Goldbug

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Blumberg's reporting the ties between Mexican Drug cartels and US banks! I can't wait 'til they dig a little deeper.xdancex

http://www.bloomberg.com/news/2010-06-29/banks-financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-deal.html

The 1970 Bank Secrecy Act requires banks to report all cash transactions above $10,000 to regulators and to tell the government about other suspected money-laundering activity. Big banks employ hundreds of investigators and spend millions of dollars on software programs to scour accounts.

No big U.S. bank -- Wells Fargo included -- has ever been indicted for violating the Bank Secrecy Act or any other federal law. Instead, the Justice Department settles criminal charges by using deferred-prosecution agreements, in which a bank pays a fine and promises not to break the law again.

‘No Capacity to Regulate’

Large banks are protected from indictments by a variant of the too-big-to-fail theory.

Indicting a big bank could trigger a mad dash by investors to dump shares and cause panic in financial markets, says Jack Blum, a U.S. Senate investigator for 14 years and a consultant to international banks and brokerage firms on money laundering.

The theory is like a get-out-of-jail-free card for big banks, Blum says.

“There’s no capacity to regulate or punish them because they’re too big to be threatened with failure,” Blum says. “They seem to be willing to do anything that improves their bottom line, until they’re caught.”

Edited by Goldbug
Added info

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You tend to be ultralibertarian. I know this is an issue, but the fix for this is heavy governmental intrusion. You can't buy a car with cash or travel through an airport with a certain amount of cash without reporting to the federal government now.

I don't know. We could probably eliminate the money cleansing, but it would require major privacy invasion and all of the tangential issues that come along with that. There has to be some middle ground where we balance the interests of privacy with law enforcement.

Edited by jq26

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I don't know. We could probably eliminate the money cleansing, but it would require major privacy invasion and all of the tangential issues that come along with that. There has to be some middle ground where we balance the interests of privacy with law enforcement.

But that's precisely the point. An individual can have his phone tapped, his email watched and his every bank transaction scrutinized! The banks seem to be immune to this, or they couldn't get away with the money laundering! Like the video said, if they succeed with the money laundering they will score big, if caught, they pay very small penalties.

I'm a firm believer in everybody being held to the same standard, 'fair for the goose, fair for the gander' and all that. This sounds like not much has changed since the Iran-Contra/BCCI scandal, at least for the banks. Enforce the law for them, or leave us alone.

IMHO, the 'protect the stock market' excuse is bogus, the market is a gamble. If the banks are corrupt and get caught, and as a consequence they lose a lot of money, the investors will know better than to buy their stock next time. The market will police itself, or more accurately, force the banks to police themselves.

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I can't watch the video from this computer, but my understanding is that individuals do not have emails read, phones tapped, and bank txns scrutinized without a warrant. If there were a suspicion that banks were committing a crime, they too would be subject to the same enforcement tools. The banks here aren't under suspicion of committing any crime (aside from nonreporting) so there is no warrant to issue.

The banks aren't laundering money. They are failing to report others laundering money, or more accruately failing to report to the federal government any transactions that could be potential laundering. I don't want to get into a situation where we're all constantly monitored for potential crimes by the feds. These laws are getting pretty close to it. These same laws that went into effect in the 70s and 80s to fight the war on drugs are the same laws that make it illegal for an honest person to pay more than $10k in cash for a vehicle/property without filling out an affidavit as to where it came from. IMO, it is none of their d*mn business. You likely feel the same way from the history of your other posts.

If the feds want to police these things, okay. But let's not turn banks into agents of the FBI by making a failure to report certain customer activities to the feds a crime. We're really walking a thin line here...

How do you feel about this administration shaking down Swiss banks for international banking records? Sure, they have good intentions (fighting tax evasion), but the method of choice seems to be to criminalize a foreign corporation who fails to comply with the whims of this government.

Edited by jq26

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I

can't watch the video from this computer, but my understanding is that individuals do not have emails read, phones tapped, and bank txns scrutinized without a warrant. If there were a suspicion that banks were committing a crime, they too would be subject to the same enforcement tools. The banks here aren't under suspicion of committing any crime (aside from nonreporting) so there is no warrant to issue.

While it's true that a warrant is needed for surveillance, the misnamed "USA Patriot Act" reduced the FISA requirements, among other things, and made the government powers so broad, that there is basically no privacy for any of us. Unless you're a big bank, apparently.Here's wiki's report on what the act says, read titles II and III closely.

http://en.wikipedia.org/wiki/USA_PATRIOT_Act

This sounds pretty innocuous until you search "patriot act compliance", not to mention there seems to be subjective enforcement of Title IV, but that's a different story.

The banks aren't laundering money. They are failing to report others laundering money, or more accruately failing to report to the federal government any transactions that could be potential laundering. I don't want to get into a situation where we're all constantly monitored for potential crimes by the feds. These laws are getting pretty close to it. These same laws that went into effect in the 70s and 80s to fight the war on drugs are the same laws that make it illegal for an honest person to pay more than $10k in cash for a vehicle/property without filling out an affidavit as to where it came from. IMO, it is none of their d*mn business. You likely feel the same way from the history of your other posts.

They admit the money laundering, jq! But the government that punishes us won't punish them! "Banks Financing Mexico Gangs Admitted in Wells Fargo Deal". I don't like government intrusion at all, my views are probably mirrored best in the Kentucky Resolution of 1798 and the Virginia Resolution of 1798. http://www.constitution.org/cons/kent1798.htm That's as close to original intent as you're likely to get, IMHO! But, be that as it may, if you are going to regulate, do it evenly. Laws will change when the big corporations are held to the same laws as we serfs and not before.

If the feds want to police these things, okay. But let's not turn banks into agents of the FBI by making a failure to report certain customer activities to the feds a crime. We're really walking a thin line here..

The overwhelming majority of us are already there, while the banks get a "walk", that's my point!

How do you feel about this administration shaking down Swiss banks for international banking records? Sure, they have good intentions (fighting tax evasion), but the method of choice seems to be to criminalize a foreign corporation who fails to comply with the whims of this government.

I see it as a possible revenue grab (low probability) and a "feel good" political measure. Are all offshore "tax havens" subject to this or did they just pick out the Swiss? If it's just the Swiss that are being targeted, I would suspect a political move to take down Swiss banking, maybe in the manner of Iceland, perhaps? Just my opinion, of course.

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$10K is for a CTR, or Currency Transaction Report.

An SAR, or Suspicious Activity Report, can be filed for ANY amount of money or ANY activity. Those are going to depend upon how well one bank versus another trains it's front line tellers to look for suspicious activity.

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