Market Overview

CIC French Bank Being Investigated for Money Laundering


Our inside banking sources tell us that the European Banking authorities are investigating Crédit Mutuel CIC Group of France, who owns CIC Swiss Bank, for helping rich French CIC Bank Clients set up Swiss Bank accounts at their wholly owned CIC Swiss Bank, headquartered in Basel, Switzerland.

French owned Crédit Mutuel CIC Group, headquartered in Paris, France, has owned the Swiss Bank for a long time, which was formerly called Bank CIAL. In 2008 the name was changed to CIC Swiss Bank.  The benefits of a French bank owning a Swiss Bank are obvious, clients wanting to open an account at a Swiss Bank could easily be served by the CIC French Bank, and that was going on for years at Crédit Mutuel CIC Group based in Paris France. 

So the stage is once again set. Will Crédit Mutuel CIC Group and CIC Swiss Bank soon find themselves embroiled in the same banking scandal as UBS Swiss Bank? Will Crédit Mutuel CIC Group and CIC Swiss Bank be forced to turn over the names of all French account holders and give up their customers to save their own hides as UBS Bank did? If history is any indication, you know what the answer is!

Money laundering in Europe is a national sport ranking right up there with Soccer.  This is largely due to the fact that many European countries are Socialist with very high tax rates, and France has one of the highest. Therefore, it’s no surprise that the rich are actively seeking to get their money out of the reach of the “tax man cometh”.  There is an old saying, “all you need to do to become successful is to find a need and fill it”. That is exactly what CIC Credit Mutual Bank did, they found a need that people were looking for and they “filled” it.  Now the rich in France could “fill” their Swiss Bank Accounts by secretly transferring their money from their CIC French bank accounts.  Crédit Mutuel CIC Group’s reasoning was sound, if they didn’t do it, then the rich would simply take their money from their CIC French bank account and put it into a Swiss Bank of their choice or an account in another country, so why not give them an option to put in into their CIC Swiss Bank?

Until recently the plan worked like a fine Swiss watch as money flowed seamlessly from CIC clients accounts in France to the CIC Swiss Bank client accounts and everyone was happy. However, as they say, all good things must come to an end. Governments have been cracking down on tax evasion and money laundering for years, however, some banks are still aiding customers in their efforts to hide their money and evade taxes. Now the spot light is on Crédit Mutuel CIC Group and their operations in Switzerland via their wholly owned CIC Swiss Bank.

A former French Minister, Jerome Cahuzac, reportedly tried to deposit about 13 million dollars into a Geneva Swiss Bank about four years ago. That scandal rocked the French Socialistic Government like a number 5 earthquake.  At first Mr. Cahuzac denied having a Swiss Bank account, telling the French Parliament, “I do not have a foreign bank account.” Then the truth came out that he did and Mr. Cahuzac had to resign in disgrace which greatly embarrassed the Socialistic Government of  President of Francois Hollande, who is earning a well-deserved title of “Confiscator the Great”.

Now another French Foreign Minister by the name of Laurent Fabius, is being accused of also having a Swiss Bank account and he is also adamantly denying it.  So here we go again as the French Government struggles to deal with another embarrassing banking scandal.  On one hand the French Government are trying to find people who have secreted money out of France into Switzerland and other countries, and on the other hand they are finding out that people in the French Government are some of the ones that have secret Swiss Bank accounts. France has no one to blame but themselves, since the rich in France are being taxed, in some cases, at over 100 percent of their income. Who in their right mind would want to put up with that outrage?

BACKGROUND of French Money Laundering Laws

Money laundering in France, and Europe in general, has been a constant and persistent problem due to the high tax rates. In spite of having Anti Money Laundering (AML) laws, the rich in France are apparently still actively engaged in trying to hide their money from the high confiscatory tax rates. The trick is getting their money out of France and into a foreign account without getting caught and charged with money laundering and tax evasion.  Therefore, the rich use a variety of schemes which include, foreign currency transactions, buying real estate, art, gold, corporate bonds, setting up businesses, creating invoices off shore which are then paid out of their bank account in France and deposited into their secret foreign bank account. There are many other creative ways to scurry money away via bank wire transfers, getting money orders and depositing those into foreign accounts. A bit of trivia for you, everyday over 1 trillion dollars are bank wired all over the world, that’s over 365 trillion in bank wires every year. It’s simply impossible for Governments to track all this money as it flies around the world. It’s referred to as “the bank wire shell game”, now you see it and now you don’t.

France criminalized money laundering that was related to drug trafficking in 1987 under Article L-627 of the Public Health Code.  Then in 1988, they amended the Code to cover financial dealings, which was made then a crime and so the crime of money laundering expanded to cover a much bigger scope.  In 1990, the French Government required that banks aid the Government in combating money laundering via the Monetary and Financial Code (MFC) and with the ratification of the 1988 UN Drug Convention.  In January 2004, the French Supreme Court ruled that people could be prosecuted for two crimes, (1) money laundering and (2) the underlying act as well. Prior to that ruling, they only could be charged with one crime.  

The 1996 amendment also requires insurance brokers to report unusual transactions and was expanded to include non-financial businesses and people who gave financial advice on purchase transactions or real estate. Then that expanded to include legal representatives, precious stone dealers, casino managers, precious metal dealers, art dealers, money changers, investment companies, estate agents, and virtually anyone who dealt in large financial transactions.

The list kept expanding in 2004 to cover accountants, auditors, lawyers, pension managers and security dealers. What’s next, requiring store owners to report food purchases of over 100 Euros in cash and charge them with money laundering and food hording?

France, as a member of the European Union (EU), was required to enact and implement three EU money laundering directives. (1) Directive 91/308/EEC that was intended to prevent people from using the financial system for money laundering, (2) (Directive 2001/97/EC), which was enacted to cover domestic French legislation in 2004, (3) Money Laundering Directive opted by the EU in late 2005.

The Governments keep working at making it harder and harder for people to get their money into a tax free environment. However, for every action there is an opposite and equal reaction and the rich keep finding new inventive ways to circumvent the rules that would permit the French Government to confiscate their money via high tax rates.  You see, it’s perfectly okay when the Government steals people’s money through confiscatory tax rates and Cyprus style confiscation of depositor account. That’s not a money laundering crime when the Government does it, it’s only a crime when the people that own the money do it. Make no mistake about it, the rich will continue to find  ways to protect and save their money from confiscation and death at the hands of corrupt Government officials. If they can’t get a friendly bank to help them, then the last resort will be to take their money out of the bank and bury it in their back yard. 

We again must caution our readers to be very careful with whom you entrust your money.  You could very well wake up like the people in Cyprus, who thought their money was safe, only to find  that the banks were closed and their money frozen and no cash at the ATM. Then when the banks finally opened two week later people could only get so much a day, and a percentage, from 10 to 70 percent, was confiscated by the EU Central Banks and there were currency controls which prohibited people from wiring their money out of the bank. 

WARNING TO OUR READERS, THIS CAN HAPPEN ANYWHERE.  We are advising our readers once again; get your money out of EU Banks and stay away from Swiss Banks since they are not fully compromised and working with the EU Central Bankers and EU Government. Get cash and hide it away, buy Gold and Silver, store food and water, or bury you money it in your back yard or basement at least you will know where your money is and that you can get it when you want to. A a flash crash could happen anytime so you must prepare for the worst and hope for the best. However, since hope is not an action plan, then you better take steps to prepare for the worst.

Victor Vanzant  

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Markets


Related Articles

View Comments and Join the Discussion!