Thursday, February 9, 2012

The Down side of Money Laundering



One would think that laundering drug money into local businesses would be a win win situation. Not so. In an economic slow down one would think that laundering money through construction, real estate or casinos would help boost the economy. Unfortunately, that’s not what happens and I’ll tell you why. Greed.

Everybody wants to get a better deal. Everybody wants to get a better return on their investment. They keep wanting more and more until that greed consumes them and shoots themselves in the foot. Take BCCI. The world’s largest bank collapse because of arms dealing, drug smuggling and money laundering.

But wait, if the bank was laundering drug money, wouldn’t that make it more profitable? Why did it collapse? That would be the investment fraud tied to the money laundering. We can argue about investment fraud until the cows come home. The fact is, BCCI laundered drug money and collapsed as a result.

It’s like the investment fraud the Bush family was extensively involved in. Take out a bank loan to invest in a fake company or a dry oil well. Con investors to put their money into the fake company or the over inflated dry oil well, then take off with the investors money and default on the bank loan with the promise of bailing out the bank loan with tax dollars. Ultimately this fraud steals from the tax payer as well as the investors.

Only it wasn’t just the Bush family that was involved in the reoccurring scam. Al Martin claims it was a fund raising tool for Iran contra. That means it wasn’t just Jeb Bush instructing him how to commit the fraud, it was Oliver North and Richard Secord as well.

Richard Secord was Oliver North’s boss. It wasn’t just Oliver North and Richard Secord either. All Martin claims that when the large Texas banks crashed in the /80’s, the Agency defaulted on many loans it took out through paper shell companies not because they didn’t have the money but because they ripped off the bank as a means of fundraising for covert operations.

The problem with laundering drug money is that they always over reach and couple it with investment fraud in efforts to double their money. Catherine Austin Fitts refers to this as the tapeworm economy. She says most people are afraid to stop the money laundering on Wall Street because they are tricked into thinking their investments and their RRSPs will go down when in reality, the opposite is true. Investment fraud destabilizes the market.

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