[fc-discuss] Financial Cryptography Update: What happens when you don't do due diligence...

iang@iang.org iang@iang.org
Thu, 20 Oct 2005 16:32:41 +0100 (BST)

 Financial Cryptography Update: What happens when you don't do due diligence... 

                            October 20, 2005




A story doing the rounds shows how money laundering is now being used
to open up security in banks.  The power of the money laundering
bureaucrats is now so unquestioned that mere mention of it and a
plausible pretence at it allows anyone to do the craziest things to


AN INGENIOUS fraudster is believed to be sunning himself on a beach
after persuading leading banks to pay him more than 5 million (3.5
million) in the belief that he was a secret service agent engaged in
the fight against terrorist money-laundering. 
The man, described by detectives as the greatest conman they had
encountered, convinced one bank manager to leave him 358,000 in the
lavatories of a Parisian bar. "This man is going to become a hero if he
isn't caught quickly," an officer said. "The case is exceptional,
perfectly unbelievable and surreal."

In another case he did it with wires to Estonia, but had to sacrifice
his wife and mother-in-law in the process:

A third payment of 5.18 million was made to an account in Estonia.
This time Gilbert was quicker. Police identified him by tracing his
calls, but by the time they caught up with him he was in Israel. 
They arrested his wife and mother-in-law at the family home outside
Paris. They deny acting as accomplices.

Can you hear the mother-in-law screaming "I told you he was a
SCHMUCK!?!"  Read the whole thing - it's a salutory lesson in how
governance is done not by blindly doing what bureaucrats and experts
think is a good idea, but by thinking on your feet and doing your own
due diligence.	In this case, it is somewhat unbelievable that the
banks did not do the due diligence on this chap, but I suppose they
were waiting for an invitation!

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