Page last updated at 17:01 GMT, Monday, 22 June 2009 18:01 UK

Conspiracy surrounds $134bn 'bond' find

By Manuela Saragosa
Business reporter, BBC World Service

The bond certificates in question

What do you get when you mix two Japanese nationals with some fake US government bonds, a slow train to Switzerland and members of the Italian financial guard?

The answer is a $134bn (£82bn; 97bn euros) conspiracy theory which has fired up a whole realm of financial bloggers on the internet.

But then this is a story which does have the ring of a John Le Carre novel.

It begins with two 50-year-old Japanese men being stopped by Italy's Guardia di Finanza - the country's financial guard - on a train passing through Chiasso, a small border town between Italy and Switzerland.

The Italian finance guards ask the pair if they have anything to declare on their way into Switzerland. Both insist they haven't.

But on a hunch, the guards decide to search their suitcase anyway.

In it, under items of personal clothing, they find a concealed area stuffed with documents that look like dollar-denominated US government bonds apparently worth a jaw-dropping $134bn.

That is enough to fund three Beijing Olympics, with some change leftover to boot.

Secret mission?

It clearly is a remarkable tale, but after the "bonds" were seized by the Italian finance police, the men, after some questioning, were let go, sparking a frenzy of conspiracy theories on the internet.

Now questions abound: are the bonds real or counterfeit? And why were the Japanese men not arrested?

Were they, perhaps, actually Japanese government officials on a secret mission to dump US dollar-denominated assets?

And if so, is that just more evidence that a growing number of investors are losing faith in the US economy and the US government's ability to repay is ballooning debt?

Who else is involved, ask the bloggers. Is this the work of the Italian mafia? Take a trip round the web, and there is no shortage of explanations.


Official answers have been coming through though, albeit too slowly to stop the global rumour mill.

Italy's Guardia di Finanza says they didn't arrest the Japanese men because they hadn't committed a crime. Exceeding the 10,000-euro limit on cash or securities allowed to be transported between Italy and Switzerland is an offense punishable with a fine, not jail.

The Guardia di Finanza has now sent the seized "bonds" to Washington, so that the US Treasury can let the Italians know whether they were or fake or not.

But already US Treasury spokesman Steve Meyerhardt, who has seen the photos, has few doubts.

"There's no way on earth these things are real," he says. "From the pictures we've seen of these supposed bonds, they certainly look fake. They don't look like anything the US Treasury has ever issued."

Mafia scam

So if these were clearly fakes of no value, why would anybody be trying to smuggle them into Switzerland?

Banking analysts, say the answer is that the bonds have been used in the past as collateral to open credit lines with banks and other lenders. The borrower takes the money, and then disappears.

Italy's financial guard says that finding hauls of counterfeit money and bonds is not unusual.

Last month the Sicilian mafia was implicated in a $1bn bond scam which was cracked by Italian prosecutors.

But if this latest stash of "bonds" is finally confirmed as fake by the US authorities, nobody should be more disappointed than the Italian authorities.

They stand to make $38bn dollars in fines if the bonds are real - a figure that would greatly benefit the state's coffers.

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