Follow the yellow gold road…..

What a couple of days it’s been in the financial world. Allen Stanford, scammer extraordinaire, whereabouts still unknown, is now known to have contributed large sums of money to congressional recipients, to vote against a financial services antifraud bill that would have linked the databases of state and federal banking, securities and insurance regulators. The bill died in the Senate.

Biggest recipients of his cash?

Sen. Bill Nelson, D-Fla. ($45,900); Sen. John McCain, R-Ariz. ($28,150); Sen. Chris Dodd, D-Conn. ($27,500); and Sen. John Cornyn, R-Texas ($19,700). Rep. Pete Sessions, R-Texas, also received $41,375.

The full list is here and here.

Barack Obama’s presidential campaign fund received only $4600 and it was immediately donated, yesterday, to a Chicago charity, according to the Chicago Tribune.

But the other big story is the deal Swiss UBS Bank made with the feds. Accused of assisting U.S. citizens avoid income taxes, UBS Bank has agreed to lift the veil of secrecy and identify “certain” clients. This could be 17,000 of their 20,000 clients whose combined deposits are worth $20 billion dollars.

In July 2008,Sen. Carl Levin (D-Mi) was calling for them to clean up their act. According to The Consumerist Levin told ABC News “UBS’s banking license should be revoked until the bank “cleans up its act.”” He listed the following as what the bank does to conceal its clients names and assets.

* Code Names for Clients
* Pay Phones, not Business Phones
* Foreign Area Codes
* Undeclared Accounts
* Encrypted Computers
* Transfer Companies to Cover Tracks
* Foreign Shell Companies
* Fake Charitable Trusts
* Straw Man Settlors
* Captive Trustees
* Anonymous Wire Transfers
* Disguised Business Trips
* Counter-Surveillance Training
* Foreign Credit Cards
* Hold Mail
* Shred Files

Prepared by the U.S. Senate Permanent Subcommittee on Investigations, July 2008.

For the record, Levin took no money from Stanford or his PAC. I’ll bet he even pays his taxes – all of them. Can he be Treasury Secretary?

Reuters reports the deal with UBS goes like this:

Swiss bank UBS AG has agreed to a deal with the U.S. Justice Department that would let the bank avoid tax-violation charges in exchange for identifying some of its U.S. account holders and paying $780 million in fines.

Here are the key terms of the deal:

– UBS, under orders by Swiss market regulators, is to give the United States identities and account information of “certain” U.S. customers. Details are to be filed under seal with U.S. federal court and turned over as soon as the court accepts the agreement.

– UBS agrees to pay $780 million in fines, interest and penalties. This includes $200 million to be paid to the U.S. Securities and Exchange Commission. The remainder is to be paid to the Justice Department over 18 months, with options to pay early or extend the terms up to four years.

– UBS acknowledges that it helped U.S. taxpayers open accounts that concealed their identities from the U.S. Internal Revenue Service. About 17,000 of 20,000 U.S. cross-border clients concealed their identities and the existence of their accounts, with $20 billion in assets, from the IRS, the Justice Department said.

Some of these clients are unindicted co-conspirators.

The business generated about $200 million a year in revenue for UBS from 2002 to 2007, it said.

– UBS agrees to quit providing cross-border banking services to U.S. clients with undeclared accounts.

– After 18 months, the U.S. government will recommend dismissal of charges against UBS providing it honors the terms of the agreement.

The Stanford saga, in the meantime, continues to rock the world of the wealthy.

Venezuela seized a local bank affiliated with the Stanford Group, after there was a rush to withdraw funds through online banking. According to Reuters,

Depositors withdrew cash using Internet banking services. The bank takes deposits and makes loans only in the OPEC nation’s local currency.

“Most depositors of Stanford Bank Venezuela are from the (highest) income classes. They move their funds on the Internet, and this allowed for a massive withdrawal that pushed the bank into a precarious state,” Finance Minister Ali Rodriguez told reporters.

“The authorities were forced to take the decision to intervene and there will be an immediate sale,” he added.

And in Antigua, the Associated Press reports that customers were turned away from the Stanford bank there, because its assets were frozen. Depositors were arriving by private jet to withdraw their cash and were panicking when they discovered they couldn’t. One man, who owned a software firm, complained that his life savings was in that bank.

Let me guess. There is no F.D.I.C. insurance in Antigua.

It would seem this is just the beginning (of the end?).

Wonder how many of our congresspeople have offshore accounts? We already know they have an aversion to paying taxes.

Wonder if Geithner has one?

But most of all, I wonder if anyone who is caught will go to jail, go directly to jail, not pass go, and not collect $200.

And second I would like to know, will their assets be seized?

If the answer to the second question is yes, I would recommend to the Treasury Department and President Obama, that the assets seized from anyone in the financial industry caught up in these, or any future messes uncovered by the IRS and the FBI, be dumped into an account called the TARP Rebate Fund, which recoups the cash for the taxpayers, from the cheats and thieves who bought us this mess in the first place. (Oh, did I say bought, I meant brought – Freudian slip). And any congresspeople who return campaign contributions from any of these cheats, should also be dumped into this fund.

As a matter of fact, start with Geithner‘s payments, Daschle‘s Kellefer‘s and Solis‘. It would be a good start.

And any congress person who is found to have an offshore account in the UBS debacle, should be bounced from their office, forbidden from holding any public office anywhere in the U.S. or its territories, and prosecuted to the fullest extent of the law.

These people all need to do serious jail time. Nothing like seized assets and jail time to straighten up a class of people.

Is there a law against “betraying the public trust?” Because if there isn’t there should be.

Sentence: 20 to life in a Supermax prison. Enjoy. You built it.