The Chiasso financial smuggling case began on June 3, 2009 near

Chiasso, Switzerland Chiasso (; lmo, Ciass ) is a municipality in the district of Mendrisio in the canton of Ticino in Switzerland. As the southernmost of Switzerland's municipalities, Chiasso is on the border with Italy, in front of Ponte Chiasso (a frazione of Co ...

(near the Swiss/Italian border), when Sezione Operativa Territoriale di Chiasso in collaboration with officers of Italian customs/financial military police (

Guardia di Finanza The ''Guardia di Finanza'' (G. di F. or GdF) () (English: literal: ''Guard of Finance'', paraphrased: ''Financial Police'' or ''Financial Guard'') is an Italian law enforcement agency under the authority of the Minister of Economy and Finance. ...

) detained two suspects (who appeared to be Japanese nationals in their 50s) who had attempted to enter Switzerland with a suitcase in their possession with a false bottom containing what at first appeared to be

U.S. Treasury Bonds United States Treasury securities, also called Treasuries or Treasurys, are government debt instruments issued by the United States Department of the Treasury to finance government spending as an alternative to taxation. Since 2012, U.S. gov ...

worth $134.5 billion. The two possessed 249 U.S. bonds worth $500 million each (among other securities, they also had 10 "Kennedy bonds" denominated at $1 billion each). The large denominations of the securities, along with accompanying bank documentation, was what attracted the Italian police's attention. Large denominations are not available to the general public; only

nation-state A nation state is a political unit where the state and nation are congruent. It is a more precise concept than "country", since a country does not need to have a predominant ethnic group. A nation, in the sense of a common ethnicity, may in ...

s handle such amounts of money.

Investigation and determination

Assessment as to the authenticity of the bonds began immediately (

counterfeiting To counterfeit means to imitate something authentic, with the intent to steal, destroy, or replace the original, for use in illegal transactions, or otherwise to deceive individuals into believing that the fake is of equal or greater value tha ...

of these securities was suspected). One source reported that the U.S. Securities and Exchange Commission had been requested to verify the authenticity of the bonds. On June 18, 2009 the ''

Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...

'' reported that the Italian police and the

U.S. Secret Service The United States Secret Service (USSS or Secret Service) is a federal law enforcement agency under the Department of Homeland Security charged with conducting criminal investigations and protecting U.S. political leaders, their families, and ...

had concluded that "the bills and accompanying bank documents were most probably counterfeit, the latest handiwork of the

Italian Mafia Organized crime in Italy and its criminal organizations have been prevalent in Italy, especially Southern Italy, for centuries and have affected the social and economic life of many Italian regions since at least the 19th century. There are six ...

." Col. Rodolfo Mecarelli, the provincial commander of the financial police in Como, said that the bonds "are made of filigree paper of excellent quality." Mckayla Braden, senior adviser for public affairs at the Bureau of Public Debt at the

U.S. Treasury Department The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and ...

also said that this type of counterfeit bond scam "has been going on for years." The ''Financial Times'' also reported that the two suspects "had been released" by Italian authorities. No additional comment or elaboration from the

(Italian financial/customs military police) headquarters in Rome was available. As well, Ed Donovan, a spokesman for the

United States Secret Service The United States Secret Service (USSS or Secret Service) is a federal law enforcement agency under the Department of Homeland Security charged with conducting criminal investigations and protecting U.S. political leaders, their families, and ...

, has said that the “U.S. Secret Service, which polices counterfeiting of U.S. currency, is assisting Italian authorities in tracing the source of the fake bonds." Nonetheless, Japanese authorities also remained interested in the matter. Takeshi Akamatsu, a press secretary for the

Japanese foreign ministry The is an executive department of the Government of Japan, and is responsible for the country's foreign policy and international relations. The ministry was established by the second term of the third article of the National Government Org ...

, confirmed that the two suspects were carrying Japanese passports and had been detained and questioned by the Guardia di Finanza, but that Tokyo had not been informed of their names or whereabouts during or after their release.

Reactions and speculation

There has been very little in the way of official statements regarding this case, raising concerns about who made them, dumping of U.S. debt and Italian interests. Initial reactions to the story contemplated that, if the bonds were genuine, this case would have been the largest single act of

smuggling Smuggling is the illegal transportation of objects, substances, information or people, such as out of a house or buildings, into a prison, or across an international border, in violation of applicable laws or other regulations. There are variou ...

(with respect to financial value) in recorded history. The total value of the counterfeit bonds was estimated at approximately one percent of total

U.S. GDP The United States is a highly developed mixed-market economy and has the world's largest nominal GDP and net wealth. It has the second-largest by purchasing power parity (PPP) behind China. It has the world's seventh-highest per capita GDP ...

in 2008. The pair would also have been considered the fourth largest creditor to the U.S., ahead of the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and ...

and just behind

Russia Russia (, , ), or the Russian Federation, is a transcontinental country spanning Eastern Europe and Northern Asia. It is the largest country in the world, with its internationally recognised territory covering , and encompassing one-ei ...

. As well, according to Italian law failing to declare currency above 10,000 euros can be punished by fines of 40%.

Similar incidents

An earlier billion-dollar bond case was recorded in 2002, when the

United States Court of Appeals for the Seventh Circuit The United States Court of Appeals for the Seventh Circuit (in case citations, 7th Cir.) is the U.S. federal court with appellate jurisdiction over the courts in the following districts: * Central District of Illinois * Northern District of ...

, located in

Chicago (''City in a Garden''); I Will , image_map = , map_caption = Interactive Map of Chicago , coordinates = , coordinates_footnotes = , subdivision_type = List of sovereign states, Count ...

, heard a case from two men who sought $100 billion from the

Federal Reserve Bank of Chicago The Federal Reserve Bank of Chicago (informally the Chicago Fed) is one of twelve regional Reserve Banks that, along with the Federal Reserve Board of Governors, make up the United States' central bank. The Chicago Reserve Bank serves the Seven ...

. Judge

Richard Posner Richard Allen Posner (; born January 11, 1939) is an American jurist and legal scholar who served as a federal appellate judge on the U.S. Court of Appeals for the Seventh Circuit from 1981 to 2017. A senior lecturer at the University of Chic ...

denounced the plaintiffs' claim as "preposterous" and listed reasons to doubt the authenticity of their bonds. However, the question for the court was not authenticity, but whether the plaintiffs had voluntarily withdrawn their claim in time to avoid

summary judgment In law, a summary judgment (also judgment as a matter of law or summary disposition) is a judgment entered by a court for one party and against another party summarily, i.e., without a full trial. Summary judgments may be issued on the merits of ...

against them. The court decided that they had, and Posner warned them that attempting to bring a similar claim in the future could result in sanctions. On September 18, 2009, a similar incident was reported by the Italian financial military police

, this time involving two Philippines nationals smuggling purported U.S. Treasury bonds valued at approximately $180 billion at

Milan Malpensa Airport Milan Malpensa Airport is the largest international airport in northern Italy, serving Lombardy, Piedmont and Liguria, as well as the Swiss Canton of Ticino. The airport is northwest of Milan, next to the Ticino river dividing Lombardy and Pie ...

. Both men were detained. On January 26, 2011, another similar incident was reported by the Italian military police

Carabinieri The Carabinieri (, also , ; formally ''Arma dei Carabinieri'', "Arm of Carabineers"; previously ''Corpo dei Carabinieri Reali'', "Royal Carabineers Corps") are the national gendarmerie of Italy who primarily carry out domestic and foreign polic ...

, this time involving six smuggling U.S. Treasury bonds (valued at approximately €20 billion and said to be counterfeit) at a highway rest stop. The six are under investigation for receiving stolen goods. On February 17, 2012, it was reported that Italian police had seized $6 trillion in counterfeit U.S. bonds. 8 Italian citizens were arrested for attempting to defraud several Swiss banks using the phony bonds as collateral for loans. They were also accused of counterfeiting bonds, credit card forgery, and loan-sharking in the Italian regions of Lombardy, Piedmont, Lazio and Basilicata.

Notes

External links

AsiaNews article about doubts on claims that bonds are fake.

Secret Service is Investigating

NY Times Story

If the bonds are confirmed, then it is the largest financial smuggling operation in history.

This source stated that the SEC has been asked to authenticate the bonds.

* [https://www.telegraph.co.uk/finance/economics/5586543/Is-this-the-death-of-the-dollar.html In the Telegraph, commentator Edmund Conway stated that this story points to falling global confidence in the U.S. Dollar.]
Bloomberg report that U.S. Dollar reached a new low in 2009 vs. other world currencies

A similar case
{{DEFAULTSORT:Chiasso Financial Smuggling Case Commercial crimes Organized crime events in Switzerland Smuggling 2009 in Italy Chiasso

Investigation and determination

Reactions and speculation

Similar incidents

See also

Notes

External links