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Italian police seize $6 trillion in fake U.S. Treasury bonds

The high-value equivalent of $3 carnival bills, the seized documents allegedly were part of a scheme to defraud Swiss banks. Eight suspects are arrested.

February 18, 2012|By Jim Puzzanghera, Los Angeles Times
  • A cache of 6,000 counterfeit U.S. Treasury bonds  each with a face value of $1 billion, bearing a photo of President Wilson and an issue date of 1934  was confiscated in Switzerland. Authorities said the bonds had been transported in 2007 from Hong Kong to Zurich, where they were transferred to a Swiss trust.
A cache of 6,000 counterfeit U.S. Treasury bonds each with a face value of… (Associated Press )

Reporting from Washington — It was an offer that turned out to be pretty easy to refuse.

A cache of 6,000 U.S. Treasury bonds — each with a face value of $1 billion — available for a limited time only. And if you acted quickly on the $6-trillion offer, you'd get a signed copy of the Treaty of Versailles, the 1919 document that ended World War I.

But there were a couple of problems with the documents seized by Italian police in Switzerland as part of an international fraud investigation.

Despite the soaring federal budget deficit, the U.S. government does not sell a $1-billion Treasury bond. In fact, the U.S. Treasury doesn't even sell paper bonds anymore. Transactions are all electronic.

The seized documents were the high-value equivalent of $3 carnival bills.

"It's a piece of paper with something printed on it," Brian Leary, a spokesman for the U.S. Secret Service, said of the $1-billion bonds, which contained the image of President Wilson. "It's worthless."

U.S. authorities helped Italian police determine that the bonds were fakes.

"These fictitious bonds were allegedly part of a scheme to defraud Swiss banks," said the U.S. Embassy in Rome. An Italian anti-Mafia unit arrested eight people across Italy on Friday in connection with the caper.

Such scams are not uncommon, with the fake documents often used as collateral for loans or other transactions, authorities said.

U.S. Immigration and Customs Enforcement has warned the public of bogus investment pitches involving billions of dollars in U.S. bonds.

One scam involved newly discovered bonds that purportedly had been bound for China in the 1930s as part of a secret government agreement before being lost for years when the plane carrying them crashed in the Philippines.

In the case of the $6 trillion in bonds seized Friday, news reports said they were part of a scheme to purchase plutonium from Nigeria. That might have produced a lot of emails from Nigerians seeking assistance with their newfound fortunes.

Joel Stonington in New York contributed to this report.

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