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Bonds held by Japanese in Italy nearly equal to the amount of leftover TARP funds

June 17, 2009
By Ken Worsley


Very little news has been reported since the initial discovery of two men with Japanese passports who were apparently trying to smuggle $134 billion worth of US Treasuries from Italy into Switzerland. The initial Kyodo report stated that on June 3rd:

[T]wo unidentified Japanese in their 50s concealed the bonds, including 249 U.S. Treasury bonds worth $500 million each, in a suitcase with a false bottom.

249 times $500 million is $124.5 billion. It has also been rumored that the men were carrying other bonds denominated at $1 billion. At any rate, the total amount reported, $134 billion ($134.5 billion in later reports), appears to be consistent.

That number rang a bell with me: Back in March, Treasury Secretary Timothy Geithner told ABC’s George Stephanopoulos that there was “roughly $135 billion” left in TARP funds. And, in late March, the Wall Street Journal reported that there was “about $134.5 billion” left in TARP funds.

Perhaps these counterfeiters/scammers are simply news junkies, or know someone who would be up on the news.

Edit: I just found a very interesting piece on this event by J.S. Kim over at Seeking Alpha. He brings up the TARP connection as well.

Filed Under Finance, White Collar Crime 

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Comments

12 Responses to “Bonds held by Japanese in Italy nearly equal to the amount of leftover TARP funds”

  1. JapanSoc on June 17th, 2009 2:57 am

    US Treasuries held by “Japanese” in Italy same amount as leftover TARP funds…

    The $134 billion in US Treasuries is nearly identical to the amount of funds leftover in the TARP program….

  2. Chuckles on June 17th, 2009 12:38 pm

    I smell a scam….

    http://www.signonsandiego.com/news/metro/20040910-9999-7m10bonds.html

  3. guyJean on June 17th, 2009 5:53 pm

    Others smell something fishy, too:
    http://market-ticker.denninger.net/archives/2009/06/13.html

  4. TT on June 18th, 2009 10:38 pm

    Something has to come out on this soon. They have to be fakes. Maybe the US Gov is waiting for a slow news cycle.

  5. funny money on June 19th, 2009 12:09 am

    If they’re fakes why not come straight out and say it, and punish the criminals hard? Spin it as restoring faith to the dollar since no one can fake it.

    TT, all I can think is maybe 1) The US Government is just hoping the story fades away, or 2) They have a very delicate problem on their hands that they don’t want to make public.

    I don’t see how these can be real, though that German news source in the link says they are.

  6. DS101 on June 19th, 2009 3:37 am

    Find a blog in Japanese:

    http://yamaji.iza.ne.jp/blog/entry/1091276/

    One of involved two Japanese men is Tuneo Yamauchi. He is brother-in-law of Mr. Toshirou Mutoo, former deputy Governor of Bank of Japan.

  7. Matt on June 19th, 2009 6:33 am

    Does anyone know how many bearer bonds are outstanding? I just assumed that they were all expired. $135 billion seems like an aweful lot.

  8. Ken Worsley on June 19th, 2009 9:34 am

    DS101’s comment would be interesting if true, but I cannot verify it at this time. The post claims a Mr Yamauchi Tsuneo (山内恒夫) is one of the men arrested, and that this was reported by Tuesday’s Nikkei. Searches of the Nikkei site for his name turn up no results.

    The post is also - how can I say it? Conspiracy theory-ish.

  9. Ken Worsley on June 19th, 2009 9:46 am

    Treasury says they are “clearly fakes”:

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=adc1HD7mWY4A

  10. David on June 19th, 2009 10:57 am

    JapanToday also has a writeup.

    http://www.japantoday.com/category/crime/view/consulate-in-milan-confirms-2-men-carrying-forged-us-bonds-as-japanese

    The comment I find most interesting is “Most of the bonds they were carrying were later found to be bogus, according to diplomatic sources.”. So what percentage were found to be real?

  11. Steven Towns on June 19th, 2009 11:51 pm

    It may be worth mentioning that it’s not uncommon for Japanese consulates and embassies to receive phone calls about individuals claiming to have an old bond or very high value bond in their possession and be seeking to convert it into cash. There’s usually a few minutes of confusion/buzz, until everyone’s reminded that similar unfounded stories have been heard in the past. This seems to be an extreme case, albeit with Treasuries, and probably perpetrated by syndicated crime and/or maybe even a connection to N. Korea given its known capability in counterfeiting.

  12. Ken Worsley on June 20th, 2009 12:36 am

    LA Times picks it up:

    Case of $134-billion T-bond bust fuels conspiracy theories

    And from Turner Radio Network:

    Employees of Japan Finance Ministry arrested in Italy trying to smuggle $134 Billion in U.S. Treasuries in suitcases

    The headline seems odd on this FT piece:
    Italian Mafia cashes in on fake T-bills

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