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Swiss Bank Goes Online

Roblimo posted about 15 years ago | from the gnomesofzurich.com dept.

The Almighty Buck 99

HalAshton writes "In a move that should make it easier to launder money on the internet. A Swiss bank is going online with initial deposits only $5000." U.S. regulators and the IRS are worried. Next thing you know, they'll want back doors into all crypto so that Internet-using tax evaders have a harder time hiding from them.

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What about security? (0)

Anonymous Coward | about 15 years ago | (#1670750)

The "IRC are worried" is all fine, but did they solve the security issues that let me do transactions saftly?

Forget the IRS, are my transactions safe from crackers?

PS
I would love to login, if only slashdot let me create a user, or recover my old (never used) profile.

Laundering? How? (0)

Anonymous Coward | about 15 years ago | (#1670751)

Huh?, I am not an expert in laundering money, but
I would think that the key step in the process is
breaking the documentable trail of transactions -
generally by using cash. Since all transactions
and data transmitted on the net form a document
trail, everything is traceable - at least until
the bank deletes their history/log files. This
abstracts from the ability of the authorities to
access the date via legal subpeonea, etc. of course.

E-commerce (0)

Anonymous Coward | about 15 years ago | (#1670752)

Will the bank be S.E.T. compliant, using M$ Wallet or similar "cybercash" ? That would make it easier to update my adultcheck ID.

Re:What about security? (0)

Anonymous Coward | about 15 years ago | (#1670753)

I have that same problem; can't create an account and can't remember my old nick. Jeremy

Re:Laundering money (0)

Anonymous Coward | about 15 years ago | (#1670754)

Hey, In Australia, I hear they can freeze your bank account - no judge, no nothing. The 10K rule is stupid, as may have been nabbed for amounts under 5K, and the casinos and banks are all under 'video' . The divorce laws here mean that the ex gets too much. I see a big demand for this service, by honest citizens who think the law has gone from sublime to the ridiculous. As stated, the only thing stopping this is the stupid banks that will not disclose their 'technology' (can u trust them), or the ability to set policies on the e-bank-account: ie ; anyone can deposit, withdrawals by signed slip only. It will come though

Questions about Swiss Bank accounts (0)

Anonymous Coward | about 15 years ago | (#1670755)

If it's non-computerized, how do they ensure reliable records? what if there's a fire?

And how does a non-named numbered account user identify himself? I read in one novel that they just write the actual number, and the handwriting is the identity.

Anybody here from Switzerland?

Re:Not THAT big a deal. (0)

Anonymous Coward | about 15 years ago | (#1670756)

Well, the Swiss WILL give out information IF there is a criminal investigation going on. Criminal according to Swiss law that is. Tax evasion is not a crime in Switzerland. They do, however, levy a tax at source of 30 % of dividends. They (the banks) are usually not particularly fond of american citizens as customers. This is because of the pressure exerted on their us based branch offices by the US gov.

Re:What's this have to do with Swiss Banks (0)

Anonymous Coward | about 15 years ago | (#1670757)

We're talking about the Swiss, not the Americans. We already talk about the American Government plenty.

numbered accounts (0)

Anonymous Coward | about 15 years ago | (#1670758)

If nobody knows your name how do they identify you, and how do you transfer money, etc?

Is this done on the phone? How do they know you, by your voice? What if the person who recognizes you is dead - how do you carry out transactions?

And...what if the ledger of names/numbers gets burned in a fire? Billions of dollars in one book lost?

Re:Why does the US have to control everything? (0)

Anonymous Coward | about 15 years ago | (#1670759)

"Is there no way of getting those in government who have "power" to exert it responsibly, for the people's good, rather than to forward their own agendas as politicians?"

There is - just take it away from them.

Fascinating stuff... (0)

Anonymous Coward | about 15 years ago | (#1670760)

...thanks for an informative post.

Slashdot vs. FT (0)

Anonymous Coward | about 15 years ago | (#1670761)

Why is it that the story I read about this in the Financial Times on the weekend had a positive tone, and on Slashdot it was cast in a "internet causes society to collapse" light? Very Strange. And yes there are people who read Slashdot and the financial papers.

Re:We at the FBI think this is great... (0)

Anonymous Coward | about 15 years ago | (#1670762)

:-)

Re:Laundering money is hard and getting harder (0)

Anonymous Coward | about 15 years ago | (#1670763)

"...the tax-men want to look at the books in some detail, partly to make sure you are not ripping them off..."

that is equivalent to a burgler waking you up in the middle of the night to make sure you aren't hiding anything he might want to steal.

Re:Laundering money (0)

Anonymous Coward | about 15 years ago | (#1670764)

Yow! I'm learning all sorts of neat stuff here!

Anybody wanna buy a rolex?

:)

Re:Swiss banks and money laundry (0)

Anonymous Coward | about 15 years ago | (#1670765)

Well for some reason > the half of the wealth of Russia is in Swiss banks under the accounts of Russian Mafia leaders. The reality is Swiss banks are used to hide stolen income; especially if you have a few Billion.

Wingspan: "No foreigners!" (0)

Anonymous Coward | about 15 years ago | (#1670766)

Wingspan refuse to open accounts for foreign clients (Non-Resident Aliens from the US's point of view). This is xenophobic but, sadly, true of most US banks.

democratic moderation (was Re:Why does the US....) (0)

Anonymous Coward | about 15 years ago | (#1670767)

Easy. Three moderators marked it up, one marked it down as Flamebait. The one that marked it down was the last one to mark it, so it shows up as (Score: 3, Flamebait).

In short: a bit of democratic moderation going on there ;)

Slashdot Bank (0)

Anonymous Coward | about 15 years ago | (#1670768)

Pay to the Order of..........Anonymous Coward

Somebody had to say it...

Re:What about security? (0)

Anonymous Coward | about 15 years ago | (#1670769)

If you can't log in, try turning cookies on. One (annoying, IMHO) "feature" of Slashdot is that it requires cookies for authentication.

Tau Zero, trying to get this computer set up so I can re-load *my* cookie and log in...

Re:Laundering money (0)

Anonymous Coward | about 15 years ago | (#1670770)

Sometime ago, here, a dirt politician used to do his laundry by betting in the lottery.
Of course he bought all numbers.

Re:Laundering? How? (0)

Anonymous Coward | about 15 years ago | (#1670771)

Well, I may have misunderstood or you may be misunderstanding. The point of laundering money is so you can use it. It is a sin (and is silly) to let money sit idle. Laundered money can be invested to make more money -- you want the little green critters to breed! If you move $10,000 into a Swiss account and it sits there, the IRS will take an interest in you because they wouldn't believe that anyone would be stupid enough to at least get interest (which is taxable). We aren't really talking about a safety deposit box full of cash, but rather an account that can be used to invest, where the returns aren't taxed. To give you an example, think of investing in the market over the last five years -- you would have a lot more money if you weren't paying capital gains taxes.

Re:Super Swiss Security (0)

Anonymous Coward | about 15 years ago | (#1670772)

Last time I was curious, the minimum deposit was $500,000 for a very minimal account. I think that about five years ago there was a bit of consolidation (help me here -- I have been out of the field for about six years) and a number of banks sought to lure more customers with a similarly minimal-service account with a minumum deposit of $200,000 or so. As far as I know (and I may be way off here), for a "real" account, you still need several million for a basic account.

That being said, I think that this is a sign of things to come. One of the cool aspects to pervasive availability of computer resources is that the basic services that could only be afforded by the rich can now be obtained by average people because the cost has dropped radically. Yes, you lose the service, but the key issue is that you get the product, when before you could not. Now, I am not talking about a largely service-type product (i.e., a week in a spa will probably not get a lot cheaper).

Think of insurance: this industry has consolidated hugely and you can now get your insurance from brokers that can scour the US and even the planet for the best rates. This is only going to get tighter as standards get rid of the fake deals.

Think of banking (the topic we are on): I can now do stuff that ten years ago would have required a private banker on-line. I can't recall when I last set foot into a bank.

Think of brokerage houses: I do my trades on line with Fidelity. Not perfect, but I am not a day trader, and it is pretty cheap. Yes, I could go a lot cheaper, but it is an occasional thing. Point is, I would have had to walk into Merril only a few years ago and would have paid a lot more.

Think of buying large ticket items (cars, boats): you can do it directly, more and more.

Think of buying less costly items -- even things like HVAC units: I bought my last chiller on line. I never saw it, the sales guy, or anything. Two weeks later, I went up to the roof with the manager just to see it. I knew what I was buying (standard) and who would put it in (bonded and insured HVAC/Leibert reps) so I just paid.

Every business that depends upon keeping an information bottleneck is either going to turn into a broker of information (they filter for a fee) or will disappear. That means the local State Farm Insurance guy, auto dealers, and so on. The availability of certifications to provide assurance and of companies doing more assurance work will make people a lot more secure about doing everything without "service" beyond a web site for things that are really commodities, even if they only make 200 of them a year in the US.

This sort of thing -- offering the security of a Swiss account without the cost of a "real" account and without the service, will get more and more common. The US goverment can stop penalizing people for making money or suffer as capital flight comes within reach of the average person.

Re:Swiss banks and money laundry (0)

Anonymous Coward | about 15 years ago | (#1670773)

I think it's less resentful and more envy.

sigh

Re:I have been using Swiss Banking for 3 months no (0)

Anonymous Coward | about 15 years ago | (#1670774)



"If you fly out and make a cash deposit in a numbered account, the US government can't get to you. "

If they "get to you" at the airport with more than $10,000 they can lock you up. They will lock you up. It's a felony. When you get out, you won't be a citizen anymore.

Re:Laundering money (0)

Anonymous Coward | about 15 years ago | (#1670775)

It's not that simple in vegas.
If you win two $5000 stakes, you'll have to
talk to the IRS. These people have their shit
together.

Re:Laundering money (0)

Anonymous Coward | about 15 years ago | (#1670776)

Trust you? Why? I've seen pizza places do a brisk business in under-the-table (literally) briefcase exchange, as well as being very profitable while managing to make only a few lousy pizzas. One particular place where my friends worked managed to survive a mafia roundup that nabbed one of the employees, who himself owned two restaurants and two large houses, yet was slinging pies in some backwater burb. I don't doubt that the feds are tenacious when they get on your case, but it's not too hard to avoid attention in the first place.

Re:money laundering? (0)

Anonymous Coward | about 15 years ago | (#1670777)

Actually, you can have them preform acts that are legal, even if the reasons for them are not. For instance, there are any number of cases I saw in the bulletins when I was still a consultant from the accountants discussing an attorney who had been jailed and then freed for paying the IRS a lot of money. Wouldn't say from whome -- just gave the IRS $600,000 in one case and $4,000,000 in another. So the IRS threw the attorney in jail. In both cases the attorney was out quickly and the IRS paid damages. Who knows why they were paying -- perhaps a drug lord thought that they were about to be arrested and wanted to pay their taxes. Stranger things have happened. Periodically a street person in Austin would come in with a money order for drug tax stamps from the Comptrollers office (IIRC) and leave with the stamps. Sometimes he held them for weeks before he would disappear, only to be found later, drunk as a skunk and very pleased with himself. This homeless dude was buying $200,000 of drug tax stamps at a time! Whoever was buying them was doing it just in case they were caught -- they couldn't be charged with a local tax violation.

The relationship of the IRS and the courts, the IRS and the DoJ, and the IRS and basically all of the rest of the government is pretty strange. Like the CIA, they never quite fit in and have gone off on some pretty odd tangents. The founders never counted on either and so the consitution is ill-equipped to deal with them.

Re:Laundering money (0)

Anonymous Coward | about 15 years ago | (#1670778)

The IRS actually has offices in most of the larger casinos. This works for foreigners as well, as you can get letters from them attesting to the legitimacy of money if you win $500,000 and want to take it all back with you to East Bongo-Bongo in cash, thus eliminating customs hassles.

It is a legitimate business these days, the casinos, for the most part. Just a little odd, but legitimate.

Internet (0)

Anonymous Coward | about 15 years ago | (#1670779)

What's the problem with transactions over the internet?

I create webmail accounts as natural and I use internet banking routinely, so why couldn't I create a account for money?

This would mean the real anonymousity.

Other Swiss Banks Online--Media only now hyping it (0)

Anonymous Coward | about 15 years ago | (#1670780)

What's the big deal with this--there's no new news here. Many Swiss banks have been online for quite a while. And all Swiss banks are subject to the national secrecy laws, including the big banks (UBS) and the Kantonal banks ("state" chartered banks).

Try UBS [www.ubs.ch] or BEKB [www.bekb.ch] or Zurcher Kantonalbank [www.zkb.ch] or many others. Just like American banks they offer "standard" online banking services. Most of them allow foreigners to open accounts and have websites in several languages. Some even appear to allow Americans to open accounts via correspondence!

Re:money laundering? (0)

Anonymous Coward | about 15 years ago | (#1670781)

Here in Australia the Tax Office (our equivalent of the IRS) is pushing for limitations on professional privilege in such cases to close this particular loophole.

Gnomes of Zurich (0)

Anonymous Coward | about 15 years ago | (#1670782)

What are they up to now? See article on Re-release of Illuminati Card Game. All will become clear.

Re:I have been using Swiss Banking for 3 months no (0)

Anonymous Coward | about 15 years ago | (#1670783)

Well, there is away around this. American gold coins are (still) legal tender. So you could have, say, 499 $20 gold pieces worth $500 each for the gold ($249,500) but only $9980 in legal tender.

There are a lot of other ways to do this. Money orders are good.

What is important is that you make plans to do this over a long period of time so that it would not arouse suspicion. And when you have almost all of your assets outside of the US, you can go ahead and set up a foreign corporation controlled by a foreign trust to employ you, buy your house, lease you a car, and pay you whatever so that you can report it to the IRS. The foreign corporation would be set up in a country that didn't tax non-local income and the trust would be in another country with similar rules, so you would pay taxes on what you made in the US, but could pay yourself a lot more to be deposited in another country, like Switzerland or Austria, where you could use the funds to buy a local annuity that you could use to invest (the Swiss still don't report annuities) without ever getting on the radar of the IRS.

This may seem like a lot of trouble, but if you have an income of $200,000 or better a year, it actually pays for itself quickly.

Let me break it down (a little):

Say you and your SO are DBAs. Gross income of $220,000 a year (not that out of line for good DBAs). Say you pay $100,000 in taxes a year.

Setting up a trust in the Caymans would be about $20,000 when all was said and done. Setting up a company controlled by the Caymans trust in St. Kitts would be about $20,000 too. Setting up a Swiss accont would be $30,000, after legal fees, flights in, and so on. So, you will have spent (to do it properly, as opposed to in a half-assed way) $70,000.

You would then be able to, via the company in St. Kitts, employ you and your honey to do the same work (contract, for instance) and pay you a lot less -- say $30,000 each. The company could then provide you with a house and cars and wind up paying no US taxes, and, because of the local tax laws, no taxes anywhere else either. They assume that you paid the taxes somewhere else, and they don't ask.

Now, assuming that you are paying $30,000 in taxes and $20,000 in accounting fees, that comes to half of the loss that you had before. And I am assuming that you want to spend the same amount. If you wanted to save the remaining difference, that would be another $50,000 in the bank. Assuming that you then invest the money (via another company in the Caymans via Canada is good) in the US stock market, you should be able to make what everyone else makes but pay not taxes. If you need to move money into the US, you can do it from a country that doesn't attract attention, via the Swiss account, like the UK.

This isn't short-term -- this is the long play. If you think about it, you are getting (assuming that everything stays static) half of the tax rate that everyone else gets and if you invest all of that $50,000 for a net 15% return for twenty years, then you would have a lot of money (I can't do this in my head and I am too lazy to get my calculator -- I think that it would be about $20,000,000, with $100,000 a year being twice that), even for a retirement to Switzerland, which is very pretty, very stable, and happy to see well-off foreigners who will pay their own way. And the IRS cannot prove a thing.

If you make more money, obviously, you can get a better (or more dramatic) return. What a lot of people don't realize is that there are many, many ways of not being obvious with the IRS. As was pointed out in this thread, it is camoflage, not armor.

For instance, don't radically change your income. You can say that you have paid off your house and car and want a lower stress job so you took a contract position with lower pay, but if you go from $400,000 a year to $29,000 a year and maintain the same lifestyle, they will notice. If you suddenly have a mysterious company pick up everything, they will notice. They key is to go slowly and commit for the long term.

Another thing is to do so with someone you trust. The courts are full of people whose estranged spouses ratted them out to the IRS for a bounty. I would suggest that you be careful here. Of course, if you involve your SO equally, there is the comfort of spousal immunity, as Bill and Hillary are undoubtedly familiar with. But still, be careful.

If you do this and you have the guts and the caution, you can easily make dramatically more money.

As nerds are making more and more these days and they often question the prevailing attitudes, I would expect that many more will be seeing attorneys to discuss how to go about this.

Re:Swiss banks and money laundry (0)

Anonymous Coward | about 15 years ago | (#1670784)

Why do you care ? I mean did you ever think that some of use don't considering laundering a negative thing, and maybe are planning on doing it? And that is a GOOD thing?
Jeez.. I would be proud to be from such a country!

This doesn't make any sense (1)

Anonymous Coward | about 15 years ago | (#1670785)

I've worked on finance systems.

Even if you crack their account, you can't just drain away millions of dollars. There's a big difference between cracking and defacing a web site and actually embezzling money.

Essentially, your account balance, deposits, etc. are stored as column/row values in an RDBMS. Not only that, but these values have to be in sync with various other tables. What do you mean by "draining away the money"? It doesn't help to just wipe out the numbers - it has to reappear somewhere, in another bank account, meaning updating that bank's row/column values. For this, you need to *transfer* those funds via the Swiss bank's IT process, and normally this is done through file dumps which are transmitted nightly between banks. For this, you need to know the exact file record format, the program logic, the internal relational database structure, and so on.

Even if you manage that, which is extremely unlikely, as you'd need to pore over a shitload of boring COBOL code, it will be spotted fairly quickly on some report when money is missing.

Cracking and sneaking away with millions is good for a movie plot, however.

Re:Not...Other OSbanks online.. (2)

Anonymous Coward | about 15 years ago | (#1670786)

The Caymans are good. Bermuda is very good. They dont offer internet banking though. Other internet based offshore banks are www.fortisbank.lu, www.bil.lu or robecobank (swiss - but they have internetbased private banking services that are luxembourg based). The Luxembourg based banks do NOT deduct dividends tax at the source (the swiss do!). Luxembourg has the bank secrecy act written in to their constitution. Even if you demand (as a customer) that they give your account information to the US gov they'll refuse. If they report - it will be a criminal offence and the responsible person within the bank will go to jail. There are some exceptions to this though (drugrunning etc. - though not tax evation) /m

Re:What kind of guaruntees on this? (1)

dmiller (581) | about 15 years ago | (#1670787)

More importantly, though, what's to stop a small country willing to devote a relatively (for a country) small amount of money to building a distributed computing facility (or a Beowulf cluster, for that matter) and simply smashing away at whatever encryption method the bank is using? Wasn't the 64-bit DES key just brute-forced not too long ago by distributed.net?

BTW if you are aiming to brute-force crypto, you are better of sinking your money into loads of FPGAs than a beowulf cluster. (unless you want to simulate nuclear detonations during off hours :)

If you are using a algorithm and key length that has been broken *very publically* (hell, there is even a HOWTO^H^H^H^H^Hbook about it!), then you deserve everything you get.

Re:Laundering money (1)

Eric Green (627) | about 15 years ago | (#1670788)

Yah, the IRS once tried to get my dad for the same thing (probably because he was friends with a number of people of Italian descent). He ran a barber shop back in the days when people under the age of sixty got their hair cut at barber shops (before "family hair cutters"). So the IRS staked his shop out for a week, keeping track of how many people came in and out, then came in and demanded that he hand over his records for that week. Luckily his records had the right number of people on them!

If a pizza shop is suspected of being involved in money laundering, they'd use the exact same technique.

-E

URLs for MFC Merchant Bank S.A. (3)

Illusion (1309) | about 15 years ago | (#1670789)

It looks like the MFC Merchant Bank S.A. is available at either http://www.mfcbank.ch/ [mfcbank.ch] or http://www.swissnetbanking.com/ [swissnetbanking.com] .
"September 15, 1999 -- SwissNetBanking.com, a unique Swiss banking and on-line share trading service, was launched today by Geneva-based MFC Merchant Bank. MFC Merchant Bank S.A. is a wholly owned subsidary of MFC Bancorp Ltd. (Nasdaq: MXBIF and Frankfurt Stock Exchange: MFC GR). The SwissNetBanking.com website will offer investors the opportunity to open a private Swiss Bank account to trade securities over the Internet."

What kind of guaruntees on this? (2)

Palin Majere (4000) | about 15 years ago | (#1670790)

Internet-accessible bank accounts have always given me pause for thought. What happens if you _need_ the money in the account, and their server is down due to a crash or a DoS attack, or some hardware failure? What happens if security is breeched?

More importantly, though, what's to stop a small country willing to devote a relatively (for a country) small amount of money to building a distributed computing facility (or a Beowulf cluster, for that matter) and simply smashing away at whatever encryption method the bank is using? Wasn't the 64-bit DES key just brute-forced not too long ago by distributed.net?

If you look at it, the potential gains for a country to have hacked the secruity protocols for the transaction server would far outweigh the initial cost. Throw two or three million dollars into a cluster of PIIIs, and just let them work. It doesn't have to happen in a day. They could take a year before they finally break the key. But when they finally do it, they could drain your account dry. And does anyone know what type of insurance policy Swiss banks use...? I'm sure they're not backed by _our_ government...

Re:This doesn't make any sense (2)

Scola (4708) | about 15 years ago | (#1670791)

...and that assumes that the potential cracker can even get to the machine on which the data resides. The big boys, especially the Swiss, are really paranoid. If you can find your way through the packet filtering going on at the router, a couple of firewalls between the different servers (web, DB, a middle-man, ect.) and most likely a B1 Trusted OS, and then you can break a bit of cryptography, then you can start dealing with the issues you describe. Simply put, good luck, but the time could probably be used better elsewhere.

Nobody who is worth their weight in shit relies upon just one level of security when serious financial transactions are happening (and no the exhange of two-fitty for a box of baked beans on ebay does not constitute a serious financial transaction). The big swiss banks have a record of security to protect. Their lure is security. Even when the world goes to hell in a bucket, your money will stay safe in Switzerland. That's how they make the huge profits and get people to line up to open accounts when their level of interest in miniscule. The swiss aren't going to play any games. Putting your money in an online account in a big swiss bank is probably ten times *more* secure and *safer* than giving your money to some two-bit tellar at your local bank, and letting that bank keep it for you. The guy at the window at an American bank has a lot of power. How the hell do you think they give money to you. They know how much money you have, and can take it out of your account on the fly. Serious people don't do this. Things are handled on a need-to-know basis, and most minions in the big banks don't need to know much.

Re:I have been using Swiss Banking for 3 months no (0)

maskatron (7560) | about 15 years ago | (#1670792)

"Who cares though, who here doesn't have their money spent before they get it anyways."

yeah, it's funny you should mention that. half of my paycheque is extorted from me before i can cash it...oh wait...did i say that out loud...eeek!

Re:Why does the US have to control everything? (3)

SEE (7681) | about 15 years ago | (#1670793)

People who go into government in the U.S. don't get respect, and don't get money. At low levels, you get job security. At high levels, the only incentive is power.

Everyone who is at a high level in the U.S. Government is there for the power. Maybe the reason is they want the power to do good, improve the world, and serve humanity. But, no matter why they want power, the only reward, the only great benefit, and the only reason anybody of ability and ambition goes into government work in the U.S. is power.

And then everybody's suprised for some reason when those who have acquired power try to extend it as far as possible.

Re:Questions about Swiss Bank accounts (1)

grahamm (8844) | about 15 years ago | (#1670794)

If it's non-computerized, how do they ensure reliable records? what if there's a fire?

Presumably in the same way as banks have kept reliable records since a long time before computers were invented. Don't forget that banks came a long time before computers.

Re:Not THAT big a deal. (2)

NatePuri (9870) | about 15 years ago | (#1670795)

This is true. Swiss banks have disclosure treaties with the US and the EU as a condition of joining the united Europeans.

Carribeans are the new Switzerlands.

Re:Why does the US have to control everything? (1)

Kris_J (10111) | about 15 years ago | (#1670796)

Score:3 !?! How on earth could this flamebait score 3 ?!?

CJ.

Re:democratic moderation (was Re:Why does the US.. (1)

Kris_J (10111) | about 15 years ago | (#1670797)

I meant; "How could anyone mark it up?". It wasn't actually classed as flamebait when I replied, even though it obviously was.

I'm a little concerned that something marked as flamebait by two people could also be rated as interesting or insightful by others, and ultimately rate quite highly. I think an event like this highlights on of the problems with the moderation - it only takes a couple of people to turn obvious flaimbait into something rated highly. There needs to be a higher volume of moderation to reduce the effect a single person can have.

CJ.

Re:money laundering? (1)

NMerriam (15122) | about 15 years ago | (#1670798)


That's completely untrue. An attorney who is complicit or accomplice in a crime has no attorney-client privelege (for those actions).

Otherwise, you could have your attorney drive the getaway car, or kill your spouse, or whatever, and they could never put him on the stand.

Attorney-client privlege only applies in LEGITIMATE legal relationships...

Re:money laundering? (1)

NMerriam (15122) | about 15 years ago | (#1670799)


Oh, certainly there's no basis in the cases you cited for trying to overturn the privelege. Paying money to the IRS isn't a crime, and there's no logical or legal reason you could compel an attorney to reveal why or who the money is coming from. Same with the tax stamps.

In the current context of money laundering, though, an attorney who moved money from one account to another, or deposited funds, or participated in any material way to such an activity is commiting a crime, as the activity is inherently criminal based on the origin of the money (much as passing counterfeit money is, regardless of if you made it). Paying income taxes on that money wouldn't be criminal, and could thus be done anonymously through your attorney.

Canadian use (0)

ppanon (16583) | about 15 years ago | (#1670800)

Well, there will probably be a few Canadian clients too.

First Post?

Be careful. Be VERY careful. (2)

MeanGene (17515) | about 15 years ago | (#1670801)

Does anybody here even remember the story of the "European Union Bank" from Cayman (or was it Antigua?) Islands? They registered a bank, set up a webserver and started opening accounts via credit card cash withdrawals. When they got bored, they simply pulled the plug and split. ;-)

Internet anonymuity is a double-edged sword. And, of all people, slashdotters should be aware of it.

Hear Hear! (1)

davek (18465) | about 15 years ago | (#1670802)

D'accord. Totally, when I start my country, its going to be complete lassiez-faire capitalism, free from all government regulations. The number of evils introduced by that are far less than those introduced by the suffocating restrictions of the US gov.

That said, let's remember something: how are many crime bosses caught? How was Al Capone caught? Tax evasion. Who cares what you actually did, but if you made money off of it and didn't give the fed their cut, then you lose. This is why the US is so scared of losing their hold over their citizen's income.

-davek

Re:HOWTO??? (1)

blib (18572) | about 15 years ago | (#1670803)

Guess where it can be found ??? at http://www.moneylaundering.com/ :)

Re:Swiss banks and money laundry (1)

Max von H. (19283) | about 15 years ago | (#1670804)

I just wanna add another thing. I happen to know *for sure* that one of the biggest Geneva private banks has accorded a *huge* loan to the government of the US of A. If this bank claimed today for the entire amount of the loan, the so-nice American Govt would file for bankrupcy immediately.

So, I'd also would like to ask story posters to think twice before writing shit about a country they've only heard of in tabloids.

Swiss banks and money laundry (3)

Max von H. (19283) | about 15 years ago | (#1670805)

"In a move that should make it easier to launder money on the internet."

What the hell does that mean? I'm a Swiss citizen and I'm quite fed-up with the systematic association most americans do between crime and my country. I'm sure most US banks have their nasty past as well, but it's oh-so-easy to bash that little country in the middle of nowhere (Europe, that's nowhere to you). I'd like my country to be remembered for different things, such as the WWW itself (T. Berners-Lee invented it at the CERN, near Geneva) or the many hi tech innovations achieved by our universities.

Our banks are, at least officially, doing everything in their power as to stop money laundring activities. Nothing I can personaly do about it. And I happen to have a few Swiss bank accounts.

We happen to have electronic banking in Switzerland, and we've had it for way over 10 years now. I think it's just normal the banks offer the same service to their international customers. And hell if your IRS gets an ulcere, who likes them anyway?

So guys, please revise your stereotypes for once, it's getting a bit tiring. Otherwise I'm gonna start talking about how your big US corporations prefer having the work done by Chinese slave workers.

Re:Not...Other OSbanks online.. (1)

RobSweeney (19353) | about 15 years ago | (#1670806)

One word: "Baring's". No bank's financial strength is beyond question.

Not THAT big a deal. (3)

Tarnar (20289) | about 15 years ago | (#1670807)

Swiss authorities are becoming more lenient with Swiss bank account information of late. Your safer bets are in the Cayman Islands if you're evading taxes.

Re:Laundering money (1)

Dan B. (20610) | about 15 years ago | (#1670808)

Or a coffee shop. But trust me when I say store based laundering operations go down pretty quick. It's only the smart ones that actually get away with it...

kinda like crime in general really.

Re:What's the point in laundering? (1)

Dan B. (20610) | about 15 years ago | (#1670809)

To avoid paying tax you have to go and work somewhere that doesn't tax income. Such places exist, but unless you are a multimillionaire you will probably find that by the time you have paid for armed guards, personal health care and all the other bits and pieces of a civilised life, you would have found it cheaper to stay where you were.

Actually, Vanautu is a lovely place to live/work. Now, if I could work out a way of setting up a Vanautu Co. on the 'net, paying me every cent it earns (no income tax) and then being able to work remotely from any place in the world... Now that would be cool.

Crack away baby! (2)

Dan B. (20610) | about 15 years ago | (#1670810)

What's the point of putting all that power in to finding one password/encryption key. Say you do crack it, what will you find? In the couple of minutes of freedom you have snooping around, a) you have to find an account with substantial funds, and b) transfer it to your own account.

Easy! NOT.

Laundering money (4)

Dan B. (20610) | about 15 years ago | (#1670811)

... make it easier to launder money on the internet"

Hello? Anybody home? You can't launder electronic cash you fool. The purpose of laundering is to turn cold hard cash in to legitimate earnings. Biggest launderers are obviously criminals (drugs, stolen good, fraudsters, etc). I think what you may mean is "make it easier to put away illegal earnings".

BTW, the easiest way to launder money is to go to Las Vegas (If you're a US resident) or any other casino, buy $9,000 worth of chips from every teller until all your cash is chips, stay 3 days and cash in your chips that you "won". The Casino pays out all transaction over $1000 in cheques, and report all transactions over $10,000. Hint: Don't cash in more than $10,000. Now, take your 10 cheques for $9,500 in to 10 different banks and deposit the winnings. After that, then you can transfer it to your Swiss bank account so the money is there when you get out of jail .

Re:What about security? (1)

maan (21073) | about 15 years ago | (#1670812)

Swiss banks were among the first to implement 128 bit ciphers over the web for maximum security. I know...that doesn't guarantee anything, but it's reassuring.Maan

Single World economy (1)

blizzard (22837) | about 15 years ago | (#1670813)

I think what we are starting to see here is maybe the start of a single world economy? The Internet is making the world such a very small place.

This isn't that important... (2)

osmanb (23242) | about 15 years ago | (#1670814)

I saw this elsewhere a little while ago...

Everyone seems to be so happy that they too can open a swiss bank account with only $5000. I've got news for you: If all you have to start your account is $5000, you're not saving that much in taxes by doing this. It's a risk/reward trade-off, and you'd have to be a moron to think it's worth it.

Anybody that actually stands to gain (from the tax-evasion persepctive) by putting their money in swiss accounts, has much more money, and doesn't do it via the web. (They fly to Switzerland in their private jet.)

-Brian

I have been using Swiss Banking for 3 months now. (0)

Pengo (28814) | about 15 years ago | (#1670815)

*Yawn*


For less than 2k you can fly out to Zurich.

For less than 200 dollars, you can make open an account.

I just moved to switzerland 3 months ago from the US, I got setup with the Thurgau Kantonal bank and didn't need more than 30 bucks to get started. It has online banking as well.

If you fly out and make a cash deposit in a numbered account, the US government can't get to you.


I think the Govt. would have an easier time tracking down where the cash came from . Unless you have some serious cash accounts, and a very dirty accountant.. it will be hard to evade a REALLY good audit with any serious amount of money.

Who cares though, who here doesn't have their money spent before they get it anyways.

Re:Why does the US have to control everything? (1)

PigleT (28894) | about 15 years ago | (#1670816)

I've also wondered about this 'control' thing - it appears bigtime in encryption, and carries on into trade wars (cows eating the wrong kind of bananas, was it? :) , etc.
Always "Uncle Sam knows best" syndrome, and there's one big and easy counter-example I could throw in to blow the idea out of the water...

Is there no way of getting those in government who have "power" to exert it responsibly, for the people's good, rather than to forward their own agendas as politicians?
(Given that voting for one party or another just brings in another load of megalomaniac politicians...)

HOWTO??? (2)

mistabobdobalina (29109) | about 15 years ago | (#1670817)

is there a money-laundering HOWTO on the web? i heard there's a MLDP (money-laundering documentation project) but its not being updated much.


(joke!)

Re:Laundering money is hard and getting harder (1)

Paul Johnson (33553) | about 15 years ago | (#1670818)

Money laundering is, and always has been, difficult. The basic problem is explaining how you can afford the big house and two porsches. The only realistic way is to create a legitimate business and then hide the amount of subsidy you put into it. But even that is non-trivial because the tax-men want to look at the books in some detail, partly to make sure you are not ripping them off, and partly to cross-check what your books say against your suppliers and customers books in case they are dodging tax.

The only way to avoid this is to run a retail operation and then slide the black money into the takings, preferably while creating till rolls to account for it. But this is labour-intensive, and as soon as you bring employees into the conspiracy you create a serious security risk.

On the other hand a really detailed audit is rare. The main art in money laundering is to look sufficiently legitimate that the authorities have no particular reason to start digging. Its camouflage, not armour.

Paul.

Re:What's the point in laundering? (1)

Paul Johnson (33553) | about 15 years ago | (#1670819)

What does the name IRS mean? Internal Revenue Service, right?

I think you are confusing laundering with tax avoidance/evasion. The two are completely different things.

If you do some research into off-shore banking, you will find certain countries don't tax foreign income.

The general principle is that income is taxed in the place that it is earned. If you earn money abroad and bring it back to the UK then the UK government won't ask for tax on it: they assume it was taxed where you earned it. But if you merely try shunting money through foreign bank accounts then I think you will find the IRS still wants it's cut. To avoid paying tax you have to go and work somewhere that doesn't tax income. Such places exist, but unless you are a multimillionaire you will probably find that by the time you have paid for armed guards, personal health care and all the other bits and pieces of a civilised life, you would have found it cheaper to stay where you were.

Paul.

Swiss banks... (1)

komet (36303) | about 15 years ago | (#1670820)

All the big swiss banks as well as the post office bank have had Internet services for a while now, starting with Credit Suisse in 1996 IIRC. Almost everyone does Internet banking here, since often the charges are less. They all use 128 bit SSL, btw, as using anything less would get them into legal trouble. That's how it should be - government forcing you to use high grade encryption rather than banning it!
-komet (an englishman in switzerland)

Attorney-run bank, why not? (2)

timothy (36799) | about 15 years ago | (#1670821)

geekfuzz described a method of (de facto) laundering money thus:

1) Get an attorney
2) Have Him/Her set up a bank account for you
3) Instruct Him/Her on the handling of the account.. ie balance transfers, payments, etc.


Reading this thread is giving me more info. about money laundering that I'd ever previously had, so I am writing from a position of ignorance, but this 3-step way to relative secrecy raises a few questions for me.

1) Why not a bank run by attorneys Dewey, Heidit & Diep in which every account is run this way? i.e. you hire Messrs Dewey et al not just as bankers, but as attorneys in the particular financial affairs of your account. And they don't ask, don't tell.

2) What sort of rules govern secrecy of account info in the US? Are these rules based in part on eligibility for FDIC insurance? If so, what if my richest friend and I wanted to start a non-FDIC-insured bank? Realizing that such a bank would probably ;) lack appeal to many people and discounting that particular thing, what rules would our new bank have to follow in regards to privacy? Would our records need to be open at all times for arbitrary inspections, or would we 'merely' be required to hand over forthwith any records named in a warrant?

Insight appreciated,

timothy

Swiss banks being truly secret? (1)

GMontag (42283) | about 15 years ago | (#1670822)

This has been a total myth for ages. The equivelant of the "Good Times" virus for banking.

Swiss authorities have always cooperated with US investigators, you might as well "hide" your money in a US bank, since they roll over almost as easy, but everybody knows it.

Why does the US have to control everything? (3)

thetech (44732) | about 15 years ago | (#1670823)

What is it with the American Government and control? They seem to have their hands in just about every conflict out there, trying desperately to control the paths other nations take. Is it based on the belief that they actually know what's best for the world? Does the American government actually believe that it is morally superior to other countries, and that it's laws should be of paramount concern? Obviously the US government has no notion of privacy, but how far is it willing to go? The States seem to be more and more dictatorial when dealing with independent nations, and also when dealing with its own citizens. Are the works of authors such as Orwell required reading for highly placed government jobs?
--

MFC Merchant Bank (4)

drivers (45076) | about 15 years ago | (#1670824)

What self respecting slashdotter is going to trust their money to something called MFC Merchant Bank?

:-) for the humor impaired :-)

Makes one think ... (4)

Somnus (46089) | about 15 years ago | (#1670825)

Why is this story even news? There are many banks in the United States (e.g. Wingspan) that offer full Internet service, and I would not be surprised if they have foreign clients.

What's news is that a foreign agent is offering these services to Americans -- your money is growing delocalized. The IRS can audit your house, your cars, your mistresses and your drugs because they all have to be near your person. With the advent of speed-of-light communication (i.e. asset/information transfer) and, more importantly, authentication and security, the scrutiny over your assets is growing more and more ethereal.

Hence, one realizes that the US, more than anything, else, is the dominant controlling entity in the arena of world finance -- this pisses me off, because it is counter to the notion of laissez-faire (sp?) capitalism that I hold dear, and I think America should return to. The most insulting aspect of this is that the powers-that-be cast this control as "stability" -- Alan Greenspan will tell you that he is a macropsychologist more than an economist. Damn patronizing.

I hope security technology, Internet banking and private currency continues to grow, and bulldoze the attitudes of naivete in the masses and power-inebriation in the controlling "economists."

Please feel free to deride me as an optimist.


*** Proven iconoclast, aspiring bohemian. ***

Re:Hear Hear! (1)

Mr. Slippery (47854) | about 15 years ago | (#1670826)

Totally, when I start my country, its going to be complete lassiez-faire capitalism, free from all government regulations.
So you'd remove creations of the State such as corporations, intellectual property, and land and natual resource ownership? It would be an interesting sort of capitalism.

Re:What kind of guaruntees on this? (2)

weave (48069) | about 15 years ago | (#1670827)

Internet-accessible bank accounts have always given me pause for thought. What happens if you _need_ the money in the account, and their server is down due to a crash or a DoS attack, or some hardware failure? What happens if security is breeched?

I've had all of my stash at www.sfnb.com for years now. They were the first Internet-only bank and I jumped at the chance to open an account with them.

So, if you did break into my account, what would you do? Write yourself a check and have it mailed to your house? Transfer my money into your account?

I'm not saying it's not without risk. You could, if you wanted to be a dick, transfer $10,000 out of my savings into my checking, then write out a check on-line for $10,000 to your favorite charity.

Or, sell something big you don't own on e-bay, get the cash from the buyer through an escrow service, then buy the product from somewhere else, use my account's funds to pay for it, then have the product shipped to the ebay buyer's house, then escrow service releases money to you when buyer gets the product you never owned. (sound familiar?)

OK, damn, never mind, it can be risky. Great, excuse me while I got change my password again.

But I still don't see net banking as much of a security risk as debit/ATM cards where possession of a tiny 4-digit code and card can get you instant cash from the account.

Re:money laundering? (1)

WowMan (50187) | about 15 years ago | (#1670828)

Do you know of any case law that has supported the Attorney-Client privelage under these circumstances? I.E. The Feds lost their case?

Re:Super Swiss Security (1)

bsiggers (57684) | about 15 years ago | (#1670829)

I think you're talking about a special bank over in Switzerland called Coutts & Co. that the Queen of England used to have an account with. They don't actually work that way anymore (but only since about ten years or so)

And don't forget that not everyone in Switzerland is a millionaire... there are banks for regular people as well. Even if you're only a foreigner staying in Switzerland for an extended period of time.

Don't assume anything as far as technical security goes, though - having worked on several internet banking projects in Switzerland, I've noticed that the security problems are pretty much evenly distributed worldwide.

They do get the trains arriving on time, though.

Re:HEllo (1)

barleyguy (64202) | about 15 years ago | (#1670830)

You forgot to give your e-mail address. :-)

Just kidding.

Swiss banks blah blah blah (1)

cricetus (66858) | about 15 years ago | (#1670831)

What nobody seems to have mentioned is that this is a merchant bank. The point of depositing money is to allow you to trade on NASDAQ etc. online. Just like Schwab, ETrade et al. So a lot of the money will be flowing _in_ to the US from Europe in effect. You could launder money this way, but as someone else has pointed out, opening a pizza shop is probably a better bet. Its not that cheap to trade in the US from Europe so the $29.95 per trade they are offering will find an audience I suspect.

Re:Wingspan: "No foreigners!" (1)

UnknownSoldier (67820) | about 15 years ago | (#1670832)

> Wingspan refuses to open accounts for foreign clients

Not quite true. Non-Resident Aliens can open a Non-Interest Bearing account if they really need a US bank account.

Re:Canadian use (1)

UnknownSoldier (67820) | about 15 years ago | (#1670833)

Uhm, that wouldn't be a good idea as the Swiss banks WILL turn over records to the Canadian and US governments.

You would be better off using other Off-shore banks like the Isle of Man ones.

What's the point in laundering? (1)

UnknownSoldier (67820) | about 15 years ago | (#1670834)

What does the name IRS mean?
Internal Revenue Service, right?

Doesn't it seem logical that one could legally be External ?

You don't need to launder money to avoid the tax man.

If you do some research into off-shore banking, you will find certain countries don't tax foreign income.

Re:What's the point in laundering? (1)

UnknownSoldier (67820) | about 15 years ago | (#1670835)

> I think you are confusing laundering with tax avoidance/evasion. The two are completely different things.

Sorry, I wasn't clearer. I'm well aware of the differences. It just seems that people doing the laundering are also usually caught with tax evasion. My point was: BOTH are un-needed if you check into off-shore banking.


> But if you merely try shunting money through foreign bank accounts then I think you will find the IRS still wants it's cut.

In the US you can use a W-8 form to show that your foreign company is not eligable to be taxed, BUT ONLY IF the foreign company does not have a US tax payer's identification number (TIN.) Some countries don't tax foreign income, so basically the company is able to earn money tax free. Why else do you think off-shore banking/companies are popular with millionaries?!
BTW, the foreign company WILL have a number in the jurisdiction that it is registered in, but that can not be used as a TIN outside its jurisdiction.

I have met people who have been external to the IRS for a number of years, so I know it is possible.

Work smarter, not harder.

Cheers

Re:Makes one think ... (2)

wowbagger (69688) | about 15 years ago | (#1670836)

Alan Greenspan will tell you that he is a macropsychologist more than an economist


I cannot remember the show, other than it was on PBS, but they were interviewing a FED economist and he said something that cause me to have an epiphany. What he said was something like:


We have all this information, and we should use it to provide feedback...


Now, I'm an electrical engineer, and feedback is something I understand far better than any economist. One of the things you learn in control systems theory is that a system with lots of phase lag (i.e. it takes a long time from control input to response output) will be unstable if the loop feedback isn't lowpass filtered. The economy has a great deal of lag to it, but the FED's reactions to the vagarities of the market is almost instantanious. Also, you don't hit a system with step functions (sudden changes from one value to another) unless you want it to ring. The FED always makes step changes in the prime rate. Result: instablity.


My solution: The FED should be required to make all changes over a long period (say, six months), with a small increment each week. This would do two things:

  1. The market would not panic everytime Greenspan clears his throat.
  2. The power of the FED would be reduced
  3. The system would be more stable


Of course, since the FED would lose power under my plan, that is exactly why it will never happen.

money laundering? (2)

geekfuzz (71255) | about 15 years ago | (#1670837)

Look, the old days of laundering money with cash through a front are nearly extinct. Yes, law enforcement agencies find it every once in a while, but in general it's just too easy to catch. The most common modern way is this:

1) Get an attorney
2) Have Him/Her set up a bank account for you
3) Instruct Him/Her on the handling of the account.. ie balance transfers, payments, etc.

Thus, everything you do regarding your money is protected by the attorney-client priviledge. Yes, whatever government is looking at you can get bank records, but they can never make your or your attorney say a word...

our wonderful government (1)

MillMan (85400) | about 15 years ago | (#1670838)

Boy, they sure like to control us eh? Too bad the internet is changing all that. Even as the web seems to be mutating into some sort of capitalistic commercial, I see articles like this all the time. This article helps demonstrate the governments dwindling control over other countries. I love it. I can't say the same for the citizens, since they're using similar technologies to keep there control over us. I don't hate this country, but frankly our gov't has been pushing people around for too long.

On a somewhat unrealted note, if our gov't deems computers with clock speeds over 1 GHz to be capable of helping design nuclear weapons, who is to say every country in the world won't have some nuclear device in 30 years? I think the playing field is being leveled really fast. I hope it settles without the world blowing up. Unfortunatly people don't give up power easily...

Level playing fields are a good thing. Somehow I thought that had something to do with democracy.

Why README?!?!?! (1)

jsm2 (89962) | about 15 years ago | (#1670839)

Well, because I had included some important background info on this bank. But then I decided to post it higher up, here [209.207.224.40] .

Sorry to waste your time, really

jsm

Re:Coutts (1)

jsm2 (89962) | about 15 years ago | (#1670840)

Coutts & Co. are as English as one could reasonably expect, and are owned by the National Westminster Bank. They don't use pen and paper bankers' books - they have the same transactions processing software as the rest of the NatWest group.

But they are bankers to the Queen (and to my immediate boss), and they will give you a handwritten statement if you want one.

Good point about there being Swiss banks and "Swiss banks" -- the vast majority of the domestic market is served by Kantonalbanks, which are similar to US Savings and Loan institutions. I was talking about the "high end" of the banking market. I utterly agree with you about security problems.

Sweet trains, though, I agree.

jsm

Super Swiss Security (2)

jsm2 (89962) | about 15 years ago | (#1670841)

Of course, if you have an account with a real Swiss Bank (clue: you'll need an initial deposit a touch more than $5000, and I doubt they'll be advertising on slashdot, or anywhere else for that matter), then the method of record keeping is safe from all manner of computer attacks.

That's because they write down your balance in a ledger. With a fountain pen. (I kid you not, I've seen it done). And that is the banker's book. You pay through the nose for a full-service Swiss bank account, but you get total confidentiality, and you don't have to worry about computer security.

If, on the other hand, you sign up for a spivvy online banking service, then I for one would definitely not just assume that it's any more secure than Hotmail. I would do plenty of due diligence (for starters, I'd check whether they're members of the Swiss Bankers' Association) before I started trusting them to the extent I would a Swiss banker. It could be that all you're getting is the same service as your local American bank, but with a flashy .ch address.

jsm

Re:Swiss banks and money laundry (README!!) (2)

jsm2 (89962) | about 15 years ago | (#1670842)

hrrmmmm ... I don't think it does anyone any favours to pretend that a lot of money laundry doesn't go on in Switzerland.

And I happen to have a few Swiss bank accounts.

If you're living in Switzerland, I'll bet that your accounts are either with UBS or Credit Suisse, or with the local Kantonalbank. That's a different kettle of rostis from what we're talking about here, which is the Geneva and Zurich private banks. These banks sell a product, and that product is secrecy, and a fair proportion of the people who are prepared to pay for secrecy want it for some nefarious purpose.

There are utterly legitimate reasons for wanting a secret bank account (if I was a Chinese businessman living in Indonesia, I'd want one, for example), but these are definitely the exception rather than the rule.

It's true that Switzerland has cleaned up its act of late, and now has decent money laundering laws. It's not a real den of laundering like some of the West Indies financial centres. But it still comes with the territory.

jsm

PS: I'd prefer to remember Switzerland for the Jungfrau and for Lake Neuchatel.

Re:Laundering money (4)

jsm2 (89962) | about 15 years ago | (#1670843)

No, I think you're being too harsh on this one. The Swiss Internet account would be very useful in the "rinse cycle" of a laundering operation. If you'd already introduced your dirty money (not just cash -- the results of wire fraud and securities stings also need to be laundered) into the banking system in, say, Colombia, then you would still need to get it to a more respectable jurisdiction if you didn't want to attract raised eyebrows when it came back into the US. An internet-available Swiss account would be very useful for this -- big transfers coming in from Switzerland are not subjected to anything like the same sort of scrutiny as transfers coming in from, say, Antigua.

Oh yeah, and your casino idea is strictly small-time. You could do it a couple of times, but before long, the casinos would begin to recognise you, and on your next visit to Vegas, you'd be greeted by a Secret Service man asking about your strange unwillingness to gamble. Believe me, it happens -- the casinos' obligation to report suspected money launderers does not start at $10,000, and they have very good systems for keeping track of "funny" behaviour, developed to catch card-counters.

You'd be better off actually gambling with that money to cover your tracks. If you lost less than 40% of your initial stake, you'd be paying well below what is considered the market price for laundered funds.

But the classic method of money laundering is to open a pizza restaurant. It's very hard for a lawman to estimate how much pizza you sell, so make lousy pizzas, but claim to the IRS that you're doing a roaring trade. Then you have a very good excuse for having loads of cash round the shop, and it will be tax-paid and for all practical purposes clean. (And even if the IRS catches you, they are legally prohibited from grassing you up to the Feds -- strange but true)

jsm

More detail on this particular bank (4)

jsm2 (89962) | about 15 years ago | (#1670844)

A few things don't quite add up here ... as far as I'm aware, they should not be advertising broking services into the US without prior approval by the SEC. (From the article cited)

The Securities and Exchange Commission, meanwhile, has blocked the bank's plans to let U.S. residents place trades through the accounts.

I also note that MFC Merchant Bank SA is owned by a company with quotes on NASDAQ and the Frankfurt Neuer Markt, which makes it very atypical for a Swiss bank (almost all of which are partnerships). And their main service appears to be discount brokerage in American equities, which once more doesn't scream "Swiss Bank" to me.

[brief pause]

Yup, I was right. A quick trawl through EDGAR [sec.gov] reveals that they're a subsidiary of MFC Bancorp, incorporated in Yukon Territory of Canada. They used to be part of Mercer (the paper and pulp people) and now they're a Swiss Bank, having bought an operation from an unnamed vendor and then acquired the shell of an insolvent Swiss bank: (from 20-F report)
In September 1997, the Company acquired all of the shares of Bank Rinderknecht AG ("BRA") for approximately U.S.$7.0 million. BRA, headquartered in Zurich, Switzerland, was active in private banking and securities trading for Swiss and foreign customers since 1870. BRA had been placed in liquidation by the Swiss Federal Banking Commission in August 1997.


The other major asset of this company is a sizeable interest in the Wabush Iron Ore mine in Newfoundland, for those who care.

Far be it from me to say "bunch of opportunists cashing in on the good name of Swiss banking", but if the cap fits . . .

I'm not casting any aspersions on this firm -- the fact that they're regulated by the Swiss authorities provides a baseline guarantee that they're a legitimate bank -- one cannot just march into Geneva and set up business without any checks. But they are not, IMO, a "proper" Swiss bank of the kind you read about in James Bond novels. Everyone should do their own due diligence before making an investment decision -- you should check out the 20-F I linked to, at least, before moving any of your money.

jsm

Re:Not...Other OSbanks online.. (5)

jsm2 (89962) | about 15 years ago | (#1670845)

www.bil.lu is Banque Internationale a Luxembourg, which is a subsidiary of the Dexia group, while fortisbank.lu is a member of the Fortis group. Both of these are well-known international banking groups whose financial strength is beyond question. I've never heard of Robecobank, so I can't commment on that.

AC's post on the tax/secrecy regime in Luxembourg is broadly right, but I have to make two caveats:

1)The bank secrecy in Luxembourg is not as total as AC implies -- Luxembourg is fully compliant with the EU's Money Laundering Directive, so if it suspects that you are laundering money, it will give up your details (end of story). That includes tax evasion, but it will usually only grass you for this in response to a specific inquiry from domestic tax authorities.

2) It has to be said that Luxembourg's tax haven status is not definitely secure for all time. It is a source of vast irritation to the Germans that Luxembourg bank accounts siphon off a material chunk of their potential tax base. Because of this, there are negotiations underway to introduce a common withholding tax in Europe, in which case Luxembourg would be obliged to deduct a proportion of your tax at source.

If you're serious about banking secrecy, then Austria is the place for you, as you can still get proper numbered bank accounts there if you hurry -- ("proper" numbered accounts are ones where literally nobody knows your name, as opposed to Swiss accounts where the CEO of the bank has a ledger of names vs. numbers). It's entirely illegal under EU law, but the Austrians have been dragging their feet on implementation.

Or, if you want to be really secret, a bank in Antigua is the current vehicle of choice. But don't come running to me when they disappear with your money.

jsm

Ask Slashdot: Anonymous banking (5)

jsm2 (89962) | about 15 years ago | (#1670846)

If nobody knows your name how do they identify you, and how do you transfer money, etc?

In the words of Tim Rice and Andrew Lloyd Webber:

Oh what bliss to sign your cheques as 3-1-0-2-7!
Never been an account in the name of Eva Peron!


(from Evita)

Basically, you can sign a cheque with your number instead of your name (you may want to go to a big bank to do this rather than your local Wells Fargo). Or you can ask for money to be transferred from your anonymous account to your checking account. To do this, you'll need to know the a/c number, plus probably a password arranged with your banker.

But you shouldn't really be using a Swiss a/c for your everyday bank account. It's only worthwhile if you're only occasionally withdrawing money to buy a boat, or because your family has just been made refugees by a coup (a good reason for bank secrecy). Or something else which would make the trip to Switzerland worthwhile. A really good banker will meet you anywhere in the world with a suitcase full of cash, although this service costs a bit more.

Is this done on the phone? How do they know you, by your voice? What if the person who recognizes you is dead - how do you carry out transactions?

See above. Passwords are sometimes used, or the banker may indeed recognise your voice, or you may prefer to do business face to face. The death of your banker is a serious problem -- that's not a silly question at all, and is a real problem for the industry -- they will usually have a secondary banker assigned to your account. When a senior Swiss banker has a heart attack or something, it's a real crisis for a Swiss bank; they have to work some serious overtime sorting out his accounts.

And...what if the ledger of names/numbers gets burned in a fire? Billions of dollars in one book lost?

In principle, yes. In practice, the Swiss solution to this is "well don't let it get burned then". It would probably be possible to reconstruct about 70% of the book from other records, but there would be a real problem here.

The price of secrecy is that you forgo a lot of these safeguards. There is a huge pool of "orphan assets" in the Swiss banking system (including, scandalously, a lot of accounts of German Jews which went dormant in the 1930s). It's quite possible to lose money in the system entirely -- and unless your heirs know exactly the right questions to ask of your bankers, they'll never admit to the account's existence.

I once seriously considered giving up my job and working as a "treasure hunter" in the Swiss banking system, to help people look for this kind of asset. But you really need a Swiss lawyer's certificate to be in that kind of business. So I took up programming instead.

jsm

Swiss Bank Privacy (2)

ellbee (93668) | about 15 years ago | (#1670847)

Swiss banks accounts come in many flavors; the most famous is the "numbered" account where only one bank official keeps a (non-compterized) record of who actually has power over the account. Most Swiss bank accounts are just like an account anywhere else, except they're covered by Swiss banking laws which make it more difficult for investigators to gain access to records. Over the past few years Swiss banks have become much more cooperative with international law enforcement (especially drug laundering), though they're much more private than American banks. Unless you make the transfer with cash US authorities should be able to follow Internet transactions even if they're into foreign accounts.

Re: The Future of Banking... (1)

cityclerk (93966) | about 15 years ago | (#1670848)

The FATF are trying to ensure that in the future all governments "Know Their Customers'" assets are within reach. How soon before the Sparbuch as we know it becomes a distant memory? Well it could become distant memory pretty soon, distant digital memory [zolatimes.com] ...

The Global Financial Jackboot [zolatimes.com]

Concepts in Digital Cash [zolatimes.com]

Digital Cash and the Regulators [zolatimes.com]

More by Grabbe here [zolatimes.com]

---

jsm, please drop me a line.

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