World View: Russia's Duma Blocking U.S. Adoptions of Russian Orphans

This morning's key headlines from GenerationalDynamics.com
  • Russia's Duma blocking U.S. adoptions of Russian orphans
  • Dept. of Justice brings criminal charges against Swiss bank UBS
  • Deutsche Bank faces severe tax evasion charges in Germany

Russia's Duma blocking U.S. adoptions of Russian orphans

The painting 'Orphanage - Nap Time' by Russian artist Vitaly Drozdov
The painting 'Orphanage - Nap Time' by Russian artist Vitaly Drozdov

Modern Russia has more orphans than any other country (678,000), even more than the Soviet Union had during World War II. Over the past 20 years, U.S. citizens have adopted more than 60,000 of them. Some of the rest, especially those with mental or physical disabilities, are locked into cribs with iron bars, forced to lie in their own feces and urine. 

Now the Duma has given preliminary approval to legislation banning Americans from adopting Russian children. The ban is part of a larger bill forbidding NGOs (non-government agencies) from operating in Russia if they received U.S. funding and conduct political activities. 

President Vladimir Putin has accused American-funded NGOs of interfering in Russia's political process, as it became apparent that Putin's return to the Presidency occurred because of massive voter fraud. The ban on adoptions is retaliation for American legislation called the "Magnitsky Bill," passed in response to an alleged fraudulent scheme uncovered by Sergei Magnitsky, a Russian lawyer, who named names of numerous corrupt Russian tax and law enforcement officials; he was then thrown into a Russian jail and left to die.

Moscow Times and Bloomberg

Dept. of Justice brings criminal charges against Swiss bank UBS

U.S. prosecutors charged two former UBS AG traders on Wednesday with taking part in a multi-year scheme to manipulate Libor interest for their own personal gain. UBS was fined $1.5 billion, and its Japanese subsidiary pleaded guilty to criminal fraud. According to Attorney General Eric Holder: 

Today, the Justice Department is filing a criminal information charging UBS Securities Japan – a subsidiary of the multinational financial institution UBS AG – with felony wire fraud for engaging in a scheme to manipulate the London Interbank Offered Rate, or LIBOR – a key benchmark for financial products and transactions around the world. The company has agreed to plead guilty to this charge, to admit to its criminal conduct, and to pay a $100 million fine. 
Additionally, in a separate complaint, two former UBS traders have been charged with conspiracy for their alleged roles in this scheme – which allowed UBS to boost its trading profits by placing bets on the movement of benchmark interest rates, and then manipulating those rates. One of these individuals has also been charged with wire fraud and an antitrust violation in connection with these activities. 
By causing UBS and other financial institutions to spread false and misleading information about LIBOR, these alleged conspirators – and others at UBS – manipulated the benchmark interest rate upon which many consumer financial products – including credit cards, student loans, and mortgages – are frequently based. They defrauded the company’s counterparties of millions of dollars. And they did so primarily to reap increased profits, and secure bigger bonuses, for themselves.

One trader, Tom Hayes, a 33-year-old Gen-Xer, colluded with about 100 traders at other banks and 12,000 interdealer brokers in the massive scheme.

Long-time readers are aware that we're seeing something of a miracle here. Eric Holder and the Obama Justice Department have adamantly refused to investigate and prosecute anyone for the financial crisis, even when the fraud was completely obvious and provable ("Financial Crisis Inquiry hearings provide 'smoking gun' evidence of widespread criminal fraud").

Thus, Tom Hayes is actually the first banking crook to actually be charged. What made Holder change his mind? 

We presume that Holder has stubbornly refused to prosecute bankster criminals because of all the money they contributed to Obama's presidential campaign. Maybe the fact that Obama won't be running again is one of Holder's reasons.

But the more obvious reason is that UBS is not an American bank, so it doesn't contribute to Obama's campaign anyway. UBS is a Swiss bank, and the criminal charges were brought against its Japanese subsidiary. Recently, British bank HSBC was fined ( "15-Dec-12 World View -- Outrage grows that U.S. did not jail anyone at HSBC bank for money laundering"), and before that Barclays bank was fined in the Libor scandal. 

So it's STILL true that no American bank has been held accountable for the financial crisis, despite massive evidence of criminal activity, and no American bankster has been sent to jail. Going after the Japanese subsidiary of a Swiss bank almost seems like a joke. Dept. of Justice and Bloomberg

Deutsche Bank faces severe tax evasion charges in Germany

I became very aware of Deutsche Bank in 2007 and 2008 when I was writing about subprime mortgage fraud. What had happened during the bubble was that a bank would grant a subprime mortgage loan, and then sell the note and the deed to another bank. Readers may recall that many homeowners going through a foreclosure process were surprised to learn that the bank that had given them the mortgage loan was no longer involved, and often they couldn't figure out which bank actually owned their home. 

As I discovered at the time, in most cases, the bank that had taken the mortgage loans over was Deutsche Bank. Needless to say, Deutsche Bank lost a great deal of money when the subprime mortgage market collapse. 

Deutsche Bank was once Germany's proudest financial institution but is now facing numerous legal charges and scandals. New management was brought in to recover from the subprime mortgage disaster, but it now appears that they did so by committing tax fraud. 

The fraud involved those greenhouse gas emissions certificates that European companies can trade with one another to be allowed to emit carbon dioxide. Deutsche Bank cooperated in a shell game to evade taxes by passing these certificates back and forth through shell companies across national borders. The scheme sounds remarkably similar to the way that subprime mortgages were passed from bank to bank to commit fraud.

A frequent theme that I've written about numerous times is that the financial crisis is far from over for many reasons; a major reason being that the same people who committed fraud in the first place are still in the same jobs, finding new ways to commit fraud, and with the Obama administration refusing to investigate these crooks, they know that they can go on committing crime after crime with no fear of prosecution.

In this case, however, it's German prosecutors going after Deutsche Bank, while American prosecutors are going after UBS. Maybe these are just the first signs of a coming flood of criminal prosecutions that will send lots of banksters to jail. Let's hope. Spiegel

KEYS: Generational Dynamics, Russia, Duma, Vitaly Drozdov, Vladimir Putin, Sergei Magnitsky, UBS AG, Eric Holder, Libor, Tom Hayes, HSBC, Barclays, Germany, Deutsche Bank 

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