Uso Fraudolento Dei Derivati In Parmalat Da Parte Delle Banche Americane


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Fraudulent U.S. Bank Derivatives Behind Parmalat's Insolvency
by Michael Edward

It is currently estimated that at least $17 BILLION (*updated estimate) of Parmalat funds have simply disappeared and cannot be accounted for. The way this came about is a complex web of high risk derivatives based on worthless bonds which, in turn, were founded through offshore shell companies. IF this derivatives scandal is ever fully exposed, the collapse of U.S. and European banks, and the U.S. and European economies, will be eminent. After derivative based scandals like Enron and WorldCom, this just may be the pin that bursts the financial balloon.

Starting in 1997, Parmalat entered into numerous North and South American company acquisitions. The purchase of these companies created large bank debts for Parmalat primarily through Bank of America, Citicorp, and JP Morgan Chase. By 2001, these Parmalat buy-outs were already drowning in red ink. Initially, the banks hedged these losses with high risk interest swap derivatives.

It is no coincidence that the 3 U.S. banks directly involved with the Parmalat scandal are those who hold the highest amount of derivatives:

1 - JPMORGAN CHASE BANK - $33 Trillion, 700 Billion
2 - BANK OF AMERICA - $13 Trillion, 800 Billion
3 - CITIGROUP - $11 Trillion

The result was more red ink due to risky speculation on interest and exchange rates, so the banks created a Ponzi scheme with derivatives they brokered to other banks and investors, such as U.S. pension funds; all based on worthless Parmalat bonds. In reality, they created a financial scam as a means to offset the losses on their Parmalat debts and losses. But the scheme got out of hand when greed apparently took over. Now, those same banks are attempting to lay the entire blame on Parmalat. However, it appears that Parmalat was a victim of these bank schemes along with hundreds of thousands of investors.

Part of this bank scheme was to rate the derivative-based Parmalat bonds as "sound financial paper." Bank of America was a partner in most of Parmalat's acquisitions, and Citicorp purportedly created the fraudulent accounting system through mail drop shell companies formed in offshore jurisdictions.

One of these shell companies was Bonlat, re-organized in the Cayman Islands after having been closed down by the Netherlands Antilles government. Bonlat “invested” $6.9 Billion in high risk interest swap derivatives founded on the falsely high-rated bonds created by the banks for Parmalat. Another shell company, Buconero LLC, was a subsidiary of Citibank. The Italian name Buconero means Black Hole. How ironic it is that Citibank chose this name.

"The Parmalat fraud has been mainly implemented in New York, with the active role of the Zini legal firm and of Citibank," said San Diego lawyer Darren Robbins. "We believe that Citigroup, by creating instruments like the sadly famous 'Buconero,' has played a fundamental role in helping Parmalat to fake their balance sheets and hide their real financial situation."

The entire operation was a well organized fraud from its inception. Through Zini, North and South American firms that had been acquired by Parmalat were sold. Later, Parmalat re-purchased those same companies. The money for the re-purchases came from the shell company derivatives based on the worthless Parmalat bonds. The sole purpose of the offshore shell companies, such as the Citibank subsidiary, was to create liquidity on the Parmalat books. Because of that falsely created paper liquidity, the banks could keep brokering derivatives based on even more worthless bonds they were rating as sound financial investments.

Former Parmalat CEO Tanzi stated to Italian prosecutors that "[the fraudulent bond system] was fully the banks idea." Parmalat's former financial manager, Fausto Tonna, altered Parmalat's books to provide a false security for the bonds. According to the former CEO, "It was the banks which proposed it [altering the company books] to Tonna."

In June 2003, the Parmalat board had a new director, Luca Sala, who came from Bank of America. In order to apparently cover up the fraudulent bond-based derivatives they had brokered, on December 19, Bank of America announced that a Parmalat account allegedly worth $3.9 billion did not exist, which brought the Parmalat insolvency to the public. How coincidental that in early December, the new financial manager at Parmalat was Alberto Ferraris from Citibank.

It appears to be far more than evident that the spirit of the great Italian fraudster, Carlo Ponzi, is alive and well in the U.S. banking system.

Reproduction by non-commercial and non-profit groups encouraged. Otherwise, International Common Law Copy Rights 2004 by WorldVisionPortal.Org


February 11, 2004 - In a statement regarding Parmalat and the fraudulent involvement of banks in this scandal, EU Internal Market Commissioner Frits Bolkestein, the EU's top financial regulator, announced

"The apparent size of this fraud is staggering. Scandal upon scandal will cumulatively weaken financial markets like a corrosive drip of a leaking fuel tank."

Milan, Italy (Feb. 10) - Italian press agencies are now reporting that prosecutors investigating the collapse of Parmalat have placed seven international banks under investigation for price manipulation.

The U.S. banks under investigation are Bank of America, Citigroup, and Morgan Stanley.

Spokesmen for Citigroup and Morgan Stanley declined to comment on the reports. Bank of America spokesmen said that their banks had not yet received formal notification that they are under investigation.

In investigating the banks, the Milan prosecutors are seeking to establish how much the institutions knew about Parmalat's true financial situation in the months before the company's collapse into insolvency in December. Prosecutors also need to untangle the relationship between Parmalat and the many banks that assisted the company in obtaining financing.

The banks that are under investigation all either bought or sold Parmalat debt, and/or helped the company obtain financing.

Citibank Investigation - In Late January, investigators began looking into two conduit enitites run by Citibank. The probe is examining sham sales of receivables by Parmlat affiliates to Eureka Securitization Plc, an asset backed commercial paper (ABCP) conduit being run by Citibank.

Most ABCP conduits are off the balance sheet of the sponsoring bank. Eureka Securitization Plc and Eureka Securitisation Ltd are European ABCP conduits sponsored by Citibank. ABCP conduits are not banks and are not covered by mainstream banking discipline.

Hi I'm Dave Serchuk a reporter at Securities Week, an S&P publication and I have written about Eureka and Citi, and would love to find out more about these investigations going on with Eureka. I can be reached at or 212-438-3896. Thanks!

Parmalat investigators in Malta

by MaltaMedia News
Apr 15, 2004, 09:22 CET

Some of the Italian magistrates investigation the Parmalat scandal are expected in Malta on Thursday as part of their probe into the transactions of Parmalat Capital Finance (PCF), the Parmalat subsidiary registered in the Cayman Island but which has its fiscal office in Malta.

Reuters reports magistrates Antonella Ioffredi, Silvia Cavallari, Vito Zincani and a financial consultant will meet Maltese investigators between Thursday and Saturday.

Parmalat Capital Finance Ltd is controlled by Bonlat, the company used to divert group funds. Bank of America has filed for the liquidation of both companies.

Reuters quoted judicial sources saying that if Parmalat Capital Finance and Bonlat are liquidated before their documents are scrutinised in the inquiry, then any documents that could shed light on the whereabouts of the money taken from the Parmalat Group will vanish.

Parmalat had a number of offshore companies, spreading from Malta to the Isle of Man. These companies were at the heart of the Italian food group's problems, which were disclosed when a Euro 4 billion bank account held by a subsidiary in Cayman Islands was declared false.

Reports have indicated that 600 million Euros out of the 2.5 billion in Parmalat's books, had been irregularly transferred from Parmalat to the Maltese subsidiary between 1999 and 2003.

Maltese former Minister of Finance John Dalli reassured Malta had nothing to hide in the Parmalat scandal.

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