Border bust equals possible international incident-missing TARP funds?

Seizure of US government bonds from two Japanese men in Italy raises questions

The above is a link to an AsiaNews report which includes the following excerpts:

Milan (AsiaNews) – There have been new developments with regards to the story of US$ 134.5 billion in US government bonds seized by Italy’s financial police at Ponte Chiasso on the Italian-Swiss border, which AsiaNews reported four days ago…some commentators are starting to link the story to reports in US press dating back to 30 March.  On that date the US Treasury Department announced that it had about US$ 134.5 billion left in its financial-rescue fund, the Troubled Asset Relief Program (TARP), whose purpose is to purchase assets and equity to buttress companies in trouble…At the same time, Japan’s Kyodo news agency has reported that the resignation of Japan’s Interior Minister Kunio Hatoyama might also be related to the Ponte Chiasso affair. Officially the minister quit as a result of a row over who should head the state-owned Japan Post, but some sources have suggested that such a scenario is not very plausible since Mr Hatoyama was Prime Minister Taro Aso’s main ally in his rise to the prime minister’s office, and is especially unconvincing since the ruling coalition government has to face elections in just two weeks time. Indeed there are many reasons to connect the Ponte Chiasso incident to the minister’s resignation…the men carrying the bonds had a Japanese passport. Secondly, they were not arrested. Under Italian law anyone in possession of counterfeit cash or bonds worth more than a few tens of thousands of euros must be arrested…two well-dressed Japanese men carrying a briefcase travelling in a local train usually used by Italian manual labourers who commute to Switzerland for work had as much chance to go unobserved as two European businessmen travelling in the Congo…the incident raises several questions.

For example, why did Italy’s press, of every stripe, first give the matter great visibility, only to drop it as quickly? Also, if we are to assume that the bonds are real, why were they in Italy on their way to Switzerland? If these were the unused TARP funds why would they be in US Federal Reserve denomination?  If they are authentic and owned by a foreign state, why were they not transported in a diplomatic bag, which cannot be inspected at customs? And what will the Italian government do insofar as the issue represents an offence under Italian law? Will it impose a fine of 38 billion euros, and run the risk of a row with an ally, or return the money without any penalty to the rightful owner?”

Hatoyama resignation…”Japan’s internal affairs and communications minister resigned Friday, dealing a setback to conservative Prime Minister Taro Aso just months before a general election”…

The WSJ reported on March 30 that Treasury Has $134.5 Billion Left in TARP…”The Treasury Department said it has about $134.5 billion left in its financial-rescue fund, giving the Obama administration a cushion as it implements expensive programs aimed at unlocking credit markets and boosting ailing industries”….

According to the US Treasury’s TIC data, Japan had $661 billion in Treasury bonds total in Feb 2009. So these guys were carrying the equivalent of a significant proportion of Japan’s total foreign reserves in a suitcase. 20% of the total that US Treasury shows.  To put it in perspective, Russia’s total holdings of US Treasuries per the same source is $130 billion.

So, questions that one might have include:

How could two people have the equivalent of an entire country’s foreign reserves in a suitcase?

Why would they be Japanese, and trying to smuggle these bonds into Switzerland?

Are the documents in question real or counterfeit?

Either way, it’s a major story…the biggest counterfeiting bust in history, or the biggest smuggling bust in history.  Why isn’t this getting more attention in the mainstream media?

Why would Japan be moving funds this way, if indeed the Japanese government is involved?

Why is the amount in question here essentially the same as the amount of remaining TARP funds that was reported March 30?

UPDATE:  Here are a couple of links to documents with testimony before Congress regarding issuance of Treasury bearer bonds after 1985 and money laundering.



  1. […] the original post: Border bust equals possible international incident-missing TARP … Tags: a-local-train, and-gives, cheap-such, eastern, eastern-europe, federal-reserve, […]

  2. Jamie said

    Where is this Kyodo story linking Hatoyama and Ponte Chiasso?
    I’ve searched Factiva for it and have found nothing

  3. Anonymous & Reasonable said

    I am just glad we have someone as competent and honest as President Obama running things. He will not let a matter like this go unsolved. I am positive with his transparent government policy all the details of this will come out within days and if they are real then we will see a complete audit of the US federal reserve. If we do not we will know Obama is really a crook and guilty of things even worse than George Bush and we can begin to call for his impeachment.

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