system simply does not investigate what they choose to do. Instead it is very careful to only ask them to fill out forms, to self regulate and to ‘comply’.

I think the questions we need to ask ourselves and our politicians is why is it that the financial world is ‘regulated ‘ while we, ordinary citizens, are policed? Why do they have regulations to observe, while we have laws to obey? Why are they asked to merely assess themselves  while we are investigated by officers of the law? Who profits from this careful double standard?

When you boil it all down, anti-money laundering is about asking criminals and the law abiding, both, to write reports about themselves. Needless to say the criminals lie. But we pretend not to notice, and so in every country all the paperwork says there is no money laundering going on. Yet hundreds of billions is laundered every year.


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46 Responses to Making the Truth Illegal – revisited

  1. Toni M April 7, 2013 at 6:41 pm #

    Over the last five years I’ve become obsessive about reading about control fraud, money laundering and the interaction of politics and crime, yet the detail and scope of this post still shocks and disturbs me. Worse yet there will be a huge chunk of people that accept it with a hand-wave that it is always likely to be so, and that it is the way of the world.

  2. The Dork of Cork. April 7, 2013 at 9:00 pm #

    People hold excess claims on wealth in these jurisdictions because the money was not spent……..
    “Lawful People” in Euroland get reduced wages over time.
    This happened in Ireland in a dramatic fashion the moment we left the Sterling peg in 1979.

    There was a immediate Euro Soviet push to increase productivity but keep wages static ……there was a deflation / mini depression , the banks began to eat the surplus created.
    After 1987 ~ the banks spit out the surplus via credit.
    Asset production / Junk production followed.
    People with reduced wages now cannot service the debt while operating in this Junk hinterland.

    What do people in these tax haven money claims really do ?

    Answer :
    They burn resources .
    Which means less resources for a person trapped in a former nation state to burn.

    They are farming us.
    The answer to the problem is not legalistic…………

    The banks own us , including most of the judges.
    Its even got to a stage where the IMF wants to replace the local judiciary of Ireland for a more compliant branch of governance.

    There is the proof if you need it.

    The answer is to dilute their “soverigin” claims over us by printing money the banks can’t legally leverage.
    The banks are a nothing without state law ,THEY NEED STATE SANCTION TO OPERATE.

    But the mechanism to break them is much more simple then many people imagine.

    However if one country breaks from the CB cartel it is likely to be bombed from 40,000 feet.

    Such is life or is it debt ?

    • phillwv April 8, 2013 at 3:11 am #

      Dear Dork

      Your terse footnotes are a considerable value-add to Golem’s alarming insights, for which I thank both.

      So a nod to your precise of ‘how the world works’ above – particularly ‘they are farming us’ which is (and it’s taken me a lifetime to see) my dawning assessment too. A mindless predatory process stalks the planet and we are part of the meal. It ends with a barren ruin and nothing can stop it.


    • Golem XIV April 8, 2013 at 10:30 am #

      Hello Dork,

      I agree that farming is the best term for what they are doing. They are an empire and they are farming us much like the Roman empire tax farmed its territories.

      Apart from anything else, in our present system of money being created by privae banks, money stuffed into those tax havens withdraws credit from the nations it is taken from ‘forcing’ the central banks in those nations to provide more ‘liquidity’ for their economies.

      The tax havens manipulatte economic policy for their benefit and our detriment.

      As for what would happen to a naion that tried to stand outside the CB system (the CB system tied to the BIS) I would suggest that we only need to look as far as Libya. The Libyan national bank wasn’t part of our system and had never sold debt to raise monay. It simply printed as a sovereign. The West always hated that fact. And that defiance was not an insigificant part of why the west decided to change the regime at teh time we did.

      Thanks for your comments. I second phillwv’s thanks and add my own.

      • averagejoe April 8, 2013 at 11:06 am #

        David, did Libya in effect have “Positive Money” then? If so, does that not demonstrate how much resistance we would have to introducing such a system?

        • Golem XIV April 8, 2013 at 11:15 am #

          I can’t say if they had the exact system Positive Money advocate. But they were not part of the BIS system and did not rely on selling debt to fund their expenditure. They printed.

          I can’t day if they had no sovereign debt. I suspect they had some. I also can’t say if they did or did not allow the banks to create sddeposits by lending – thus creating private bank ‘money/credit.

          Nevertheless your point still stands I think. What happened to Libya does, I think, give us an indication of what the rest of the current BIS/private money-creating bank sysytem would do to any naiton that tried to defect.

          But that doesn’t mean we shouldn’t nor that we could not succeed. In my opinion we desperately need a political movement and even a party which directly advocates breaking away from the present prvate bank contolled, money creation system.

          I think Positive Money/MMT is a very good start even though I don’t fully agree with everything they write.

          • Hawkeye April 8, 2013 at 12:54 pm #

            Written in 2006:

            “There are now only 5 nations on the world left without a Rothschild controlled central bank: Iran; North Korea; Sudan; Cuba; and Libya.”


            So make that 4 nations left on that list (although Sudan has recently split into two!), and the first 2 well within the sights of “regime change”.

          • guidoamm April 8, 2013 at 1:15 pm #

            One of the most successful instances of gaining independence from the central bank took place in the early 30s…. in Germany…

            Hijalmar Schacht, Hitler’s minister of the economy, instituted what is known as MEFO Bills (MEFO is an acronym).

            From a state of total and absolute isolation, devastation and abject poverty, from 1933 to 1939 Germany re-industrialized, entirely re-built its infrastructure and agriculture and leaped ahead of any other nation on the technology front to the point that they were making use of radio guided bombs operated by joysticks … joysticks.. from the cockpit of aircraft.

            Of course Hitler is an emotionally charged subject at the best of times but despite the sheer amount of literature that exists on the subject, few if anyone has ever asked the most important question. How did Hitler get the money to do what he did?

          • neretva April 8, 2013 at 5:26 pm #

            neither is Syria and Iran.

      • The Dork of Cork. April 8, 2013 at 2:53 pm #

        Thanks lads
        I have my moments I guess.

        Anyhow ,at least this crisis did one thing.
        It opened our eyes to this dark reality before we leave this world.

        Its not much of a consolation but……..

        “There is no life in the void – ONLY DEBT”


  3. Tony C. April 7, 2013 at 9:08 pm #

    Superb post. Thanks much for your continued efforts, and particularly in spite of the obvious pressures that you are under.

  4. Just me April 7, 2013 at 10:30 pm #

    Lex Luthor: Miss Teschmacher, when I was six years old my father said to me, “People are no damn good”.

    Of course there are good people, problem is, not enough to tip the scales towards a good world.

  5. Just me April 7, 2013 at 10:45 pm #

    “Truth Is Offensive”


  6. 24K April 8, 2013 at 12:31 am #

    Belly of the beast baby.

    Well played by the way.

  7. Pit H. April 8, 2013 at 1:37 am #

    Calling Raiffeisen Bank a major Austrian bank would be fair. Calling it a “major European bank” sounds like an euphemism, unless “major” refers to bad-debt charges, writing down its Ukraine unit, and plummeting shares. (Bloomberg news, 2013-01-31)

    • Golem XIV April 8, 2013 at 10:18 am #

      I take your point. Raiffeisen is not a global bank on the scale of others. It is not on the G-SIFI (Globally Systemically Important Financial Insitution) list.

      It is what I would call an N-SIFI (Nationally systemically…) The N-SIFI’s are those which are powerful and critical for the working of the nation they are in, even if they’re not gloablly critical. Raiffeisen is banker to two of Austria’s political parties – including one of the big two. Raiffeisen also owns many/most of the serious political magazines in Austria. Of course I am sure their editorial outlook and independence is completely unaffected.

      Since you mention Raiffeisen’s Ukraine unit I might add a detail I didn’t mention is the post above. Raiffeisen has also been accused of handling much of the money in the Kyrgyzstan case I linked to as well.

      • neretva April 8, 2013 at 5:45 pm #

        Anyway, Vienna used to be “city of spies” in Europe, now Austrian banks has become main laundering center, ex PM of Croatia is accused (and found guilty) for laundering money with Hypo Group Alpe Adria banks.

      • Pit H. April 9, 2013 at 4:00 am #

        Let me add that Raiffeisen (a branch of them) is a banker also to the major opposition party of Austria and has helped them, according to information from ‘well-informed sources’, to overcome their deep financial crisis after a split back in 2005 that was planned and directed by the notorious Jörg Haider. So if I may paraphrase what you said for magazines, I am sure their political outlook and independence is completely unaffected.

        • Golem XIV April 9, 2013 at 11:25 am #

          Interesting. Thank you.

          And welcome.

  8. Tom Kennedy April 8, 2013 at 8:34 am #

    Stunningly good article, Golem. Thank you.

  9. wikispooks April 8, 2013 at 9:16 am #

    Thanks for yet another deeply insightful post.

    Your point about banks being ‘regulated’ and the rest of us being policed is a telling one. My own view – FWIW – goes something like this:

    The nub of the matter is that the ‘globalising system’ we are dealing with here, is both occult (in its classic meaning) and criminal by design. It is simply not susceptible to reform that will render it non-occult and ‘law-abiding’. To become so would be to destroy the power of the most powerful and that – shades of Michael Corleone in Godfather 2 – they will use all their powers to prevent.

    The cases you cite are bad enough in and of themselves and well illustrate the nature of the problem. But Russia and its criminality are small beer and frankly pale to near insignificance when the global drugs and arms trades are factored in. Peter Dale Scott and others have clearly demonstrated that the so-called ‘war on drugs’ is nothing more than a vast control mechanism whose purpose is to ensure that the lions share of the profits accrue to precisely the people and institutions you identify. Those people and institutions are themselves well integrated with (and thus protected by) ‘Deep-State’ Intelligence Organisations whose quid pro quo, so-to-speak, is the covert financing required for their own very specialised dirty deeds.

    The fate of Rudolf Elmer is another salutary lesson in what anyone who, through honest endeavour, effectively challenges this globalised corrupt fraternity can expect by way of reward.

    I do not have any answers but, sad (almost despairingly) to say, I do know that urging politicians to ask certain questions is akin to asking your dog to fart against thunder.

  10. backwardsevolution April 8, 2013 at 10:20 am #

    Golem – excellent, excellent report! “BUT it doesn’t matter if I or you find this odd. The only FACT that is important, is that the Austrian regulator looked and found Raiffeisen NOT guilty of any crime. And so they are innocent. Case closed.”

    The regulator had two choices: find them not guilty – or – suffer a mysterious heart attack.

    Look at the case of financial statements:

    “… the accounts that the company puts together for the accountants (and keep in mind, management prepares financial statement, not accountants, not the auditors) are accurate. The auditors simply review them, and that’s an important point I always stress to my class. If there are games being played, and if you read the boilerplate of any auditor’s opinion, it says “we rely on the statements of management” – and so if, again, the people in the corporate suite have ethical flaws, we have a system based on truth-telling that may not be exactly always accurate. […]

    They asked these chief financial officers if they’ve ever been asked to falsify their financial statements by their superior. Now, the chief financial officer’s superior is the chief executive officer, or the chief operating officer—basically the boss. It was a stunning—of course anonymous – survey. 55 percent of the CFOs indicated they’d been asked, but did not do so. 12 percent admitted that they’d been asked and did so. And then 33 percent said they’d never been pressured to do that. In effect, only one third of the companies in the S&P’s 500 at that time did not have a CEO or COO try to pressure their financial officer to falsify financial results.”


  11. backwardsevolution April 8, 2013 at 10:29 am #

    This is a great report on who got out of Cyprus unscathed and who didn’t. Surprisingly, Eurozone banks (French and German) were the biggest winners.

    When you look at the excellent charts the fellow has made and follow the money, the Russians were not the big players.

    “Looking at the timeline, even as late as the end of 2011, when it was clear Greece would default and the banking regulator had to know the banks in Cyprus were doomed, the amount of Eurozone-bank derived deposits in Cyprus was over 20 billion euros, a good portion of which would be subject to massive losses if the Cyprus Template were to be applied at that moment.

    [Note that 20 billion euros was – at that time – the same size as the “Russian Mobster” Money.]

    But at that moment, as a result of the “collecting the spread” strategy, some big chunk of that money were likely in time deposits, unable to be withdrawn. That money couldn’t flee, not just yet.

    But as time passed, those Eurozone bank deposits were slowly reduced down to 10 billion euros, a reduction of 50%. Presumably, as the time deposits expired, the money was brought back to the fatherland.

    And then suddenly the President of Cyprus was informed he had 1 week to solve the banking situation that had been pending for more than a year.

    In looking at the movement of capital prior to the default, we can give a grade to each participant, as a result of their apparent ability to assess the the danger to their deposits.

    The clear winner: Eurozone Banks. Those guys were geniuses. They were the only participant to seriously reduce holdings prior to the default.”

    I first saw his post at The Automatic Earth, and he said:

    “It does indeed appear that there is an actual conspiracy here – one where a significant percentage of well-connected deposits were given time to flee prior to the denouement.

    In retrospect, it was very interesting how much talk there was initially about Russian Mobsters. I think they ended up being the useful distraction – and perhaps even the bag-holders. No mention was made of the hot money from the eurozone banks that had already left. I guess that would have spoiled the whole thing though.

    The Dog that Didn’t Bark, as it were.”


    • Golem XIV April 8, 2013 at 10:38 am #

      What an excellent article! Thank you for the link. It is the best fit I have read, for explaining the timing of when the problem everyone could see coming, suddenly became a crisis that Germany said had to be fixed – now. Really good insight.

      Thanks again.

    • McMike April 8, 2013 at 3:23 pm #

      I dunno; making bag-holders out of Russian mobsters seems like a risky proposition.

      Those fellas do not seem to have any qualms about reaching out and whacking people, whenever, wherever they can find them.

  12. Roger Lewis April 8, 2013 at 11:51 am #


    A great piece and shocking, so shocking.

    I wrote to a friend from 10 years back the other day.

    ´´I am in UK for first time in 3 years next month, for a friends wedding. That is if my passport renewal is here by then.

    Apart from Mikes Wedding I wouldn’t be bothering, I view the UK these days very much as a fascist gulag and will be establishing contacts with the escape committee to help people escape the Cameron, Clegg Osbourne, Milliband axis of evil.

    In all seriousness the corruption in British Politics and the dominance of the City has left me very anti UK, google MAx Kaiser / Plunderball or read my Friend David Malones Golem XIV blog to see where I am coming from.

    Sweden is a lot better but we’re all slowly headed over the same cliff i’m afraid, the economic system is terminally sick and without jailing the fraudulent bankers and politicians at the heart of it all things will continue to get worse.

    I have withdrawn from all participation in the system pending reform or the revolution, I am very supportive of Positive money.org and their monetary reform proposals, the mainstream media is pretty mute on the whole stinking mess the BBC among the worse culprits.

    I play a lot of music these days, I’m in a band with my partner and I also mess around a lot with computers and have started designing some electronics circuits. I have been heavily into studying philosophy for the past 3 years and with the children as well life is very full.
    I’m always an eternal optimist and very happy and as ever calling a spade a bloody shovel. Directness in Sweden is actually very common so I fit in pretty well.

    Our two are 7 and 3 and a half, best thing ever fatherhood, mind you Rasmus is grizzling right now and as you know thats the hardest thing in world to maintain any concentration through.

    Heres two videos of our band and me playing my favourite electric guitar.



    My friend wrote back,

    Just watched your videos- I wouldn’t have recognised you in a month of Sundays- they were great!

    It seems that you have such a different lifestyle than when you were ‘Mr Docklands’ – I can’t quite marry the two people up! Though it comes across that you are a very content person, which I never felt you were before- do you have any of the trappings from your old life, or have you rid yourself of it all?

    I love your passionate beliefs- you probably think the way that a lot of us do- but actually do something to try to create a change- which a lot of us don’t!

    I have started many such conversations, as I am sure we all have. We must start more.

    I encountered this Web site the other day


    If we take control of our own Lives and Take a leaf out of Penny Rimbauds book.

    ´´ There is no authority but your self´´

    David if you need to get away from some Heat theres a place here in Sweden , but of course Julian Assange ended up in the embassy of equador?

    Be safe mate.


  13. McMike April 8, 2013 at 3:45 pm #

    Criminal banks have always been a part of the system, a critical part. And criminals have always been an important part of the banking system.

    I have always find it odd that free market fundamentalists celebrate greed and deride regulation, but then have this invisible lines of taboo. To be consistent, we should celebrate drug dealers and arms merchants and kleptocrats and their money laundering. These are apex capitalists at play.

    Anyway, I have long been fascinated by the rogue banks – the Nugan Hand, the BCCI – because they seem to reveal what the rot looks like when taken to its natural extension. A caricature of banking; a grotesque version of the real face.

    Read “Crimes of Patriots” for a glimpse. The Nugan Hand bank was a conglomeration of CIA fronts, arms dealers, former spooks, corrupt government officials, and favored international criminals all pursuing a pyramid scheme of money laundering, self enrichment scams, and financing official covert ops. All under one roof; a full-service bank serving the needs of the blood-soaked and sociopathic intersection where the lines are blurred between official and underground, between legal and illegal, and between patriotic and pathological.

    About the time Nugan collapsed, BCCI sprung up. The CIA and drug cartels need a place to launder their money after all. The term full service bank is in fact the title of a book about BCCI.

    These were banks owned by crooks, used by crooks, and whose sole purpose was to launder money and siphon graft. Any pretense towards cover stories about being real banks were dropped or neglected, and so eventually the criminals overreached and the ponzi ran out of suckers.

    BCCI collapsed inevitably. But I have lost the thread there, I think maybe the game was changed. I think the graft and covert conduits were moved in-house into the massive banks as a covert departments of those major banks, rather than concentrated into fly by night bucket shop and pigeon drop banks as had been the practice before.

    That seems to be the model now, as now instead of banks you never heard of collapsing into piles of cons games and a few dead bodies, the money laundering revelations pass across our consciousness in stories about “rogue managers” in “reputable” banks like Citi and HSBS.

    I suppose also the 9/11 events forced a change in official tolerance for crime-clearing banks. Since in that case the clients turned on us and used our own crooked laundering system against us.

  14. John Doe April 8, 2013 at 9:40 pm #

    “Making the Truth Illegal” is the title of the only post I have ever removed from this blog.

    I removed it because I was threatened with legal consequences if I did not. (Plus, I would like to add, some of the way I had written the blog post was stupid and could have hurt someone who had helped me.)

    The post concerned an article I had written for Reuters which they decided they could not/would not publish. Reuters pulled the article because they and I had been threatened, by a major European Bank, with legal consequences if they did not. The title of the article was “Cyprus, Magnitsky and the truth about Money Laundering.”

    B.S. meeter going crazy.
    How could Reuters “pull”an article if they refused to print it in the 1st place?
    Then how does a “Major Bank”even know it exists if it won;t be published? You claiming they care what a blogger writes and somehow found your article online?
    Show us the legal document you received from said banks lawyers that proves what you claim.
    This is the age of Internet – send the original to to a few truther groups and let them spread it around.
    Your first paragraphs don’t make any sense and I think its BS.
    Nice try.

    • McMike April 8, 2013 at 10:00 pm #

      I don’t know about the sequence in this case, but it is a fact that news organizations routinely ask the subject of their reporting for comment, and occasionally will send them an advance copy of stories for their review. This gives the subjects ample time to try and get the story spiked, to threaten lawsuits, etc. It happens all the time.

      News outlets back down and self-censor an astonishing amount of the time when pressure comes from above in the organization, from advertisers, and from the powerful.

      If you want to understand the media, the first thing you need to do is learn about what they don’t do.

    • Golem XIV April 8, 2013 at 10:34 pm #

      I obviously didn’t make myself very clear. Sorry.

      Reuters asked me to write an article. I did. They were a week or so into editing it. A lengthy back and forth process. One part of the process was to send Raiffeisen the part in which they were named. This is to give them a ‘right of reply’. They replied with their denial and threat of legal action.

      This threat was seen by senior editorial people who informed my editor who informed me that the article would now not be published.

      As McMike says this sort of thing does happen.

      As for showing you the document I think I won’t do that. I really don’t like being called a liar. I also don’t like your aggressive and unpleasant tone. Feel free to conclude from this whatever you wish.

      I have no idea what a truther group is. Either you trust me based on my track record or you don’t. But to jump to the conclusion that I must be ‘trying it on’, without, it seems any knowlege of my track record seems a little rude.

      Plus, BS meters are handy things, but only if they’re working. I think you should get yours checked.

  15. ch-ch-changes April 9, 2013 at 1:08 am #

    In order to continue to pull off a big con, lots of little truths need to appear so that most people never question the bigger picture.

    In the case of money laundering, it’s worth noting how it works much further down the scale. As a director and signatory at a small number of SME companies, I have been involved in opening a number of accounts with various high street banks. The process has been the same for years – we have to turn up in person, with photo I.D. and current home utility bills and be verified by bank staff. This has happened when we’ve known the bank manager for years in some cases. Equally the bank staff at high street level are nervous they’ll lose their jobs if all the i’s aren’t dotted and t’s duly crossed – it’s the money laundering regs they say. And at high street level, they’re not making it up.

    It’s proven to be a very effective front thus far for the huge money laundering operations systematically performed at the top of the chain, way out of sight of us plebs.

  16. Glenn Condell April 9, 2013 at 9:37 am #

    Golem, great piece. I dips me lid, not just for the work you’ve done and the thoughtful if frightening conclusions you’ve drawn, but for the courage in pursuing it at all, especially after finding out what happened to others who proved inconvenient to TPTB earlier in the story. I think you are probably safer having tried to publish, and having written about why you couldn’t, than if you had sat on your hands after investigating and done nothing. You have left evidence on the information superhighway which cannot now be erased (well, even if it was it would remain in all the minds of all of us who have read it) This affords you a measure of protection you would not have had if you had done the digging but stayed mum. It turns out sunshine is not just the best disinfectant but also a decent prophylactic against elite revenge. Still, small planes and nightcaps in the homes of progressive young Swedish misses should probably be avoided for now.

    Having said that, it is sobering to consider that threats to truth-seekers like yourself are nowadays as likely (if not more likely) to come from the ‘launderers’ rather than the ‘clients’, and while this may initially take the form of legal injunctions and the use of power and influence to kill stories in the media, a genuine thorn would need more thorough pruning. This is where the growing nexus between finance capital and the state’s instruments of violence worries me. Increasingly the state is run by and for the launderers (or ‘savvy businessmen’) and we know about the CIA/Wall St moonlighting, the JP Morgan relationship with the NYPD, the collusion between the bankers and FBI/police in the Occupy crackdown etc – so what don’t we know about? The twin behemoths of Mammon and the State, always linked but separate, are merging into one.

    American taxpayers fund the whole massive clandestine network, with its off the books black ops and psy-ops, its surveillance and its drones. It has a few million staff with top secret security clearances – what are all those people doing? Are they protecting the interests of their citizens, or only a select few of them? It is not necessarily that they are all on board with the idea of harassing whistle-blowers, though the military/intel mindset, especially there, does tend toward wingnut territory; it is more that their ‘mission’ will have changed over time to redefine the threats they are supposed to deal with. Ie, if their hierarchy decides that people like you exposing the truth about financial skulduggery pose a threat to ‘financial stability, and therefore US economic well-being’ or indeed if the hypothetical nation that tried to act against rogue G-SIFIs was likewise acting against the interests of the US as defined by said hierarchy, then those involved would simply ‘do their job’, ‘no questions asked’, ‘I was just following orders’

    As wikispooks said: ‘Those people and institutions are themselves well integrated with (and thus protected by) ‘Deep-State’ Intelligence Organisations whose quid pro quo, so-to-speak, is the covert financing required for their own very specialised dirty deeds’

    We had a little chat about your being read by DoD, SEC etc in August last year, and I told you about John Ward’s experiences at the Slog blog:


    I should imagine there’d be some other acronyms involved as well, though they’d be better at covering their tracks. I guess if you choose to speak the truth to power, it is a ‘cost of doing business’. Anyway, stay safe.

    PS, if anything did happen to you and it could be shown that an official agency rather than say ‘Russian mobsters’ (already established as patsies) was responsible, do you think they would be found to have ‘broken laws’, or failed to ‘observe regulations’? How is it in our wonderful modern democracy that we are even able to ask questions like this? Conspiracy theory has gone mainstream, and with good reason. Your term ‘twilight of justice’ says it all.

  17. desmond April 9, 2013 at 11:44 am #

    thank you Golem for putting this post up. Reminds me of the minister lord green is it? that was running HSBC in mexico a few years back. and where exactly his fabulous bonus came from.. Please keep up the good work so long as possible. This following was written by Winston Churchill i think in a time of similar despair..

    Who’s in charge of the clattering train
    the axles creak and the couplings stain
    the pace is hot and the points are near
    and sleep has deadened the drivers ear
    and the signals flash in the night in vain
    for death is in charge of the clattering train.

  18. Gary April 9, 2013 at 4:09 pm #

    Bitcoins may be our best hope.

    PS : you are fearless in your investigations. Thanks

  19. Gregg April 9, 2013 at 5:43 pm #

    This is all about Free Speech. After all the gov’t (and their corporate cronies) censor the media and ban books like “America Deceived II”.
    Last link of “America Deceived II” before it is completely censored:

  20. Peter Greene April 9, 2013 at 7:28 pm #

    The only solution is universal telepathy, which would be torture or at least would reduce population density.

  21. Roger April 10, 2013 at 8:50 am #

    Speaking of Farming,

    this is not just the thin edge of the wedge these jeckylls are already sat happily at high table with our corrupt politicians and bankers time to chuck their rotten tomatoes back at them!

    Our vegetables and fruit are about to be patented to grow Monsanto’s profits, making food more expensive and strangling the farmers we rely on everyday. But we can pressure European countries to step in and stop the corporate food attack. We have no time to lose — up to 800 patents are in the pipeline waiting to be approved!

    Join me in this campaign here:http://www.avaaz.org/en/monsanto_vs_mother_earth_loc/?kemqUcb

    to repeat, again and again.

    this is not just the thin edge of the wedge these jeckylls are already sat happily at high table with our corrupt politicians and bankers time to chuck their rotten tomatoes back at them!

    time to chuck their rotten tomatoes back at them!



  22. Anne Tanner April 10, 2013 at 8:54 am #

    I think the questions we need to ask ourselves and our politicians is why is it that the financial world is ‘regulated ‘ while we, ordinary citizens, are policed? Why do they have regulations to observe, while we have laws to obey? Why are they asked to merely assess themselves while we are investigated by officers of the law? Who profits from this careful double standard?

    The immediate answer is obvious, but I have moved house twice in the last 10 years. On each occasion I had to have an identity check (to prevent money laundering!!). I have no doubt whatsoever that estate agents and solicitors charge for this. This is a complete farce and demonstrates exactly what you say.

    This additional cost to the ordinary home owner in no way prevents money laundering. The only ‘laundering’ I do is done with a washing machine and detergent!

    Go on exposing the dirty underbelly of this system, more power to your pen!

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    Did you build this web site yourself? Please reply back as I’m hoping to create my very own website and would love to know where you got this from or what the theme is called. Appreciate it!

  24. allcoppedout May 10, 2013 at 2:43 pm #

    I just want to add my thanks and solidarity. A new day job is taking my time at the moment. I wonder a lot (as ex-cop and ex-academic) how we might investigate and prosecute for change. Most of such leads to the frustrations of cold, impotent rage.
    Off the wall, I note we lack popular literature on these matters. Our detective fiction is routinely focused on cops chasing down utterly vile black hats – typically serial killers in small towns with murder rates per week that exceed national annual totals.

    Yet the plot underlying Golem, Nakedcapitalism and even libertarian Zerohedge (three from hundreds) makes fiction look tame and even propaganda at the level of old Soviet contempt for the whodunit. One could follow a plot from polite, liberal university fund raisers through a hedge fund in Mayfair to the killing fields and bestial brutality of mines in the Congo – and indeed through much more (microfinance as land grabbing etc). I suspect the model for such fiction is JB Priestly’s ‘An Inspector Calls’ written on the global scale.

    The issue becomes where the truth can ever out. Even teaching Critical Theory one gets the feeling of being in the middle of a therapy club. I can barely remember any cop fiction in which the first thing in the investigator’s mind reflects real practice – ‘how much is this going to cost?’ is the main first consideration. The SIO is a devolved budget manager. SFO investigations are now rigged as they must beg the Treasury for money for new investigations.

    It is clear we have no legal system that can cope with money laundering, but the situation is much worse than this. When one looks at the results of the crimes (famines, genocides, lack of opportunity for decent business and the development of a modern society) one is confronted immediately with hopelessness, powerlessness and shame. The “sensible” view is not to look in fear one’s own living will be taken away. One can think of old stories about small countries far away. Soon, I suspect we will hear the first story of a UK university, privatised and looted …

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  1. The Real Cyprus Template - See Also, Who Wants To Make The Truth Illegal - April 12, 2013

    […] second article by David Malone provides a more lengthy discussion of how the banking sector elite have gone to great lengths to cover up their crimes of money laundering…, using the failed mechanisms of regulatory capture to keep the truth hidden from the general […]

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