The Age Of FATCA Is Upon Us: Credit Suisse Admits Guilt For Money Laundering

Wednesday, May 21, 2014
By Paul Martin

Jeff Berwick
Wednesday, May 21, 2014

As Credit Suisse (CS) pled guilty for conspiring to aid US tax evasion and swallowed $2.6 billion in fines in federal court in Alexandria, Va., Eric Holder sensed the historic moment he oversaw – a new precedent for US extortion. UBS paid “only” $885 million when it misrepresented mortgage-backed bonds during the housing bubble. Surely, as CS swallows these new fines, banks the world over are shuddering.

What perhaps makes the situation more interesting than the exorbitant fine is the fact that a financial institution was forced to plead guilty of criminal acts. It took months to determine the penalty, which, against the bank’s will, includes a monitor henceforth placed on the bank’s operations. Credit Suisse is the largest financial company in 20 years to plead guilty to the non-crime of “money laundering.”

The plea marks the end of an era. One of the shell entities implicated, according to the government, dated back a century – or just after the creation of the federal tax code and the income tax.

Of the $2.6 billion fine, The Department of Justice will receive $1.8 billion and New York State’s top financial regulator, Benjamin Lawsky, will receive $715 million of the stolen loot.

“This case shows that no financial institution, no matter its size or global reach, is above the law,” Eric Holder said. “A company’s profitability or market share can never and will never be used as a shield from prosecution or penalty. And this action should put that misguided notion definitively to rest.”

With the Foreign Account Tax Compliance Act (FATCA) coming into full effect on January 1, 2016, and the US government actively prosecuting banks, only savvy Americans will be able to find financial institutions abroad to service them. We saw this coming at The Dollar Vigilante Blog, and have written about it extensively. Europe will not be a better place to be than the US, and not just because the US sees itself as the world’s police officer. The European Union wants to steal the savings of Europe, and is currently paving the way to make this possible, just like the US. Only the most astute of money managers will survive The End Of The Monetary System As We Know It (TEOTMSAWKI). That means being sensitive and open-minded to the changing economic climate and being very aware of all of the rapid changes descending upon the world banking system.

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