"The biggest bank heist in history"

[Brigantia]

I've just come across this fascinating YT video from The Economist uploaded 3 months ago, titled 'The biggest bank heist in history - and why you've never heard of it".

In 2021-2022, the equivalent of 3.5 billion USD disappeared from Iraq's tax office from an account that held tax payments that could be eligible for rebate. Much of it was deposited by foreign contractors who never bothered to retrieve it as the bureaucracy to do so was so complicated. It's a fascinating case of corruption in high political places, a corrupt 'untouchable' businessman who nobody would challenge if they valued their life, and suspected collusion between Iraq's two opposing political parties.

Reading the comments, people mention many other high corruption allegations from around the globe. EU bureaucrats must be looking on with envy as only a few millions go unaccounted for from their accounts each year.

No wonder the rich are getting richer and there is so much poverty amongst the rest of us.

The vid is 18 minutes long.


http://www.youtube.com/watch?v=V4-8WDPyS7U

[ramus]

I think this tops all heist so far........

---------------------------------------------
BACK GROUND ON THE CRIME

http://www.usnews.com/opinion/blogs/...-bank-scandals

LIBOR Fraud May Be the Mother of All Bank Scandals
An estimated $1.5 trillion was stolen from customers in the LIBOR scandal.
By James Rickards
July 23, 2012, at 4:30 p.m.
+ More

FE_120702_barclays.jpg
A view of Barclay's headquarter at London's Canary Wharf financial district, Thursday, June 28, 2012. Barclays PLC and its subsidiaries will pay about 453 million US dollars to settle charges that they tried to manipulate interest rates that can affect how much people pay for loans to attend college or buy a house. Britain's Barclays is one of several major banks reportedly under investigation for such violations.

James Rickards is a hedge fund manager in New York City and the author of “Currency Wars: The Making of the Next Global Crisis” from Portfolio/Penguin. Follow him on Twitter at @JamesGRickards.

Investors have by now heard of the LIBOR scandal engulfing the banking industry. LIBOR stands for the London Interbank Offered Rate. To some it may be just the latest entry on a list of bank frauds and blunders in recent years, from mortgage scams to MF Global and the London Whale.

In fact, this may be the mother of all scandals—the one that finally leads to criminal charges and the insolvency of major banks. The fraud is breathtakingly easy to understand once past a small amount of jargon. Indeed, the simplicity of the fraud is the greatest threat to the perpetrators because here at last is a fraud that is easy for juries to understand and for prosecutors to prove.

LIBOR is the interest rate at which top-tier banks in London offer to lend to each other on an unsecured basis. The loans are usually short term, typically a day, a week, or several months. Historically the banks in the LIBOR market were among the strongest credits in the world and this type of lending was considered extremely low risk. As a result, LIBOR was among the lowest interest rates available in the market. Other interest rates including corporate loans were benchmarked to LIBOR and expressed as a spread, such as LIBOR plus 1 percent. LIBOR became the base rate used in calculating a vast number of other products and transactions.


LIBOR is set by a committee of banks sending their estimates of the rate at which they could borrow to a trade association. The banks on the committee are among the largest in the world including J.P. Morgan, Citibank, and Bank of America. The trade association would discard the highest and lowest rates and average the rest to arrive at the official LIBOR. This would then be published on financial news services. Payments due under LIBOR transactions would be calculated using that published rate.

We now know that some of the banks on the committee lied about the rates for a period of six years from 2005 to 2010, perhaps longer. The lies had two purposes. The first was to make money for the bank by lowering what it had to pay on LIBOR-based contracts. This is a kind of direct theft from customers. The second reason involved hiding the fact that some banks were being asked to pay high rates during the Panic of 2008. This is considered a sign of distress. By lowering the reported rate, the banks were made to appear healthier than they were and committed a fraud on the market as a whole.

We also know that regulators acted as aiders and abettors of the fraud by ignoring clear signs, including admissions by the banks themselves, that the rates were rigged. Regulators passed vague proposals back and forth about the need to improve practices instead of calling law enforcement agencies to investigate and prosecute the crimes.

[See an opinion slide show of 10 wasteful stimulus projects.]

One might expect that the scandal will follow the familiar pattern of bogus bank contrition, slaps on the wrist, large but not life-threatening fines, and pious promises not to do it again soon to be ignored. In short, it's just another scandal.

But this time it's different and here's why: The sheer volume of contracts based on LIBOR defies the imagination. Estimates vary, but $500 trillion seems reasonable. Even if the banks lied by as little as one-tenth of 1 percent, that percentage applied to $500 trillion multiplied by the six years of the fraud comes to $3 trillion stolen from customers. Cutting that amount in half to allow for the fact that some customers benefited from the fraud while others lost still gives implied damages of $1.5 trillion, greater than the combined capital of all of the too-big-too-fail banks in the United States. Taken to the full extent of the law, these damages are enough to render a large segment of the global banking system insolvent. These damages will be pursued not by regulators, but in private lawsuits by class action lawyers.

Bank defendants in cases like this typically ask a judge to dismiss the case because the claims are too vague. However, the facts in this case have already been made plain by Barclays, which is the one large bank to settle its case with the regulators. Once the plaintiffs get past the motion to dismiss, they begin discovery, which gives the class action lawyers access to internal E-mails, tape recordings, depositions, and other books and records of the perpetrator banks. Based on small glimpses of the doings at Barclays, the communications of the other major bank LIBOR trading desks could be shocking.

[Read the U.S. News Debate: Does the J.P. Morgan Loss Prove the Need for Tougher Bank Regulations?]

This kind of private legal process takes years to play out. In the meantime, some arrests and criminal charges by the government seem likely. In the end, legislatures may have to intervene to limit total damages to avoid the destruction of the too-big-too-fail banks. In this sense, the LIBOR litigation may come to resemble the tobacco litigation where the big tobacco companies embraced a government-backed deal with damages of over $200 billion to avoid eventual bankruptcy in the face of state and private lawsuits.

Of course, the insolvency of a major bank in the face of LIBOR rate rigging charges cannot be ruled out. In that case, good riddance. The big banks have perpetrated a crime wave longer than that of Bonnie and Clyde. If it has taken the law this long to catch up with them, it's better late than never.

[shaberon]

LIBOR is very nearly equivalent to Original Sin. London Inter-Bank Origination Rate.


In terms of numbers, one might be able to go through some old economies and find something that would be as highly valuated if adjusted for "inflation".

Other big ones are what went missing on 9/11, and, I would also say, Covid, although being a smaller number was in fact extremely powerful.

The other thing to keep watching is the inexplicable Deutsche Bank (https://seekingalpha.com/article/4590218-deutsche-bank-42-trillion-derivatives-fears-over-exposures-way-overblown):


As you can see, the total notional derivative exposure of DB is a staggering EUR42 trillion.



Money in an account in Iraq probably did not "disappear", but went somewhere, which would more or less be a "heist". Somewhat of a difference between embezzlement and the actual destruction or loss of value or liability. So for example the Covid inflationary hike appears permanent. It is just hidden in everything. But that is a total loss of wage value by an astronomical margin.

You can get more money, but what we would also like to know is what happened to the Heirloom Grains of Iraq. Those were perhaps beyond monetary value altogether.

[Brigantia]

I think this tops all heist so far........

That's why I put the title of the thread in inverted commas so that it did not appear to be a fact, it was the title of the video and they usually have a catch-bait element. It's not surprising that there have been even larger embezzlements.