Financial Crime Online

There we go: “Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations’ drugs and crime tsar, Mr. Costa, has told the Observer.” Leave it to UNODC to help bloggers and the press to come up with interesting headlines.

The head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organized crime were “the only liquid investment capital” available to some banks in extreme financial trouble last year. A majority of the $352bn of drugs profits was absorbed into the economic system as a result.

The first indications that dirty money was finding its way were received some year and a half ago by several intelligence and law enforcement agencies according to UNODC. Some of the evidence put before UNODC indicated that gang money was used to save some banks from collapse when lending seized up, Mr Costa said.

“Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities… There were signs that some banks were rescued that way.” Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered.

Who is curious about the underlying evidence? Just some intel reports? Or actual proof of dirty billions that were used to get the economy going again? The underlying suggestion may be that banks, being close to the edge of collapse, were actually lowering the bar for new clients and/or new capital. No more questions being asked about where the millions came from because we ‘really need it’? And no one will care later because we were on a mission to save the world? That is a bit tough to swallow. Let’s wait for the actual information behind this interesting quote.

http://www.guardian.co.uk/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims