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Hullabaloo


Thursday, December 26, 2013

 
Laundering justice

by digby

Does everyone remember this little event from about ten years ago?
[Tommy Chong] and his lawyers were hoping for a community service sentence as punishment for distributing thousands of bongs and marijuana pipes online through his California company, Nice Dreams Enterprises. 
But Chong, famous for such movies as "Up in Smoke" with longtime partner Cheech Marin, is going to prison instead.

U.S. District Judge Arthur J. Schwab yesterday gave him nine months in a federal lockup and fined him $20,000.

As part of the sentence, Chong forfeited his Internet domain name, Chongglass.com, along with $103,514 in cash and all of the drug paraphernalia seized by federal agents during a raid Feb. 24.

He'll be allowed to self-report to prison, probably to a facility nearest his Pacific Palisades, Calif., home.

The case against him was part of "Operation Pipe Dreams," a national investigation of drug paraphernalia distributors that began in Pittsburgh during the prosecution of Akhil Kumar Mishra and his wife, Rajeshwari, who ran two head shops Downtown in the 1990s.
Nine months and hundreds of thousands of dollars for selling some glass pipes. Not drugs. Just pipes.

And then we have this, via Matt Taibbi:
If you've ever been arrested on a drug charge, if you've ever spent even a day in jail for having a stem of marijuana in your pocket or "drug paraphernalia" in your gym bag, Assistant Attorney General and longtime Bill Clinton pal Lanny Breuer has a message for you: Bite me.

Breuer this week signed off on a settlement deal with the British banking giant HSBC that is the ultimate insult to every ordinary person who's ever had his life altered by a narcotics charge. Despite the fact that HSBC admitted to laundering billions of dollars for Colombian and Mexican drug cartels (among others) and violating a host of important banking laws (from the Bank Secrecy Act to the Trading With the Enemy Act), Breuer and his Justice Department elected not to pursue criminal prosecutions of the bank, opting instead for a "record" financial settlement of $1.9 billion, which as one analyst noted is about five weeks of income for the bank.

The banks' laundering transactions were so brazen that the NSA probably could have spotted them from space. Breuer admitted that drug dealers would sometimes come to HSBC's Mexican branches and "deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows."

This bears repeating: in order to more efficiently move as much illegal money as possible into the "legitimate" banking institution HSBC, drug dealers specifically designed boxes to fit through the bank's teller windows. Tony Montana's henchmen marching dufflebags of cash into the fictional "American City Bank" in Miami was actually more subtle than what the cartels were doing when they washed their cash through one of Britain's most storied financial institutions.

Far be it from me to suggest that the US Government uses its mighty police and judicial powers unfairly and inconsistently. But if I were to do so, there is no place where it is more obvious than when it is tasked with meting out punishment for those in the financial sector. Tommy Chong is a wealthy celebrity, of course, but he was on the wrong side of the drug war and they wanted to make an example of him. Being involved in the drug trade or even smoking the odd joint in certain places is a risky business in America. Unless you are a wealthy banker laundering drug money,of course, in which case you will get off scott free and the bank will have to pay your fine ...

If only this guy had been a banking executive:
On July 9, 2013, in Oklahoma City, Okla., Johnnie Ray Bragg Jr. was sentenced to 480 months in prison, four years of supervised release and ordered to forfeit $260,752. Bragg pleaded guilty in August 2012 to drug and money laundering conspiracies. According to court documents, from about September 21, 2010 to about April 20, 2011, Bragg and others received currency from the sale of narcotics and deposited the proceeds into bank accounts at branches of a bank in Oklahoma, which were controlled by others in the conspiracy. Bragg and others also wire transferred drug proceeds from Oklahoma to California and purchased “money packs” that were then used to load funds from the drug proceeds onto Bragg’s prepaid Visa card. Bragg used the Visa card to pay for his travel between Oklahoma and California in furtherance of the drug-trafficking conspiracy.
Too big to jail sounds like a facile little slogan but it appears to be completely accurate:
Though this was not stated explicitly, the government's rationale in not pursuing criminal prosecutions against the bank was apparently rooted in concerns that putting executives from a "systemically important institution" in jail for drug laundering would threaten the stability of the financial system. The New York Times put it this way:

Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system.

This justice department is apparently congenitally unable to hold members of the financial elite accountable for wrongdoing. They can't even do it for laundering drug money. This means that banks are officially unassailable criminal enterprises.









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