Background of US Senate hearing on US$3.9 billion Cuban money laundering

The notes attached offer a summary of a hearing on May 20, 2004 that did not receive too much attention. Unfortunately, even the hearing diluted the incredibly inept handling by the New York Federal Reserve Bank of a seven year scam by the Swiss UBS bank in laundering US$ 3.9 billion dollars from Cuba. In the end, the Swiss bank was fined US$100 million for its misleading reporting and its illegal actions. There are two key factors to point out in this scandal.

One, Castro may well be doing what he executed General Ochoa for. At the time of the Ochoa trial, it was revealed that Ochoa was involved in big deals with the drug cartels to facilitate drug traffic in exchange for huge investments in the tourist industry. Cuba has invested billions of dollars in expanding its tourist industry, so-called foreign investor hotel chains only finance operating capital, and so far no explanation has been given as to the source of that investment by ECLA in is annual reports. Maybe the UBS was the one that provided that financing by accepting US old banknotes from the drug trade and crediting Cuban government accounts with the proceeds.

Second, this huge inflow of dollars over seven years may explain the gap between the estimates for remittances attributed to Cuban Americans and the real figures. The last such estimate for 2003 by the IADB was US$1,194 million dollars. Since, according to the US Census of 2000 there are only 477,000 Cuban American households in the US and the majority do not send any remittances, this means that all people making remittances must be violating the law that limit remittances to US$1,200 a year. A most unlikely situation.

For quite sometime I have maintained that the inflated ECLA and IADB remittance figures may be covering money laundering items. Maybe this scandal at the US Senate will provide the answer. That is, if somebody bothers to follow up the hearing with an investigation of how the Cubans got hold of so many US old banknotes and what they did with the credits in the UBS bank accounts.

Cortesia de EFBHernand

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