There is a news blackout on this story. Please nail this one to the foreheads of the mainstream financial press until they cover it.

There was a blurb from Bloomberg on June 17 about this incident. That article conveniently misses the fact that these bonds were headed to the Swiss Bank House of Rothschild.

Via: adnkronos.com:

U.S. Treasury documents confiscated by Italian authorities
I'm a pimpin Turtle update: English Translation of Press Release Issued by the Guardia Italiana di Finanza (Italian Financial Police) on 4 June 2009

I received two different translations and a third offer to do a translation. (Thank you, CL, A and V.) The two translations I received were similar, so I’m going to post them both here. Here is CL’s translation:

Impounded at Chiasso [place] USA securities for 96 billion euros.

249 bonds of the Federal Reserve of the United States, each with nominal value of 500 million dollars, as well as 10 Kennedy bonds each of 1 billion dollars in value, hidden in the double bootom of a suit case, for a total of a good 134 billion dollars, equal to more than 96 billion euros.

This is how much was sequestered [don't know legal implication of this term] at the internation railway station in Chiasso, at the Swiss-Italian border, functionaries of the Territorial Operational Section of Chiasso, in collaboration with soldiers/members of the Financial Police [Guardia di Finanzia] of Ponte Chiasso, during the checking of bags aimed at stopping the illegal trafficing of capital.

The amount was in the possession of to fifty year old Japanese men who had arrived at the Chiasso railway station on a train coming from Italy and who, when checked by customs, had stated that they had nothing to declare.

Instead an accurate check of the bags facilitated the discovery of the American securities, hidden in the bottom of the suitcase, in a closed section separated from the part of the bag containing personal items.

Apart from the securities the Japanese men were carrying a considerable sum of original bank documents.

Investigations are underway to establish the identity and the origin of both the bonds and the bank documents that have also been impounded. If the securities are authentic, based on regulations in place, the penalty applicable to the possessors [of the bonds] could reach 38 billion euros, equivalent to 40% of the sum in excess of the acceptable baggage allowance of 10 thousand euro.

Here’s A’s translation:

249 Federal Reserve Bonds for 500 million dollars of nominal value each, plus 10 Kennedy bonds of 1 billion dollars each was found in the hidden bottom of a suitcase for a total of 134 billion dollars, or around 96 billion euro.

That’s what has been confiscated during some checks for illicit capital traffic by operatives of Sezione Operativa Territoriale di Chiasso in the Chiasso train station, on the boundary between Italy and Switzerland, in collaboration with Guardia di Finanza del Gruppo di Ponte Chiasso.

The bonds where carried by two Japanese people in their fifties that got off in the Chiasso train station from a train coming from Italy. At customs they declared nothing of value.

An accurate search of their luggage showed up the bonds, well hidden in a special compartment of their suitcases, behind their personal effects.

In addition to the bonds the two Japanese were carrying a large amount of original banking documentation.

Investigations are underway for the bonds and the documents, which also have been confiscated, to understand their authenticity and origin. If the titles would be authentic, the administrative sanction applicable would amount 38 billion euro, equivalent to 40% of the exceeding of the maximum allowed amount of 10.000€.

—End Update—

I am requesting an accurate English translation of the press release that was issued by the Guardia Italiana di Finanza (I.... If you have the ability to provide all of us with an accurate English translation of this press release, please contact me. Here is a machine translation of the press release.

Lagavulin submitted this Asia News Italy to the Cryptogon Subreddit two days ago. Here is the full text:

06/08/2009 15:18
ASIA – ITALY
US government securities seized from Japanese nationals, not clear whether real or fake Bonds worth US$ 134.5 billion are seized. This is the largest financial smuggling case in history. But are they real? Concern over ‘funny money’ or counterfeit securities is spreading in Asia. The international press is silent.

Milan (AsiaNews) – Italy’s financial police (Guardia italiana di Finanza) has seized US bonds worth US 134.5 billion from two Japanese nationals at Chiasso (40 km from Milan) on the border between Italy and Switzerland. They include 249 US Federal Reserve bonds worth US$ 500 million each, plus ten Kennedy bonds and other US government securities worth a billion dollar each.

Italian authorities have not yet determined whether they are real or fake, but if they are real the attempt to take them into Switzerland would be the largest financial smuggling operation in history; if they are fake, the matter would be even more mind-boggling because the quality of the counterfeit work is such that the fake bonds are undistinguishable from the real ones.

What caught the policemen’s attention were the billion dollar securities. Such a large denomination is not available in regular financial and banking markets. Only states handle such amounts of money.

The question now is who could or would counterfeit or smuggle these non-negotiable bonds.

In order to stop money laundering Italian law sets a ceiling of 10,000 euros per person for importing or exporting money without declaring it. The penalty for violating the law is 40 per cent of the money seized.

If the certificates were real, for Italy it would be like hitting the jackpot. The fine alone would amount to US$ 38 billion, five times the estimated cost of rebuilding quake-devastated Abruzzi region. It would help Italy’s eliminate its public deficit.

If the certificates are fakes the two Japanese nationals could get a very lengthy jail sentence for fraud.

As soon as the seizure was made the US Embassy in Rome was informed. Italian and US secret services were called in to assist the Italian financial police.

Some important international financial newspapers had already reported on the existence of ‘funny money’ circulating on parallel, i.e. unofficial, financial markets.

For AsiaNews a few points need considering:

1. When it comes to Italy the world press has tended to focus on Italian Prime Minister Berlusconi’s personal problems rather than on stories like the bonds smuggling affair which has been front page on Italian newspapers.

2. The fear of counterfeit bonds and securities has spread across Asia with the result that real securities are also considered with suspicion.

3. During the Second World War several countries at war printed and put in circulation perfectly counterfeit enemy money. It is also historically established that some central banks, like the Bank of Italy 65 years ago, issued the same securities twice (identical registered number and code). This way they could print more money with legal tender than they officially declared. The main difference though is that 65 years ago the world was involved in a bloody war, which is not the case today.

I was not able to find ANY English language translation of this story until today.

This is from Kyodo News Service, reposted on Japan Today:

2 Japanese carrying $134 bil worth of U.S. bonds detained in Italy

Thursday 11th June, 06:18 AM JST

ROME —

Two Japanese nationals were detained by Italian financial police last week after trying to enter Switzerland with $134 billion worth of undeclared U.S. bonds, mostly Treasury bonds, an Italian daily said Wednesday. The Japanese consulate general in Milan confirmed that the detention had taken place and said it was trying to confirm with Italian authorities whether the two were indeed Japanese nationals and their identities.

According to the report in il Giornale, two unidentified Japanese in their 50s concealed the bonds, including 249 U.S. Treasury bonds each worth $500 million, in a suitcase with a false bottom that was searched by the Italian authorities June 3 when they were in Chiasso, at the border with Switzerland, about 50 kilometers north of Milan. The daily did not say on what charges they have been detained, but the two may have been detained on suspicion of attempting to take a large amount of securities out of Italy without declaring it because the paper said they had not declared the bonds.

Here is the Italian language press release from Guardia Italiana di Finanza (It...:

Sequestrati a Chiasso titoli USA per novantasei miliardi di euro
Milano, 4 giu. (Adnkronos)

Duecentoquarantanove bond della Federal Reserve statunitense, del valore nominale di 500 mln di dollari ciascuno, piu’ 10 bond Kennedy da 1 mld di dollari ciascuno, occultati nel doppio fondo di una valigia, per un totale di ben 134 mld di dollari, pari a oltre 96 mld di euro.

E’ quanto hanno sequestrato alla stazione ferroviaria internazionale di Chiasso, al confine tra Svizzera e Italia, funzionari della Sezione Operativa Territoriale di Chiasso, in collaborazione con i militari della Guardia di Finanza del Gruppo di Ponte Chiasso, nel corso dei controlli volti al contrasto del traffico illecito di capitali.

I valori erano posseduti da due cinquantenni giapponesi scesi alla stazione ferroviaria di Chiasso da un treno proveniente dall’Italia che, al momento del controllo doganale, hanno sostenuto di non avere nulla da dichiarare.

Un’accurata verifica dei bagagli ha consentito invece di trovare i titoli Usa, occultati sul fondo di una valigia, in uno scomparto chiuso e separato da quello contenente gli indumenti personali.

Oltre ai titoli, i due giapponesi trasportavano una cospicua documentazione bancaria in originale.

Per i bond e la documentazione che li accompagnava, anch’essa sottoposta a sequestro, sono in corso indagini volte a stabilirne autenticita’ e provenienza. Qualora i titoli risultassero autentici, in base alla vigente normativa, la sanzione amministrativa applicabile ai possessori potrebbe raggiungere i 38 miliardi di euro, pari al 40% della somma eccedente la franchigia ammessa di 10mila euro.