Category | The Deep Capture Campaign

All Publicity is Good Publicity if You’re Bill Ackman

All Publicity is Good Publicity if You’re Bill Ackman

John Hempton at Bronte Capital (see his blogs here) is going to some lengths to stir up a scandal concerning letters that were authored (or not authored, as it were) by U.S. Senator Edward Markey. In the letters (sent to the SEC and other government agencies), Senator Markey seeks information about a company called Herbalife, and expresses his supposed concerns that Herbalife is engaged in wrong-doing.

Since the senator’s concerns about Herbalife are similar to the concerns that have been expressed by hedge fund manager Bill Ackman, and since the senator’s letters seem to have been created on Bill Ackman’s computer, Hempton theorizes that Ackman has captured a U.S. senator, and that Ackman was even able to ghostwrite the senator’s letters about Herbalife and profit from the damage that the letters caused to Herbalife’s stock price.

Far be it from us at DeepCapture to argue with that theory, but it could also be that both Ackman and Hempton (who, like Ackman, is short selling Herbalife stock) are themeselves keen to advertise this “scandal” so as to reinforce the perception that Ackman’s superpowers are such that not just stocks, but also senators follow his commands. Superpowers are all the more super for there being (from the point of view of our captured media) no scandal at all.

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Stevie Cohen, When PBS is Devoting Frontline Shows to Your Perfidy (“To Catch a Traitor”), Is That Bad? (SAC)

 

And yes, I know that PBS used “trader,” not “traitor.” De gustibus non est disputandum.

 

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Economic Warfare as an Instrument of Transnational Organized Crime

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Steven A. Cohen: “That’s guilty! Guilty, guilty, guilty!!”

 

NBC: Billionaire Steven Cohen’s hedge fund could pay $1B fine in fraud case: sources

 

 Steven A. Cohen: Thats guilty! Guilty, guilty, guilty!!

 

 

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The Global Bust-Out Series (Chapter 8): Boris Berezovsky and the “Nexus” Between Organized Crime, Terrorism, and the Global Oligarchy

The Global Bust-Out Series (Chapter 8): Boris Berezovsky and the “Nexus” Between Organized Crime, Terrorism, and the Global Oligarchy

In earlier chapters of this series, we learned about an incredible enterprise known as the Bank of Credit and Commerce International (BCCI), which was operated by oligarchs with ties to the Muslim Brotherhood in partnership with royal families and government officials who were among the Muslim Brotherhood’s principal sponsors. We also learned that the BCCI enterprise operated with the consent, protection, and involvement of the regime in Washington even though BCCI not only counted among its partners numerous organized crime syndicates and most of the world’s leading terrorist organizations, but also was itself a transnational organized crime syndicate involved in everything from the trafficking of narcotics and nuclear weapons components to the funding of terrorism and the perpetration of destructive financial crime.

In addition, we learned that BCCI counted among its important business partners some of the leading figures of the American establishment, including Michael Milken, who was, during the 1980s, the most powerful financial operator of Wall Street. As we know, Milken and some of his closest associates, in league with the BCCI enterprise, perpetrated the “bust-outs” of numerous savings and loan banks, thereby contributing to the devastating savings and loan crisis that began in the late 1980s, and which ultimately cost taxpayers more than $2 trillion in bailouts—a portent of bigger and better things to come.

Also involved with these bust-outs were (see earlier chapters of this series) some of the nation’s leading organized crime figures, such as Carlos Marcello, who was then the top Mafia boss in the city of New Orleans.  Meanwhile, we know, BCCI was involved with a global network of brokerages, most of them operated by people with ties to organized crime, and most of them specializing in the bust-outs of small to medium-sized publicly listed companies. As a judge remarked after BCCI shut its doors in 1991, the BCCI enterprise singlehandedly “shattered the integrity of the global financial system.”

And, of course, history did not end in 1991, when BCCI was shut down.

That same year, 1991, a Muslim Brotherhood leader named Hasan al-Turabi (also a top official in the government of Sudan) appointed Osama bin Laden to serve as chairman of an outfit called the Islamist International, and Osama bin Laden’s most important mission in that capacity was to help lead a Muslim Brotherhood initiative—“The Financial Jihad”—to replace the BCCI enterprise with a global financial network that would exceed the BCCI enterprise in scope and destructive power. That mission was largely a success, and by 1996, the Muslim Brotherhood (with the help of Osama bin Laden, among others more important than him) had built a global financial network that was also a transnational organized crime syndicate involved in all of the activities—from terrorism and destructive financial crime to the trafficking of narcotics and sophisticated weaponry—that had characterized the earlier BCCI enterprise.

Moving forward, I will sometimes refer not only to the “BCCI network” that operated in the 1980s, but also to the “ongoing BCCI enterprise” that continued to operate in later years. This terminology is, in fact, not quite correct because even prior to 1991, BCCI was just one of many similar outfits in a global market manipulation and money laundering network. In addition, BCCI was not necessarily the most important outfit in the network. But most of the outfits in the network did business with BCCI, and BCCI was a common denominator linking most of the financial operators and criminals in the network. Similarly, in 1996, earnest FBI agents discovered (or, rather, rediscovered) what they described at the time as a “global market manipulation and money laundering network” and most of the people involved with the network had formerly been involved with the BCCI enterprise.

In other words, there existed as of 1996 a global market manipulation and money laundering network that was operated not only by leaders of the Muslim Brotherhood (most of them, including Osama bin Laden, formerly involved with the BCCI enterprise), but also numerous others formerly involved with the BCCI enterprise, among them the leaders of multiple terrorist organizations (spawned by the Muslim Brotherhood), most of the world’s leading transnational organized crime syndicates, numerous rogue intelligence operatives, multiple royal families, some of the most powerful people on Wall Street, and other elements of the global criminal oligarchy. All that had changed since BCCI days was that the network had come to include some new players, notable among them a select number of Russian oligarchs, elements of the Russian intelligence services, and some newer organized crime syndicates (in Russia, the Balkans, and other former east-bloc nations) that had emerged upon the global scene after the fall of the Soviet Union.

In subsequent years, this network remained in business, the only difference being that it came to include still more new and younger players, meanwhile innovating new and eminently more destructive financial weapons (e.g. self-destruct CDOs, an innovation of Michael Milken and associates) that were used to bust out major financial institutions and national economies. Indeed, we will see that this same network contributed mightily to the great meltdown of 2008, and we will see that this same network is presently threatening to deliver a repeat performance. This might be why the president of the United States was, in 2011, moved to take the unprecedented step of formally declaring a state of “National Emergency” in response to certain conditions that currently prevail in the American financial markets.

See Chapter 1 of this series for more on the “National Emergency,” but I will remind readers that President Barack Obama, in 2011, stated that he had formally declared a state of “National Emergency” because there was a clear “nexus” between the world’s leading transnational organized crime syndicates, the world’s leading terrorist organizations, and the intelligence services of several unnamed countries. The president explained further that this was a “National Emergency” because transnational organized crime syndicates (and, we can confirm, others in the “nexus”) had not only “penetrated” the “legitimate” financial sector, but were “undermining markets” to such an extent that they now posed a serious and imminent “threat to the stability of the global financial system.”

The president did not quite put it this way, but what he meant was that there presently exists a global market manipulation and money laundering network (or “nexus”) that is inhabited by transnational organized crime syndicates, leading terrorist organizations, rogue intelligence officials, and “legitimate” financial operators who do business with all of the above. In addition, we can assume that when the president said that miscreants in this network (or “nexus’) were “undermining markets,” he meant that miscreants in the network were, in fact, “undermining the markets.” Put another way, they were perpetrating all manner of schemes that can broadly be defined as short-side market manipulation (i.e. manipulation that was “undermining markets”). And the president was right: this was (and still is) a “National Emergency.”

Unfortunately, the president seems to have declared this “National Emergency” so as to usurp for himself the “emergency” powers to handle the “National Emergency” as he sees fit. Furthermore, it seems that the president intends to handle the emergency by doing precisely nothing whatsoever. For example, the president’s administration has yet to prosecute any of the transnational organized crime syndicates that have (in the president’s words) “penetrated” the “legitimate” financial sector. In addition, the president’s administration has yet to prosecute any “legitimate” financial operators, and nor has the president prosecuted any of the other criminal oligarchs who are (in league with organized crime syndicates, terrorist organizations, and others in the “nexus”)  “undermining markets” to such an extent that they now pose a serious “threat to the stability of the global financial system.”  

Later chapters of this series will discuss in much greater detail our current predicament, but by way of introduction to that discussion, it will be useful for us to first review some history so far as it concerns a Russian oligarch named Boris Berezovksy, who veritably epitomized the “nexus” between transnational organized crime syndicates, terrorism, and the global criminal oligarchy. This history has already been well-documented by others, but it is necessary for me to repeat some of the more salient facts not only because these facts have been widely ignored by the major U.S. news organizations, but also because knowing these facts is essential to any proper understanding of the threat that is presently posed to the stability of the global financial system. Indeed, we will see that this history (like the related history of the BCCI enterprise) is entirely pertinent to any discussion of the great meltdown that occurred in 2008, and the financial crisis that continues to the present day.

* * * * * * * * *

In 2013, Boris Berezovsky died, apparently having committed suicide, at which point the major U.S. news organizations, concerning the life and times of Boris Berezovsky, reported precisely the same party line. According to this party line, Berezovsky had been one of Russia’s most “prominent” and “successful” oligarchs, but had been forced to move to London in 2000 when Russian President Vladimir Putin threatened to press criminal charges against him, not because Berezovsky had committed any crimes, but simply because Putin was a tyrant intent upon persecuting all those who challenged his power.

The major U.S. news organizations suggested further that upon moving to London, Berezovsky ceased to be an oligarch (there are no oligarchs in London, according to the major U.S. news organizations). Instead, Berezovsky (according to the media party line) embarked upon a new career as a Russian “exile” and “dissident” in the mold of the heroic Solzhenitsyn, and during all his years in London (with frequent trips to the U.S.A. where he had purchased many of America’s leading politicians, though the purchased media never mentioned that) Berezovsky was employed full-time  either exposing corruption or otherwise waging his larger campaign for freedom, democracy, and justice for all.

There was, however, more to the story, and much of it had been told by journalist Paul Klebnikov, who, in 2000, published a book (title: “The Godfather of the Kremlin”) reporting that Berezovsky had built his business empire in partnership with leading Russian and Chechen organized crime syndicates. Klebnikov’s book also described the key role that Berezovsky played in orchestrating the rise to power of Vladimir Putin. Indeed, Klebnikov suggested that Berezovsky, who was then the wealthiest and most influential man in Russia, played the most important role in orchestrating Putin’s rise to power, though he had help from other oligarchs and elements of the Russian intelligence services.

Putin had spent his early years working as a Russian intelligence operative in East Germany, and later assumed the leadership of the Federal Security Service (FSB), previously known as the KGB. In 1999, Putin became prime minister, and he was anointed president a few months later. (In 2008, Putin became prime minister again, and in 2012, he was reelected as president). In Russia today, it is almost unanimously accepted that Berezovsky and his allies orchestrated Putin’s rise to power, but it is also true that soon after Putin assumed the presidency in 1999, Putin threatened to file criminal charges against Berezovsky and a few oligarchs who were close allies of Berezovsky, at which point Berezovsky and a few other oligarchs (e.g. Vladimir Gusinsky) left Russia, and settled in foreign countries.

Pundits and journalists in Russia have opposing views about Berezovsky and his “exile” in London. One view has it that Berezovsky elevated Putin to the presidency, but in doing so, he miscalculated, failing to realize  that Putin would not return the favor by allowing Berezovsky and his associates to continue looting Russia, and would, to the contrary, crack down on the oligarchs and strip of them of the power they wielded over the Russian government. The other view has it that Putin’s move against Berezovsky was a ruse, intended only to score political points, and that Putin and Berezovsky secretly maintained close relations. In support of the latter point of view, pundits and media in Russia report that Putin and Berezovsky continued in the years following 2000 to hold secret meetings, and that Berezovsky continued to have business dealings with elements of the Russian intelligence services.

In further support of the latter view, pundits and media in Russia also note that oligarchs and crime syndicates that were among Berezovsky’s closest business partners, and which, along with Berezovsky, played important roles in elevating Putin to the presidency in 1999, continue to this day to operate in Russia with the apparent protection of the Putin government, and in partnership with the powerful Russian intelligence services. Therefore, it cannot be possible, or so it is argued, that Berezovsky, during his years as an “exile” in London, genuinely desired to remove Putin from the presidency.

It might even be (in the view of some Russian pundits) that Berezovsky moved to London not to lead a dissident movement against the Putin government, but to serve Putin as some sort of master spy, seizing control of the dissident movement so as to defuse it, and meanwhile leading the expansion of Russian influence into Britain and other Western nations. Alternatively, some suggest that Berezovsky had been an agent of Western governments at the time when he was the most powerful man in Russia, and Putin became aware of this, one reason why Putin forced Berezovsky to leave Russia, even though it was Berezovsky who had orchestrated Putin’s rise to power. We will see that there is no question that Berezovsky was an asset of Western governments, including the regime in Washington, but the nature of his relationship with Putin after his move to London remains a matter of debate.

Either way, the party line put forth by most major U.S. news organizations is patently false, and it says a lot about the state of the U.S. media that the only mainstream journalist to report the truth about Berezovsky was Paul Klebnikov, author of the 2000 book (“The Godfather of the Kremlin”) and other writings about Berezovsky’s criminality. Even more disturbing is the fact that Klebnikov (who had reported receiving death threats from Berezovsky) was, in 2004, gunned down on a Moscow street, and when he was killed, many of his fellow American journalists did not see fit to report that Klebnikov’s seminal work had linked Berezovsky to organized crime.

For a long time, the last word on Klebnikov’s murder was a 2007 story in Forbes Magazine (the magazine that had employed Klebnikov at the time when he was killed), and this story, authored by a journalist named Gary Weiss, did not even mention Berezovsky’s name, much less the fact that Klebnikov had devoted most of his career to exposing Berezovsky’s criminality. Only after Berezovsky himself was dead did Forbes Magazine publish a story suggesting that Berezovsky had, in fact, been a likely suspect in the murder of Klebnikov. There could be no greater evidence of the timidity of Forbes magazine’s editors than that they could not bring themselves to name a likely suspect in the murder of their own reporter until after the suspect was dead.

All the more appalling was that Forbes had previously given the last word on the subject of Klebnikov’s murder to the journalist Gary Weiss, who was meanwhile helping direct the activities of an outfit called The Klebnikov Project, which had been established by some of America’s most prominent journalists, ostensibly to investigate Klebnikov’s murder, and ostensibly to send a strong message that America’s most prominent journalists would not tolerate the murder of one of their own, and would indeed expose any and all miscreants who would dare so much as threaten a journalist or otherwise seek to infringe upon the freedom of the press. Incredibly, not one of those prominent journalists, in the many stories that they published about Klebnikov’s murder, reported that Berezovsky had threatened to murder Klebnikov, and nor did they report that Klebnikov’s seminal work had not only exposed Berezovsky’s ties to organized crime, but had also linked Berezovsky to multiple murders.

In addition, of course, not one of those prominent American journalists reported that Berezovsky was a likely suspect in Klebnikov’s murder, which was quite in contrast to journalists in Russia, where there is still a free press, and where numerous journalists had not only exposed Berezovsky’s ties to organized crime and had not only indentified Berezovsky as the likely suspect in Klebnikov’s murder, but had also linked Berezovsky to the murders of other journalists besides. All the more incredible was the fact that Gary Weiss, the prominent journalist who helped direct The Klebnikov Project (and who, until after Berezovsky’s death, had the last word in Forbes magazine on Klebnikov’s murder) had previously been employed by the lawyers of none other than…Boris Berezovsky.

Not only that, but Weiss (the journalist who hijacked The Klebnikov Project, an outfit ostensibly devoted to protecting freedom of the press) had been employed by Berezovsky’s lawyers to help quash freedom of the press. More specifically, Weiss (the journalist who also hijacked the Klebnikov Project, which was ostensibly investigating the murder of Paul Klebnikov) had been employed by Berezovsky’s lawyers to provide assistance to a libel lawsuit that Berezovsky had filed against…Paul Klebnikov. In addition, Weiss had been employed (by Berezovsky) to lead a smear campaign aimed at trashing Klebnikov’s reputation.

As part of this campaign, Weiss had authored dozens of anonymous internet reviews trashing Klebnikov’s book, and in these reviews (which DeepCapture reporter and computer technologist Judd Bagley traced to Gary Weiss’s IP address) maintained (falsely) that Klebnikov had fabricated the information in his book linking Berezovsky to organized crime. And if you think we have a free press in this nation, consider that The Klebnikov Project (set up by America’s most prominent journalists to expose those who threaten freedom of the press) not only failed to expose Berezovsky (who threatened the free press), but was, in fact, enthusiastically supported by none other than…Berezovsky.

Meanwhile, many of America’s leading news organizations (e.g. the Wall Street Journal) had come to be owned by people (e.g. Rupert Murdoch) who were among Berezovsky’s closest associates. In addition, the major U.S. news organizations seemed to view with total approval or indifference the fact that Berezovsky (who, after all, was some kind of democracy activist) had meddled in our own democracy, becoming one of the largest  donors (or, rather, buyers) of both the Democratic and Republican parties. Equally important, the major U.S. news organizations completely ignored the massive damage that Berezovsky and his mafia associates did to the U.S. economy during all those years while Berezovsky was ostensibly employed full-time as a Russian “exile” and “dissident” in the mold of the heroic Solzhenitsyn.

* * * * * * * * *

In any event, though the information has never appeared in any major U.S. news organization, it has been widely reported elsewhere, and confirmed to be true by numerous prominent investigators, that Berezovsky did (as Klebnikov reported in his book) build his business empire in partnership with leading Russian and Chechen organized crime syndicates. It has also been confirmed to be true (as Klebnikov reported in his book) that Berezovsky, more specifically, built his business empire in partnership with the Mogilevich organization (led by Semion Mogilevich, often referred to as “the most dangerous mobster in the world”) and a Chechen organized crime syndicate who leaders were (in addition to being mobsters) notorious terrorists, trained by trained by Osama bin Laden’s operation and by U.S. military contractors who took their orders from a faction of the regime in Washington.

Berezovsky himself admitted to investing more than $1 million with a Chechen terrorist named Shamil Basaev, who had once planted a radioactive materials in a Moscow park, informing the Russian police that next time the radioactive materials would be exploded as a so-called “dirty bomb,” thereby afflicting thousands of people with deadly radioactive poisoning. In 2004, Basaev did one better by leading a horrific terrorist attack on an elementary school in Beslan, Russia. That atrocity resulted in the deaths of more than 300 people, most of them young children, though there is debate over whether the children were killed by Basaev and his associates, or by Russian police who stormed the school in a botched attempt to rescue the children whom Basaev was holding hostage.

That same year, 2004, of course, Klebnikov, was murdered. That murder has never been solved, and nor have the murders of numerous Russian journalists who reported extensively on Berezovsky. One of those journalists was named Anna Politkovskaya, and when she was assassinated in 2006, it was widely assumed in Russia that her mistake had been to report the same story that Klebnikov had reported. Politkovskaya had been regarded as being Russia’s best investigative journalist, and the American media establishment conferred upon her numerous awards for her reporting and for her efforts to maintain press freedoms in Russia. However, America’s free press failed to inform the public that Politkovskaya’s seminal investigative reporting had been about Berezovsky’s ties to Chechen organized crime and his role in securing the presidency for Vladimir Putin.

Politkovskaya worked for the Russian newspaper Novaya Gazeta, which is one of the world’s finest media organizations. I cannot help but note the irony of the fact that U.S. newspapers (which operate in a country that boasts of having a “free” press) no longer publish much in the way of investigative reports, and seem to be in large part captured by a ruling oligarchy, while Novaya Gazeta (operating in a nation said by the U.S. media to be something close to a police state) employs dozens of full-time investigative journalists who have not only defied and exposed their own ruling oligarchy, but have done so with little in the way of financial reward.

That is a bitter reality, but, in addition, it seems like something close to absurdity when you consider that the U.S. media gives favorable treatment to the same Russian oligarchs whom Russian journalists have exposed as being criminals and mobsters. Of course, those same Russian oligarchs are also important business partners of America’s leading oligarchs, and make no mistake: the American oligarchy (and their Russian counterparts)  influence what you read in the (American) papers. They also influence what you see on cable news. Strangely enough, the only television news network in the United States that provides accurate and in-depth reporting on important subjects like government corruption and Wall Street miscreancy is RT News, which is operated by… the Russian government.

* * * * * * * *

Paul Klebnikov of Forbes magazine was a rarity. He was an American journalist who investigated the oligarchs. He investigated only Russian oligarchs, but he reported that Russian oligarchs had extensive business in the United States, and their business partners in the United States—certain American oligarchs—were not so different in kind. Klebnikov was an American journalist who knew that all oligarchs (distinct from entrepreneurs) earn their billions from destruction, not from creation. He was a rare American journalist who understood the threat that the global oligarchy posed to the global financial system, and he was the rare American journalist who recognized the threat that the global oligarchy posed to freedom in all the nations of the world.

Klebnikov was, moreover, one of the only American journalists to investigate the ties that bind many oligarchs to transnational organized crime syndicates. He was the rare American journalist who, moreover, understood that there exists what amounts to global organized crime syndicate that has wrought destruction not only in places like Russia, but here in the United States as well. Klebnikov investigated this syndicate and, of course, he was rewarded with death.

The prevailing theory advanced by the Western press was that Klebnikov was murdered by Chechen gangsters who did not appreciate his second book, this one written in Russian and titled “Conversations with a Barbarian,” which was about a Chechen mafia boss named Khozh-Ahmed Nukhaev. Perhaps it was, in fact, Nukhaev who killed Klebnikov, but what the Western press failed to report was that Nukhaev was one of Berezovsky’s most important business partners. Even worse, the major U.S. news organizations failed to report that Nukhaev’s organized crime syndicate (whose other leaders are notorious terrorists, trained by Osama bin Laden’s operation and U.S. military contractors) has a massive presence in the United States, and even operates its own lobbying outfit in Washington.

The lobbying outfit is called the American Committee for Peace in Chechnya, and this lobbying outfit, established by a Chechen organized crime (and terrorism) syndicate, not only operates with the full approval of officials in Washington, but also has a board of directors that includes some of the most prominent former officials of the U.S. government. Which is an important fact related to an important story that Paul Klebnikov published about this same Chechen organized crime syndicate and Boris Berezovsky. This  story was also reported by Politkovskaya, among other Russian journalists who were subsequently killed, and the story goes like this:

In the 1990s, Berezovsky developed close business ties to the Chechen organized crime syndicate, the top leader of which was a mobster named Movladi Atlangeriyev.  Among other things, this organized crime syndicate provided protection services to Berezovsky, helping Berezovsky fight off other organized criminals who threatened the companies– Logovaz and AvtoVaz—that were the early foundations of Berezovsky’s business empire.  One leader of the Chechen syndicate, Mogomed Ismailov, served as the head of Berezovsky’s security service.

Another leader of the syndicate was Nukhaev (the subject of Klebnikov’s second book). Nukhaev was granted a significant stake in LugoVaz, and later the Chechen organized crime syndicate (sometimes referred to as the Lozanskaya Gang, though it goes by other names as well) helped Berezovsky and another oligarch, Roman Abramovich, gain control over the larger portion of Russian’s massive aluminum and other mining industries.

The aluminum industry was so infested with organized criminals that there were pitched gun battles and dozens of murders as competing syndicates fought for control. This was known in Russia as the “aluminum wars” and the winners were organized criminals who handed control to Berezovsky and Abramovich.  One of those organized crime figures was named Michael Chernoy, who remained a partner of Berezovsky and Abramovich. It was widely reported that Chernoy (like Berezovksy)had business ties to not only Russian and Chechen organized crime syndicates, but also elements of the Russian intelligence services.

Notably, Chernoy (like Berezovksy) also had close ties to at least one faction of the regime in Washington.  In addition, Chernoy was the lead sponsor of an organization called The Intelligence Summit, which invited spymasters from around the world to discuss their tradecraft. Former CIA director James Woolsey sat on The Intelligence Summit’s board of advisers until he resigned, citing Chernoy’s ties to Russian organized crime and various murders.

Chernoy, through Berezovsky, was also a business partner of a hedge fund manager and oil trader named Martin Schlaff, who had been one of Vladimir Putin’s closest associates since the 1980s, when Schlaff worked for the East German Stasi in Dresden and Putin was a KGB operative in that city. It has also been widely reported that Schlaff was a key financial advisor to Libyan dictator Muammar Qaddafi, and brokered a deal that saw leading Israeli politicians allowing Qaddafi to provide financial support to Hamas, the jihadist outfit that controlled Gaza. Schlaff has also been alleged to have paid bribes to successive Israeli prime ministers.

All of these people—Schlaff, Berezovsky, and Chernoy—have, in addition, had dealings with Semion Mogilevich, the Russian organized crime boss who is often referred to as “the most dangerous mobster in the world.” A 1996 classified FBI report (since made public) implicated Mogilevich in everything from market manipulation, narcotics trafficking, and prostitution to the proliferation of radioactive materials. European governments and numerous overseas media reports have stated that the Mogilevich organization has extensive ties to Al Qaeda, and the Mogilevich organization, on at least one occasion,  at offered to procure for Al Qaeda highly enriched (bomb grade uranium.

The White House national security staff has identified the Mogilevich organization as one mafia outfit that not only has ties to the Russian intelligence services, but has also “penetrated” the “legitimate” financial sector (i.e. Wall Street), hence our “National Emergency.”

The FBI now lists Mogilevich as one of its ten “Most Wanted” criminals. But while the White House has described the Mogilevich organization as contributing to the present “National Emergency,” the FBI has failed to arrest even one member of the Mogilevich organized crime syndicate, though many members of that crime syndicate reside in the United States, and all members of that crime syndicate are, of course, criminals. Meanwhile, Mogilevich has hired a lobbyist in Washington, and if you think the republic is in great shape, consider that the lobbyist for the world’s most dangerous mobster is William Sessions, formerly head of the FBI (the outfit that publishes those “Most Wanted” lists).

In 2008, Moscow police arrested Mogilevich. There was a brief story in The New York Times, and that was the last time the name “Mogilevich” was mentioned in that newspaper or by any other major American media organization . The American media did not report that the FBI made no effort to extradite its “Most Wanted” criminal. Nor did the U.S. media report that the arrest in Moscow was a farce—that Mogilevich was quickly released, with the Russian Interior Minister announcing that the charges against the world’s most notorious mafia boss were “not of a particularly grave nature.” Indeed, that was true. The only law enforcement agency that has charged Mogilevich with any crime is the U.S. Department of Justice, and the DOJ indicted Mogilevich for nothing more than perpetrating a relatively routine fraud at company called YBM Magnex.

As of 2013, reports from Moscow suggest that Mogilevich may face no charges whatsoever. This is not a surprise, given Mogilevich’s importance to at least some elements of both the Russian government and the regime in Washington. In 1999, Mogilevich was the central figure in a massive scandal that saw Russian organized crime working with not only elements of the Russian intelligence services and Russian oligarchs, including Berezovksy, but also elements of the regime in Washington, to launder upwards of $10 billion through the Bank of New York. Also linked to the Bank of New York scandal, of course, was Berezovksy, and we will see that the money laundering through the Bank of New York was indeed not only condoned, but also facilitated by a faction of the regime in Washington.

* * * * * * * *

There is more to the story that got Klebnikov killed. As mentioned, this same story was reported (in part) by Russia’s leading investigative  journalist, who was also killed. Indeed, more than 30 Russian journalists have been killed since 1999, and many of them had reported elements of the same story. It is a story (also told in Wikileaks diplomatic cables, and by numerous media outlets in Europe and Russia) about the ties that bind Chechen organized crime syndicates to not only the Russian intelligence services, but also to elements of the regime in Washington. It is, moreover, the story of how Boris Berezovsky orchestrated the rise to power of Vladimir Putin, and how he might have done it with help from Chechen mobsters who are also known as “terrorists” with ties to Al Qaeda.

In 2000, Al Qaeda operatives traveled to Russia to meet with a Chechen organized crime (and terrorism) syndicate that had informed Al Qaeda that it was able to acquire nuclear weapons. The Chechens who met with the Al Qaeda operatives (but did not ultimately deliver the nukes) were members of the same syndicate that was then in business with Berezovsky. The meetings between Al Qaeda operatives and the Chechen organized crime syndicate were reported in cables sent to Washington by the U.S. embassy in Moscow, and the FBI subsequently indicted an outfit called Benevolence International, alleging that Benevolence International had been involved with the Chechen organized crime syndicate and its efforts to acquire nuclear weapons for Osama bin Laden.

The director of the Benevolence International office in Chechnya was a man named Saif e-Masry, and he was not only a top Al Qaeda operative, but also a member of the Chechen crime syndicate that had tried to acquire nukes for Osama bin Laden. The headquarters of Benevolence International, meanwhile, was in Chicago, and the FBI reported not only that the Benevolence International office in Chicago was an “Al Qaeda front,” but also that that the Benevolence International office in Chicago had been involved in the effort to acquire nuclear weapons for Osama bin Laden. However, no Benevolence International official ever did any jail time, and Benevolence International was allowed to remain open for business. At the time when it was dealing with the Chechens, Benevolence International was even partly funded by the U.S. government.

Other members of that same Chechen organized crime (and terrorism) syndicate operated in Chechnya under the auspices of an outfit called the International Islamic Relief Organization (IIRO), which was based in the suburbs of Washington, DC. As we know from earlier chapters of this series, both the IIRO and Benevolence International were founded by leaders of the Muslim Brotherhood, most of them Saudi billionaires. One of the IIRO’s co-founders was Osama bin Laden. Another was Abdurrahman Alamoudi, a key figure in Osama bin Laden’s organization who (see earlier chapters) was employed as consultant to multiple U.S. government agencies. During the 1990s, Mr. Alamoudi also worked at the White House as an advisor to President Bill Clinton.

The IIRO, meanwhile, received funding from the U.S. government,  and it, too, remains open for business to this day, despite the fact that the United Nations (and earnest U.S. government investigators) have described IIRO offices in multiple countries as having been “Al Qaeda fronts.”

The most important of the Muslim Brotherhood billionaires (a co-founder of both the IIRO and Benevolence International) was Sheikh Khalid bin Mahfouz, who was not only Saudi Arabia’s most prominent banker, but also one of history’s most destructive financial criminals. In the 1980s, Sheikh Mahfouz had been the largest shareholder and executive director of the Bank of Credit and Commerce International (BCCI), and he was later sentenced to pay a fine of around $250 million (a fraction of what he  had looted) for his BCCI crimes—crimes that had (in the words of the judge who sentenced Sheikh Mahfouz to pay the fine) “shattered the integrity of the global financial system.”

In later years, Sheikh Mahfouz became quite active in Russia, and he was among the oligarchs who, along with Berezovsky and others, looted the Russian financial system, which collapsed in 1997.

Later chapters of this series will describe the looting of Russia in greater detail, and in those chapters we will see that many others linked to the collapse of the Russian financial system were, like Sheikh Mahfouz, formerly involved with the BCCI enterprise. We will also see that numerous American oligarchs were linked to the looting of Russia, and many of those American oligarchs had similarly been involved with the BCCI enterprise during the 1980s. For the purposes of this chapter, though, it is enough to know that one other person linked to the looting of Russia was Adnan Khashoggi, who built his business empire with finance from Sheikh Mahfouz, and who was also a key figure in the BCCI enterprise during the 1980s, when he was linked (along with Sheikh Mahfouz and others) to the savings and loan crisis that devastated the U.S. economy and ultimately cost American taxpayers upwards of $2 billion in bailouts—a portent of bigger and better things to come.

* * * * * * * * *

In 1999, two years after the collapse of the Russian financial system, Berezovsky and few other Russian oligarchs orchestrated the rise to power of Vladimir Putin, and this was accomplished with help from the Chechen organized crime syndicate that was a partner in Berezovsky’s financial empire. Notably, this same Chechen organized crime syndicate had formerly had involvement with the BCCI enterprise, and some of the leaders of this Chechen organized crime syndicate (e.g. Shamil Basaev) were, of course, terrorists, trained by Osama bin Laden and Co. (and also trained by U.S. military contractors who took their orders from a faction of the regime in Washington). This was the same Chechen organized crime syndicate that allegedly worked with Benevolence International (co-founded by Muslim Brotherhood billionaires, some of them formerly involved with the BCCI enterprise) in an attempt to acquire nukes for Osama bin Laden.

Professor Peter Dale Scott, then of the University of California-Berkley, described the various figures involved in the machinations that resulted in Putin gaining the presidency as a “Meta-Group” that resembled the BCCI enterprise. That is to say, Professor Scott noted not only that some of the people in the “Meta-Group” had formerly been involved with the BCCI enterprise, while others (e.g. Berezovsky) were business partners of  former BCCI figures, but the “Meta Group” resembled the BCCI enterprise in that it often pursued political and geopolitical objectives that had the advantage of being profitable (with the profits enabling members of the Meta Group to accumulate further power for themselves, and the power, in turn, delivering still more profits).

I will not repeat everything that has been reported about this “Meta-Group” and its machinations to deliver the presidency to Vladimir Putin, but I will repeat some key facts, and introduce some additional facts, many of which have been noted not only by Professor Scott, but also by Paul Klebnikov, former Russian intelligence officials, officials of numerous countries around the world (none of them in Washington), and leading journalists almost everywhere other than in the United States. In every case, the people who seriously investigated the facts have concluded that Berezovsky and others in the “Meta Group” elevated Putin to the power by instigating the second war in Chechnya, which began in 1999, and which rallied the Russian public behind Putin’s candidacy for the presidency.

Klebnikov and all the others (including former Russian intelligence officials)  alleged that in the lead-up to the second war in Chechnya, elements of the Russian intelligence services orchestrated several terrorist attacks, and attributed them to Chechens. Since then, it has been concluded even by the Russian courts that the Russian intelligence services did stage at least one Chechen “terrorist attack”, a bombing that killed an unspecified number of people and collapsed a bridge. The FSB says that it was merely a training exercise to prepare Russia’s intelligence operatives for real Chechen attacks.

In September 1999, residents of an apartment complex in the Russian city of Ryazan discovered explosives in the basement of their building. The Russian government initially attributed the explosives to “Chechen terrorists” and vowed to arrest the terrorists in short order. But when all evidence pointed to the explosives having belonged to the FSB (the former KGB), Russian government spokesmen admitted that the FSB had planted them.  As in the case of the exploded bridge, however, the spokesmen claimed that the FSB had planted the explosives in Ryazan as a “training exercise” to see if local officials were vigilant in the face of the terrorist threat emanating from Chechnya.

The Russian government also insisted that the explosives were not real, which seemed to contradict the findings of police officers who had initially examined them with equipment that detected Hexogen, an explosive that had been stockpiled by the Russian intelligence services but would have been almost impossible for Islamic terrorists to have obtained without the assistance of rogue officials of some government. Meanwhile, in August 1999, a few weeks prior to the Ryazan incident, an army of several thousand Chechen soldiers had invaded Dagestan, and proclaimed both Chechnya and Dagestan (which neighbored Chechnya) to be independent Islamic Republics.

Citing the alleged terrorist attacks and the invasion of Dagestan as justification, the Russian government ordered the Russian military to invade Chechnya, where the Chechen “rebels” were based, and so began the second war in Chechnya—a war that rallied the Russian public behind strongman Vladimir Putin’s campaign for the presidency.

The invasion of Dagestan was led by two men. One was an Islamic fundamentalist from Saudi Arabia who went by the name Ibn al-Khattab, and who had been trained by Al Qaeda. The other was the notorious Chechen terrorist Shamil Basaev. As noted earlier, Basaev had received training at Al Qaeda camps and he had also received training from U..S. military contractors. Recall also that he had once (in 1995) planted radioactive substances in a Moscow park. When Basaev and Ibn al-Khattab led the invasion of Dagestan, the Russian military invaded neighboring Chechnya, where the rebels were based. This, of course, ignited a terrible war, and as noted by Klebnikov and countless others, there were excellent reasons to believe that this war was orchestrated by Berezovsky and other oligarchs.

One reason we would be justified in at least raising questions about this war is that Berezovsky (who was then the Russian government’s modern-day Rasputin) had, of course, boasted of a long-standing relationship with Basaev. Not only was Basaev a member of the same Chechen organized crime syndicate that had helped Berezovsky build his business empire, but Berezovsky had long led Russia’s negotiations (many of them with Basaev) for the release of people who had been kidnapped for ransom by the Chechens. Berezovsky always insisted that he was just trying to help secure the release of hostages, but as Klebnikov reported, former Moscow police officials who monitored the negotiations concluded that “Berezovsky served as a banker for the Chechen kidnappers, rounding up and transferring the ransom payments from the Russian side…” Klebnikov cited taped conversations that seemed to support the allegation that Berezovsky was essentially helping the Chechens run a kidnapping racket.

Meanwhile, Berezovsky had been forced to admit that he had once “donated” $1 million dollars to Basaev. When pressed to explain this donation, Berezovsky claimed that it was for the “reconstruction of a cement factory.” That is possibly true, but it seemed strange to some people that Berezovsky was building a cement factory in Chechnya for a guy (Basaev) who was one of the world’s most notorious Islamic terrorists, and who was about to lead the invasion of Dagestan, thereby igniting a second war in Chechnya (which was already in ruins as the result of an earlier war).

In 2004, as noted, Basaev ordered what turned out to be one of the most horrific terrorist operations of all time. That operation saw Chechen terrorists take more than 1,000 people hostage at a school in the Russian city of Beslan. Russian security forces stormed the school with tanks, incendiary rockets and other heavy weapons. Ultimately, more 300 people, including 186 children, were killed (either by the terrorists or the Russians, depending on who is telling the story). Nobody has accused the Russian government of complicity in the Beslan hostage-taking, but, of course, elements of the Russian intelligence services were accused of orchestrating the 1999 terrorist attacks that were cited (along with the invasion of Dagestan) as justification for Russia entering into the second Chechen war. We will see that there is some justification for asking whether elements of the regime in Washington were also involved.

As Klebnikov wrote: “The fact that Berezovsky, together with other members of the [then Russian President] Yeltsin inner circle had long maintained a secret relationship with Chechen extremists gave rise to the suspicion that the 1999 apartment bombings had been organized by the Russians themselves.”  Klebnikov suspected the same of the Dagestan invasion, and he was far from the only one. The French newspaper Le Monde reported that the Russian arms export monopoly (now headed by Sergei Chemezov, who features in later chapter of this story, wherein we will discuss his ties to the regime in Washington) had provided Basaev’s men with weapons before they invaded Dagestan..

The French newspaper also reported that in the summer of 1999, just prior to the invasion, Basaev and other Chechen commanders (a.k.a. terrorist/mobsters) had traveled to the French resort town of Biarritz to meet with Berezovsky and Alexander Voloshin, who was then Yeltsin’s chief of staff, and was among those trying to ensure that Putin would be Yeltsin’s successor. Berezovsky responded that he had not met a Chechen commander in Biarritz, but had gone to Biarritz to meet with Vladimir Putin, the president in waiting.

The Le Monde story was remarkably similar to other stories about Basaev meeting with Russian officials in France. For example, the Russian newspaper Versiya reported that the French secret services had monitored a meeting in France between Basaev and Russian government officials, including Alexander Voloshin (the chief of staff named in the Le Monde story). A Russian intelligence official named Aleksander [a.k.a. Anton] Surikov (who was himself placed at the meeting) later corroborated this story, and it was also corroborated in a book (“Blowing up Russia”) that was co-authored by a Boston academic named Yuri Felshtinsky and Alexander Litvinenko, a former Russian intelligence operative who was (at the time when he co-authored the book) employed by Berezovsky. The book asserts that the meetings between Basaev and Voloshin occurred, but unlike some media stories, it does not mention the presence or involvement of Berezovsky.

In addition, the many reports are consistent in stating that the result of this meeting was that Basaev agreed to lead the invasion of Dagestan, while the Russians (including, in most accounts, Berezovksy) at the meeting agreed that they would arrange for the Russian government to respond by invading Chechnya, thereby precipitating a second war in Chechnya. The Russian officials involved in this meeting included not only Alexander Voloshin, but also the above-mentioned Anton Surikov, who was an official of the GRU, Russia’s military intelligence service, and also a board member with company called Far West, LLC. Surikov, as mentioned, has confirmed that the meeting occurred, but he has not elaborated on the outcome.

Others who attended the meeting were, like Surikov, board members of Far West,  LLC. Importantly, Far West, meanwhile, had been linked to the drug trade, and it was, at this time in 1999, operating as joint venture business with Halliburton, the big U.S. contractor. Far West, LLC also had dealings with Diligence, LLC, a U.S. military contractor that was, at this time in 1999, providing training to the Chechen separatists. Those same Chechen separatists were, of course, also mobsters and narco-terrorists, and they had received some additional training from Osama bin Laden & Company.

Notably, U.S. military contractors were, at this time in 1999, also training the Kosovo Liberation Army, and President Clinton had ordered to the U.S. military to go to war in support of the Kosovo Liberation Army’s campaign against the army of Serbian leader Slobodan Milosevic. Like the Chechens, the KLA was a narco-terrorist organization (founded by Albanian organized crime figures) and the KLA received training not only from U.S. military contractors, but also from members of Osama bin Laden’s organization who were operating in the Balkans under the auspices of the IIRO.

Others who attended the meeting with Basaev and Berezovksy in France (all board members of Far West LLC) were: Ruslan Saidov, who had extensive dealings with the Habib Bank, which controls what used to be BCCI’s operation in Pakistan;  Alfonso Davidovich, a Venezuelan banker, who was formerly involved with the BCCI enterprise, and who was widely reported to have business relationships with the Cali Cartel and the FARC (i.e. a narco-terrorist outfit in Colombia); and Yakov Kosman, an Israeli-German businessman who was, at the time, the top financial advisor to Hashim Thaci, leader of the Kosovo Liberation Army (KLA).

Every account further states that the meeting between Basaev, Russian government officials, and the others, including Berezovksy, took place at a villa near the French resort of Nice. And all of these accounts (citing French secret service sources, among others) report that the villa belonged to the former BCCI figure Adnan Khashoggi, a long time associate of Berezovsky. It was Khashoggi who hosted the meeting. And it was likely he who brokered the discussions about the invasion of Dagestan.

Khashoggi, meanwhile, was involved with both the IIRO and  Benevolence International, whose offices in Chechnya were, of course, managed by members of the same Chechen organized crime (and terrorism) syndicate that had invaded Dagestan.  Meanwhile (see earlier chapters of this series), the IIRO’s offices in the Balkans were managed by Al Qaeda operatives who were training the Kosovo Liberation Army, and the White House employed several IIRO officials (including Mr. Alamoudi, who was key figure in Osama bin Laden’s organization) as advisors to President Bill Clinton (who, of course, had just ordered the U.S. military to go to war in support of the Kosovo Liberation Army’s campaign against Serbian President Slobodan Milosevic).

At this time, of course, not only was the Clinton administration quietly sponsoring the Chechens who had invaded Dagestan, but the Chechens had established their lobbying outfit in Washington, and Berezovsky was already one of the biggest donors to both the Democratic and Republican parties. Khashoggi, too, was big donor to the Republican-Democratic Party, and he had been on close terms with every U.S. president since the days of Richard Nixon. Others in the “Meta-Group” had close ties to Washington as well, and it is possible that their goal in orchestrating the invasion of Dagestan was not only to elevate Putin to the presidency, but also to curry favor in Washington.

In any event, the rest was history. Putin unexpectedly cracked down on Berezovsky and some of his associates, including the Chechens, and the U.S. government (along with the official U.S. media) reported that the crackdown was evidence that Russia, under Putin, had become a tyrannical police state. Meanwhile, Berezovsky and his associates, among them the Chechens and a host of former BCCI figures, including Sheikh Mahfouz (one of Osama bin Laden’s most important business partners) and Khashoggi, achieved still greater favor with the U.S. government, which treated them all as if they were themselves prominent members of the American establishment. The U.S. government also welcomed these criminals, mobsters, and terrorists to the United States, where, of course, they were never be arrested for the crimes (such as busting out the global economy) that they perpetrated in partnership (as we shall see) with elements of the regime in Washington and some of America’s leading oligarchs.

* * * * * * * * *

After Putin and Berezovsky allegedly had their falling out, Berezovsky moved to London where he and other “exiles” formed a peculiar group called “The London Circle,” which frequently advocated for reform in Russia and for the removal of Putin from the presidency. Until 2006, one member of “The London Circle” was Alexander Litvinenko, the former intelligence (FSB) operative who was employed by Berezovsky (and who later co-authored a book alleging that Basaev and Russian officials had conspired together in the terrorist attacks and the invasion Dagestan that resulted in the second Chechen war, though this book did not mention Berezovsky’s role in any of these events).

In 1998, while still employed by the FSB, Litvinenko had held a dramatic press conference announcing that the FSB had ordered him to assassinate Berezovsky. Many people (including Klebnikov) found his story improbable, and speculated that it might have been intended to benefit Berezovsky, who had been working closely with Litvinenko in his dealings with the Chechens. At the time, Litvinenko was also moonlighting as Berezovsky’s bodyguard, and Berezovsky had just been embarrassed by the publication of compromising information about some of his business dealings related to his part ownership of the Russian airline Aeroflot.

There were, more specifically, suspicions (never proven) that the compromising information had come from the FSB, and there were reports that Berezovsky’s allies in the Russian government wished to remove the head of the FSB, Nikolai Kovalev, and replace him with someone who was more amenable to the Berezovsky clique’s agenda. The scandal surrounding Litvinenko’s announcement seemed to serve those purposes. When Litvinenko said he had been ordered to kill Berezovsky, Kovalev was forced to resign, and Vladimir Putin was named to replace him as head of the FSB, which was the first big step in Putin’s rise to the presidency a year later.

According to Klebnikov, “most knowledgeable observers concluded that the alleged FSB plot to assassinate Berezovsky was a fabrication.” Sergei Kiriyenko, who was then Russian prime minister, told Klebnikov that it was “some sort of a trick” devised by Berezovsky in furtherance of his ambitions to greater power in Russia. All of which left many observers surprised when Putin and Berezovsky later had their falling out. Most Western media assume that Putin and Berezovsky had become bitter rivals, but some in Russia think that the two men remained secret allies. According to this theory, their dramatic falling out (which occurred immediately after Berezovsky orchestrated Putin’s rise to power) was another conspiratorial “trick” aimed at covering up the true nature of their relationship and the role that Berezovsky and Chechen terrorists played in elevating Putin to the presidency.

Meanwhile, numerous credible sources (including, for example, most Russian accounts of the 1992-1993 war in Abkhazia, where Basaev and other Chechen terrorists had their first exposure to battle) have come close to proving that the Chechens had long-standing ties to the Russian military and intelligence services. This is an opinion shared by earnest U.S. diplomats (distinct from the official spokesmen in Washington), who inadvertently shared their opinions with Wikileaks.

As for the nature of the relationship between Berezovsky and the Russian intelligence apparatus (led by Vladimir Putin), I do not have further insight, except to say that the relationship had a strange history, and it became only more surreal after Berezovsky (once the most powerful oligarch in Russia, the man who made Putin president, and also the man most widely credited with the wholesale corruption of the Russian government, not to mention the bust-out of the Russian economy) suddenly assumed a new identity as a conscientious reformist, dissident, and exile.

The weirdness reached its peak in 2006, when Berezovsky’s employee, Aleksander Litvinenko (the former FSB officer, then living with Berezovsky in British “exile”), was poisoned by radioactive polonium and died. More specifically, Litvinenko was killed with polonium 210, and it was a matter of grave concern that this radioactive substance was smuggled into Britain. In 2003, the Nuclear Regulatory Commission had listed polonium 210 as one of the ten radioactive materials that were of “greatest concern” because they could be used by terrorists to make a “dirty” bomb.  The amount of polonium 210 that killed Litvinenko was enough to have built a bomb that would have been capable of contaminating a large segment of any major city with cancer-causing radioactive poison.

Litvinenko had devoted much of the three years prior to his death to advancing the theory (reported also in his book, “Blowing Up Russia,”) that the Russian intelligence services had ties to Chechen terrorists and orchestrated the 1999 terrorist attacks in Russia and the invasion of Dagestan to elevate Putin in the presidency. However, as I mentioned, Litvinenko did not name his employer, Berezovsky, as having any role in the supposed conspiracy.

Just prior to his death, Litvinenko had promised to release new evidence that (according to Litvinenko) linked the Russian government directly to Al Qaeda. After his death, the Russian government announced that it was Litvinenko and Berezovsky who had ties to Al Qaeda, and that Litvinenko had accidentally poisoned himself with the radioactive polonium while building a dirty “nuclear bomb” for Osama bin Laden. The British government (and most of the Western media) blamed the Litvinenko murder on the Russian government.

Many also blamed the Russian government for the murders of Anna Politkovskaya and other journalists who had close working relationships with Litvinenko and had been killed that same year (2006). However, another theory (and one worth seriously considering) is that Litvinenko was killed by Berezovksy or other agents of the regime in Washington. The British government has reported that the prime suspect was an FSB official named Andrei Logovoy, but he was one of Berezovsky’s long-time coconspirators, with close ties to the regime in Washington. Litvinenko’s father, meanwhile, has reported that Litvinenko feared that he might be killed by Berezovksy, and had been threatened by Berezovsky’s mysterious publicist, Alexander Goldfarb, who was also a microbiologist and “political activist” linked to the Soros Foundation various other U.S. government-sponsored programs to unseat governments in Eastern Europe. (Goldfarb, however, has not been accused of wrongdoing by any law enforcement agency).

Shortly before Litvinenko was killed, Basaev (the Chechen terrorist at center of the supposed conspiracy) was killed, and many of the Chechen organized crime figures that had played a role in building Berezovsky’s business empire were also killed. It seems likely that all of these killings were likely part of larger effort to witnesses to the machinations leading to the Chechen war. This might also explain the mysterious “suicide” of Berezovsky this year.

Nukhaev, the Chechen mafia boss (and Berezovsky business partner) who had featured in Klebnikov’s second book, and whom the Western media suspected of ordering Klebnikov’s murder in 2004, has since  disappeared (his whereabouts remain unknown). However, other members of this same Chechen organized crime syndicate are known to be residents of the United States. They were (and are) still operating their influential lobbying organization (the American Committee for Peace in Chechnya).

Meanwhile, the Russian government has stated repeatedly that Berezovsky had ties to “Chechen terrorists” (many of them trained by Al Qaeda) and that Berezovsky might have coordinated the invasion of Dagestan, but the Russian government insists that Putin was unaware of this at the time when Berezovsky was serving as Putin’s consigliore-in-chief.  Russian Deputy Interior Minister Arkady Yadelev has announced that Litvinenko, prior to his death, had visited Chechnya to kill witnesses who linked Berezovsky to the terrorist leader Basaev.

Previously, of course, Litvinenko (who was then employed by Berezovsky) was among those leading efforts to expose ties between Basaev and the Russian intelligence services.

Since it had been widely accepted by almost everyone that Basaev had ties to Berezovsky, and it has also been widely accepted that Berezovsky worked with elements of Russian intelligence to orchestrate Putin’s rise to power, it is unclear why Berezovsky’s employee (the former intelligence officer Litvinenko) would have advertised Basaev’s ties to Russian intelligence, and it is unclear why the Russian government would have advertised Basaev’s ties to Berezovsky. It seems as if they were all telling basically the same story, and at the same time sowing confusion as to the specifics and their implications.

Meanwhile, the new “Godfather of the Kremlin” is widely reported to be Roman Abramovich, who was Berezovsky’s most important business partner (for a time, Abramovich and Berezovsky effectively ran a joint-venture that controlled many of Russia’s biggest businesses and its most lucrative commodities, including oil and metals) until recently when the ruling family of Abu Dhabi (formerly among the founding shareholders of BCCI) was chosen to broker a division of their assets.

Many reports described Putin and Abramovich has having something like a father-son relationship, with there being some dispute as to who is the father—Abramovich or Putin. Abramovich and Berezovsky, meanwhile, fought a $3.2 billion lawsuit, with Berezovsky claiming that Abramovich forced him to sell his shares in their joint ventures at below-market prices, and Abramovich claiming that he had to pay $2 billion simply to finance Berezovsky’s activities as Russia’s “political godfather.”

More specifically, Abramovich says he had to pay $2 billion in bribes and luxurious gifts that Berezovsky and Abramovich used to cement their relationships with the Russian government. So Abramovich, who is now Putin’s “son” or “father”, claims that he had to pay $2 billion so that his business partner, Berezovsky, could be Putin’s “godfather.” Why Abramovich would admit this remains an unanswered question, but it fits the pattern of admitting to corrupt relationships, while at the same time sowing confusion as to the precise nature of those relationships and their implications.

At any rate, while there remains plenty of confusion with regards to Russia, there is enough clarity to say with a high degree of certainty that Russian oligarchs and associated mobsters and terrorists (all of them either ignored by the major U.S. news organizations or, in the case of the oligarchs, described by the major U.S. news organizations as “prominent businessmen”) pose a threat to what is commonly referred to as “civilization.” In addition, there is no doubt that President Obama was right to say that there remains a “nexus” between Russian organized crime syndicates, the Russian intelligence services, and various terrorist organizations, though the “nexus” seems also to include elements of the regime in Washington and the president himself, not to mention many of Wall Street’s leading lights.

Therefore, we need to examine this “nexus” in greater detail. Indeed, it is matter of some urgency that we identify all of the miscreants in this “nexus” because the “nexus” presently poses what is, without doubt, the single biggest threat to not only the stability of the global financial system, but also pretty much everything else that matters—e.g. our freedom, our democracy, and the future of our kids. This will become more than apparent to readers of the next chapters in this, the Global Bust-Out Series, wherein the other miscreants in the nexus will be identified and more full exposed, while the damage that they have done will be more precisely explicated and quantified. So please stay tuned to DeepCapture.com (motto: “We are the red pill”).

To be continued…

Mark Mitchell spent most of his career working for mainstream news publications before joining DeepCapture.com

 

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“The Global Bust-Out Series (Chapter 7): Michael Milken and the “Insider Trading” Network (as of 2013)

“The Global Bust-Out Series (Chapter 7): Michael Milken and the “Insider Trading” Network (as of 2013)

This is Chapter 7 of a multi-chapter series. On your right is a Table of Contents to all chapters published so far.

* * * * * * * * *

In earlier chapters of this series, we learned about an incredible enterprise known as the Bank of Credit and Commerce International (BCCI), which was operated by oligarchs with ties to the Muslim Brotherhood in partnership with governments that were among the Muslim Brotherhood’s principal state sponsors. We also learned that the BCCI enterprise operated with the consent and protection of Washington even though it not only counted among its partners numerous mobsters and global terrorists, but was also operating what amounted to a transnational organized crime syndicate involved in everything from the trafficking of narcotics and nuclear weapons components to terrorism and the perpetration of destructive financial crime.

In addition, we learned that BCCI counted among its most important business partners some of the leading figures of the American establishment, including Michael Milken, who was, during the 1980s, the most powerful financial operator on Wall Street. As we know, Milken and some of his closest associates, in league with the BCCI enterprise, perpetrated the “bust-outs” of numerous savings and loan banks, thereby contributing to the devastating savings and loan crisis that began in the late 1980s, and which ultimately cost taxpayers more than $2 trillion in bailouts—a portent of bigger and better things to come.

Also involved with these “bust outs” were (see earlier chapters of this series) some of the nation’s leading organized crime figures, such as Carlos Marcello, who was then the top Mafia boss in the city of New Orleans. Meanwhile, we know, BCCI was involved with a global network of brokerages, most of them operated by people with ties to organized crime, and most of them specializing in the “bust outs” of small to medium-sized publicly listed companies. As a judge remarked after BCCI shut its doors in 1991, the BCCI enterprise singlehandedly “shattered the integrity of the global financial system.”

And history did not end in 1991, when BCCI was shut down.

Most of BCCI’s former principals and their partners (“the larger BCCI enterprise”) continued in the years that followed to involve themselves with similar enterprises, the only difference being that the enterprises came to include some new and younger players, while the enterprises innovated new and more destructive financial schemes. Indeed, we will see that people formerly involved with the BCCI enterprise, along with their newly acquired business partners, contributed significantly to the great meltdown of 2008, and are presently threatening to deliver a repeat performance.

This might be one reason why the president of the United States was recently moved to take the unprecedented step of declaring a state of “National Emergency” in response to certain conditions that currently prevail in the American markets. See Chapter 1 of this series for more on the “National Emergency,” but I will remind readers that in the summer of 2011, President Barack Obama, in explaining why he had declared a “National Emergency,” stated that there was a clear “nexus” between transnational organized crime syndicates, the intelligence services of several unnamed countries, and the world’s leading terrorist organizations.

In addition, the president explained that transnational organized crime syndicates (and, we can confirm, others in the “nexus,”) had “penetrated” the “legitimate financial sector” (i.e. Wall Street). Not only that, but the president stated that this was a “National Emergency” because transnational organized crime syndicates with ties to terrorist organizations (presumably with help from the “legitimate” financial sector on Wall Street) were “undermining markets” to such an extent that they now posed a serious and imminent “threat to stability of the global financial system.”

Unfortunately, officials in Washington have yet to prosecute any of the people (e.g. mobsters, terrorist financiers, and miscreants on Wall Street) who account for our present “National Emergency.” Indeed, as was the case in the 1980s, when BCCI and its partners owned many of America’s leading politicians (including multiple U.S. presidents), it presently seems to be the case that Washington has been “deep captured” by a network (or “nexus,” as the president calls it) that includes the world’s leading mobsters, billionaires with ties to terrorist organizations, and the “legitimate” miscreants on Wall Street who do business with mobsters and terrorists.

In addition, officials in Washington have done little to crack down on the sorts destructive financial weapons (e.g. the “bust outs” of major banks and associated schemes, such as manipulative short selling, self-destruct CDO’s, mortgage fraud, death spiral finance, toxic debt, etc.) that nearly destroyed the world in 2008, and which are now, once again, threatening to collapse the global financial system.

Later chapters of this series will discuss in much greater detail the “global bust-out” that accounts for our current predicament, but first it will be useful to review a bit more history so far as it concerns the network of Michael Milken, formerly known as the most powerful man on Wall Street, later known as one of history’s most destructive financial criminals, and presently known (to readers of the major U.S. newspapers and officials in Washington) as one of Wall Street’s all-time greatest heroes and a “prominent” fixture of the American establishment, worthy of our respect and admiration.

* * * * * * * * *

When Michael Milken was indicted in 1989, the major U.S. news organizations reported that he and one of his co-conspirators, Ivan Boesky, were the central figures in a nationwide “insider trading” network. In addition, the major U.S. news organizations reported that Milken was indicted thanks mostly to the fact that Boesky had cooperated with the government, providing the key evidence that allowed prosecutors to expose the “insider trading” network. It was true that Milken and Boesky were involved in “insider trading,” but the reports by the major U.S. news organizations contained some important omissions.

For starters, Milken and his network were involved in much more than “insider trading.” As we know from earlier chapters of his series, Milken and his closest associates, including Boesky, conspired with the BCCI enterprise and some of the nation’s leading organized crime figures to “bust out” (i.e. loot and destroy) many of the nation’s leading savings and loan banks. We also know that Milken was involved with numerous brokerages (some of them linked to the BCCI enterprise) that specialized in perpetrating the “pump and dump” bust-outs of small to medium-sized publicly listed companies.

In addition, a careful reading of Milken’s 99-count indictment (with many of those counts pertaining to his “bust-outs” of savings and loan banks and other companies, though he pled guilty to only seven counts) reveals that Boesky provided little of the information that was used to prosecute Milken. Instead, the government obtained the vast majority of the evidence used against Milken (and Boesky) in a 1989 raid of a major investment and brokerage operation called Princeton Newport, which had been a key component of the Milken network, involved not only in insider trading, but also the full panoply of other schemes that Milken and his network perpetrated during the 1980s. At the time, Princeton Newport was operated by man named Edward O. Thorpe, who was most famous for having worked with the Genovese Mafia family to develop a method for beating the black-jack tables in Las Vegas (Thorpe has never been charged with any crime, and he is presently one of the nation’s most prominent hedge fund managers).

Pulitzer Prize winning author James Stewart similarly reported in “Den of Thieves” (the seminal work on the government’s prosecution of Milken) that Boesky provided little information to the government. According to Stewart, Boesky told the government that he could not testify against Milken because he was afraid of what might happen to him. As Boesky put it, Milken had “friends in Vegas” – an apparent reference to the Mafia. As Stewart also reported, soon after Boesky expressed his fears, one of Milken’s closest associates, John Mulheren, got into his car and headed towards Boesky’s house. Police officers had been watching Mulheren, and knew that he had a gym bag in his car loaded with two handguns, a 12-gauge shotgun, and a .233 caliber Galil assault rifle.

Suspecting that Mulheren planned to murder Boesky, the cops arrested Mulheren and put him in jail, where Mulheren spent most of his time conversing with Anthony “Fat Tony” Salerno, who had been the top boss of the Genovese Mafia family until he was jailed on charges of manslaughter. Mulheren himself was investigated for his alleged role in Milken’s network, so it is possible that Mulheren thought about killing Boesky to keep Boesky from providing the government with information about his own (Mulheren’s) activities. Alternatively, it is possible, as some have reported, that Mulheren was simply on the wrong psychiatric medications and didn’t know what he was doing.

Either way, Mulheren was never charged for his suspected role in Milken’s insider trading (and “bust out”) network, and nor was he charged for trying to kill Boesky. He was quickly released from prison, and he subsequently reconciled with Boesky. Contrary to the message put forth by Milken’s public relations machine (which maintains that Milken despises Boesky, and that Milken was convicted only because Boesky was a dirty rat who provided the government with false information about Milken’s activities), Milken also reconciled with Boesky, and after Milken was released from prison (he served two years of a ten year sentence), he and Boesky began again to do business together.

Meanwhile, Mulheren c0-founded, with a trader named Izzy Englander, a hedge fund called Millennium Management, and though Mulheren died in 2003, Millennium is presently one of the most powerful hedge funds in the nation.

In 2010, the media began reporting that the FBI was once again investigating what the FBI described as a “network” of financial operators who were involved in “insider trading.” According to the FBI, this was, in fact, the biggest “insider trading” investigation in FBI history. This investigation is presently ongoing, and a key focus of the investigation, according to media reports, is the giant hedge fund SAC Capital, which is run by Steve Cohen. Back in the 1980s, Cohen was investigated by the Securities and Exchange Commission (SEC) for allegedly trading on inside information that he received from Milken’s shop at Drexel Burnham Lambert, and back in the 1980s, Cohen and all the others in Milken’s insider trading “network” were, of course, involved in much else (e.g. manipulative short selling, the “bust-outs” of publicly listed companies, etc.) besides insider trading.

Similarly, the “insider trading network” that the FBI is presently investigating has been involved in much else besides insider trading. Previous DeepCapture stories have provided ample evidence that SAC Capital and other hedge funds in its “network” have perpetrated a great deal of manipulative short selling, and they have, along with others, including Michael Milken (who is. to this day a key figure, along with SAC Capital and others, in an “insider trading” network), perpetrated the “bust-outs” of publicly listed companies. Cohen himself has not been charged with any crime, but multiple traders have been indicted for insider trading that they conducted while working for SAC Capital, and the media has reported that prosecutors are hoping to indict Cohen and SAC Capital, though the media continues to report that SAC Capital’s only alleged offense has been to trade on inside information.

Meanwhile, it is clear from SEC filings that SAC Capital and a larger “network” of other hedge funds (many of which employ former SAC Capital traders, and many of which have ties to Milken going back to the 1908s) regularly trade in the same stocks, and many of these hedge funds have not only coordinated their manipulative short selling attacks, but have also come under closer scrutiny during the course of the FBI’s investigation into what the FBI continues to describe as a “network” of financial operators.

One hedge fund in this “network” is Millennium Management, the outfit that was founded by Mulheren and Izzy Englander. The FBI has not publicly implicated Millennium in the “insider trading” network, but Millennium has acknowledged that it is concerned about the greater scrutiny. Indeed, soon after the FBI investigation became big news, Millennium hired an advisory board whose job is to make sure the hedge fund remains in compliance with regulations. Millennium’s advisory board includes former FBI Director Louis Freeh, former SEC enforcement division chief Stanley Sporkin, and former SEC Chairman Harvey Pitt (who has been a leading advocate of reform to address the problem of manipulative short selling).

Hopefully that advisory board will keep Millennium in compliance with the rules, and it will certainly keep Millennium immune from further scrutiny on the part of the FBI and the SEC, but it is clear that Millennium and SAC Capital, along with others in their “network” of hedge funds, have continued to collaborate with Milken, investing in companies that Milken was promoting, and attacking companies that Milken was seeking to undermine or destroy. Some details can be found in my recently published book (title: “The Dendreon Effect: How Felons, Con-men, and Wall Street Insiders Manipulate High-tech Stocks”) which also provides other information about the techniques used by a network of powerful hedge funds (and Michael Milken) to undermine the markets and hurt individual investors.

As we will see in later chapters of this series, this same crowd (i.e. Milken and the “network” that the FBI is now investigating, though so far with no prosecutions of any big fish) contributed to the meltdown of 2008, and continue to pose a threat to the markets today.

For our present purposes, we need to stress that Boesky was right when he said that Milken had “friends in Vegas.” Milken’s best friend in the world, according to Milken, is Steve Wynn, the Las Vegas casino mogul. Meanwhile, Wynn’s friends, according to Scotland Yard, have included the dons of the Genovese Mafia family. Indeed, according to a declassified report written in the late 1980s by Scotland Yard investigators, Wynn had “been operating under the aegis of the Genovese Mafia since he first went to Las Vegas in the 1960s.” Scotland Yard noted that both Wynn and his father had a long standing relationship with Genovese Mafia boss Anthony “Fat Tony” Salerno (the mobster with whom Mulheren spent most of his time convening during his stint in jail).

Wynn, however, denies any relationships with the Mafia, and he has won a defamation lawsuit against a Las Vegas newspaperman who published a book (title: “Running Scared”) that advertised itself as “explaining why a confidential Scotland Yard report calls Wynn a front man for the Genovese crime family.” Wynn also filed a suit against the book’s publisher, Lyle Stuart, who had published other controversial books, such as the “Anarchist Cookbook,” and “Turner Diaries,” which is a fictional account of home-grown rebels overthrowing the “Zionist” government of the United States. In explaining why he had filed a lawsuit against the publisher, Wynn said, “I want to put Lyle Stuart out of business. Every law enforcement agency has always vouched for me that any suggestion of me and organized crime is preposterous. I know one thing: If anybody says any different, they’re a fucking defendant.”

It is true that law enforcement agencies (other than Scotland Yard) have vouched for Wynn. Indeed, former FBI Director Louis Freeh (the same fellow who is employed by Millennium Management) is presently employed by Wynn. Freeh is helping Wynn investigate one of Wynn’s former business partners, a Japanese billionaire named Kazuo Okado. Meanwhile, Wynn has won multiple other defamation lawsuits against people and journalists who have accused him of having ties to the Mafia. For example, Wynn has successfully sued Joe Francis, creator of the “Girls Gone Wild” porn empire. Francis had said that Wynn wanted to “hit me in the back of the head with a shovel and bury me in the desert.” Wynn said that was a “terrible lie,” and that his friend, the Dalai Lama, taught him to be a man of peace and calm.

The takeaway, we must conclude, is that Wynn has no ties to the Mafia. As for Milken’s other closest friends and business partners, however, there can be no doubt that many of them have ties to the Mafia. As we know from earlier chapters of this series, Milken’s closest business partner is Gene Phillips, who was the central figure in the junk bond merry-go-round that Milken operated in the 1980s, and which was a key component of the larger operation to “bust-out” savings and loan banks. Phillips operated (and still does operate) an outfit called Southmark Corporation, which was the largest recipient of Milken junk bond finance in the 1980s. The largest subsidiary of Southmark in the 1980s, meanwhile, was San Jacinto Savings and Loan, which was “busted-out” with help from such Mafia luminaries as Herman Beebe and Carlos Marcello (the top boss of the New Orleans Mafia).

The man whom Gene Phillips appointed as the chief loan officer of San Jacinto Saving and Loan was named Joseph Grosz. Aside from being a banker, Grosz was a leading mobster, affiliated with the Chicago Syndicate, according to prominent journalist Pete Brewton, who is one of the nation’s leading experts on the involvement of organized crime in the savings and loan crisis. Brewton has also reported that San Jacinto’s parent, Southmark, was “used as a mob dumping ground to buy the investments of mobsters,” including not only Herman Beebe and Carlos Marcello, but also organized crime figure Harry Wood, and Morris Shenker, a former lieutenant of Meyer Lansky, then the most powerful mobster in the nation.

In 2000, Phillips was arrested and charged with manipulating stock prices in league with other leading figures in La Cosa Nostra. More specifically, Phillips was arrested as part of Operation Uptick, which was described by FBI spokesmen as the largest Mafia bust in U.S. history. More than 120 people, all with ties to organized crime, were arrested in Operation Uptick, and FBI officials described them as being part of nationwide “network” of stock manipulators, some of whom had committed various other crimes, which included (according to an FBI statement): “controlling and infiltrating broker-dealers…and employing tactics of violence, including threats, extortion, physical intimidation, and the solicitation of murder…”

Some of the 120 people arrested in Operation Uptick were members of Russian organized crime syndicates, while others were, variously, described by the FBI as having ties to each of La Cosa Nostra’s five major families—Genovese, Colombo, Gambino, Bonanno, and Lucchese. Among the 120 defendants, aside from Phillips, were: Robert “Little Robert” Lino, a capo in the Bonanno crime family; Anthony Stropoli, a soldier in the Colombo crime family; Frank “Frankie” Persico, a Colombo Mafia family capo; Sebastian “Sebbie” Rametta, an associate of the Colombo crime family; Robert Gallo, an associate of the Genovese crime family; and John Black, an associate of the Lucchese crime family.

The DOJ charged that Phillips, in league with various members of La Cosa Nostra, had manipulated the stock of one of his companies, an outfit called Transcontinental. Aside from Phillips, the largest shareholder in that company was Michael Milken. Meanwhile, the Dallas Business Journal reported that Phillips “allegedly met with two associates of New York’s legendary Bonanno organized crime family to discuss a plan to bilk a couple of ‘very friendly’ union pension funds through the sale of inflated stock.” However, Phillips was acquitted on all charges. In addition, most of the other people who were arrested as part of Operation Uptick got off with nothing worse than small fines, though this was the biggest Mafia bust in history, according to then FBI director Louis Freeh (who, of course, is now employed by Wynn and Millennium Management).

That same year, 2000, the media reported that an outfit called Sinex Bank was linked to the Bank of New York scandal, which saw the Bank of New York laundering upwards of $10 billion ($3.9 billion of which passed through Sinex Bank) for organized crime syndicates. The syndicate most closely linked to that scandal was the Mogilevich organization, the leader of which was (and is) a Russian (actually Ukranian, but he is a Russian citizen) named Semion Mogilevich, widely known as “the most dangerous mobster in the world.” What the media did not report was that the money laundering involved a network of brokerages that first invested dirty cash into the “bust outs” of publicly listed companies, with the money coming out partially cleaned as short selling profits that were delivered onwards to cooperative banks, including Sinex Bank and the Bank of New York.

Also linked to that money laundering was a brokerage called Sinex Securities, which was a subsidiary of Sinex Bank. Sinex Securities was controlled by Gene Phillips, though it was registered in the name of his son, Brad Phillips (Sinex changed its name to National Alliance Securities when it was linked to the Bank of New York scandal). SEC filings show that Transcontinental (the Phillips outfit whose largest shareholder was Milken, and which was at the center of the Operation Uptick charges) had placed more than 700 thousand of its shares with Sinex as “collateral for borrowings”. That is to say, a chunk of the cash that went through Sinex was delivered, as collateral, to Transcontinental shareholders. However, neither Sinex nor Phillips were charged with any crime related to the Bank of New York scandal.

With the exception of Mogilevich himself, nobody else of any significance was charged with any crime related to the Bank of New York scandal, and Mogilevich (“the most dangerous mobster in the world”) subsequently hired a lobbyist in Washington. Mogilevich’s lobbyist is William Sessions, formerly director of the FBI. The FBI still lists Mogilevich as one of the “Ten Most Wanted” criminals in the world, but there is no evidence that the FBI has ever tried to arrest Mogilevich, and others in the Mogilevich organization continue to this day to operate openly in the United States.

Some of them, we will see, are key figures in the Milken network.

* * * * * * * * *

Back in the 1980s, another of Milken’s closest business associates was Fred Carr, who, like Phillips, was a central figure in the junk bond merry-go-round that was part of the larger scheme (that had help from BCCI) to “bust out” numerous savings and loans banks. Fred Carr used Milken junk bond finance to seize control of Executive Life, and that financial institution (like most of the other savings and loans that Milken’s closest associates took over with Milken junk bond finance) was subsequently looted and demolished (that is, “busted out”).

Prior to taking control of Executive Life, Carr had been a principal with Investors Overseas Service, which had ties to BCCI, and which was, at the time, the biggest Ponzi scheme in history. Investors Overseas had been founded by a financier named Bernard Cornfield, and later involved a criminal named Robert Vesco, who subsequently fled to Cuba and became involved (according to CIA reports) in trafficking drugs with Cuban dictator Fidel Castro. (Castro later claimed that Vesco had been imprisoned in Cuba).

One of Investors Overseas Services’ key “feeders” (that is, one of the people who “fed” the Ponzi much of its money) was Sylvian Ferdman, a Genovese Mafia courier, who routed money into the Investor’s Overseas racket from clients in South America. Another Investors Overseas feeder was John Pullman, whom the U.S. government had named as a close associate of Genovese Mafia boss Anthony “Fat Tony” Salerno. That’s the same “Fat Tony” who was later conversing with Mulheren in prison, and whom the Scotland Yard report linked to Wynn (The Scotland Yard report, however, was false, according to Wynn, and U.S. law enforcement officials have not accused Wynn of having ties to organized crime).

Another key component of Milken’s junk bond merry-go-round in the 1980s was MDC Global, an insurance and savings and loan company that (see Chapter 6 of this series) had been co-founded by a BCCI subsidiary. MDC Global, meanwhile, controlled a brokerage called Blinder Robinson, which specialized in “busting out” small to medium-sized publicly listed companies. MDC Global, of course, was itself “busted out,” and in 1989, Blinder Robinson was indicted, along with its founder, Meyer Blinder.

Blinder Robinson was known as “Blind’em and Rob’em” because it was not only a key player in a nationwide stock manipulation network, but also among the most crooked brokerages in America. Among the miscreants who manipulated stocks in league with Blinder Robinson were (according to various indictments) Thomas Quinn and Arnold Kimmes, both of whom (as we know from earlier chapters) had operated a number of brokerages linked to BCCI. Quinn, recall, was an associate of the Genovese Mafia family, while Kimmes had been identified in a 1973 FBI report as a “major organized crime figure.”

When Kimmes was arrested, he escaped prison by ratting on Meyer Blinder, who did not escape prison (though he was quickly released). In 2000, Richard Walker, then the SEC’s director of enforcement, gave testimony to Congress in which he described Blinder Robinson as being part of a “network” of brokerages — including D.H. Blair, Rooney Pace, FN Wolf, A.R. Baron, and many others – that were tied to organized crime. Most of these brokerages had been financed by Michael Milken and/or his close associates.

The proprietor of Rooney Pace, which was financed directly by Milken, was Randolph Pace, who was later indicted for running a $200 million stock manipulation scheme with a man named Judah Wernick. Many of the other brokerages mentioned in the SEC’s Congressional testimony – including D.H. Blair, A.R. Baron, and FN Wolf — were financed by Zev Wolfson, a Milken business associate who also financed Millennium, the hedge fund co-founded by Boesky’s prospective assassin John Mulheren.

D.H. Blair was particularly close to Milken. It was founded by Morty Davis, and run with help from Davis’s son-in-law, Lindsay Rosenwald, who served as vice chairman. After Milken went to prison in 1991, one of Milken’s top Drexel Burnham employees, Richard Maio, became president of D.H. Blair. In 2000, D.H. Blair was charged on multiple counts of stock manipulation and forced to shut its doors. To describe the full extent of D.H. Blair’s relations with La Cosa Nostra and Russian organized crime, I would have to bore you with a list of names so long that this story would begin to read like a telephone directory. But to give you just a small sampling, I will mention that the people indicted in just one of the hundreds of stock manipulation schemes perpetrated by D.H. Blair included: Frank Coppa, a capo in the Bonanno Mafia family; Edward Garafola, a soldier in the Gambino Mafia family; Daniel Persico, a capo in Colombo Mafia family; and Ernest Montevecchi, a soldier in the Genovese Mafia family.

After Milken got out of prison, he hooked up again with D.H. Blair’s former vice chairman, Lindsay Rosenwald, who is now one of the most powerful hedge fund managers in America, and perhaps the single biggest player in the world of biotech stocks. As described in my book (“The Dendreon Effect”), Milken and Rosenwald have sought to destroy biotech companies that were developing promising medicines while promoting dubious companies (financed by Rosenwald and Milken) whose medicines were killing people.

Many other powerful hedge fund managers operating today got their start in the 1980s working for Milken-financed brokerages with ties to organized crime. SEC filings and other evidence compiled by DeepCapture show with perfect clarity that all of the hedge fund managers in this network regularly trade in unison, investing in (or, more often, attacking) the same companies.

This does not mean that they have necessarily broken any laws, but, again, press reports suggest that some of the biggest players in this “network” are currently the targets a massive FBI investigation said to be targeting a “network” of financial operators suspected of insider trading. As I mentioned, one of them is SAC Capital’s Steve Cohen, who was investigated in the 1980s for trading on inside information that he allegedly received from Milken’s shop at Drexel. Cohen has been described by BusinessWeek magazine as “The Most Powerful Trader on the Street.”

When Cohen was investigated for trading on inside information that he received from Drexel, he was not yet a famous hedge fund manager, but he was among the select traders who effectively ran Gruntal & Company , a Mafia-tied brokerage that received much of its finance from Michael Milken.

There were just a few other traders who had special partnership agreements with Gruntal, and who effectively ran the place. I will name most of them, beginning with Maurice Gross, who handled the accounts of the Gambino Mafia family. Gross later founded his own operation with a Pakistani trader and former BCCI figure named Mohammad Ali Khan, who (according to a case filed by the New York attorney general) alighted with some of the Gambino family’s cash. This was no doubt much to the dismay of Gruntal CEO, Howard Silverman, who had come to depend on the Mafia’s good graces.

As of 2008, Silverman was running one of the nation’s biggest “dark pool” trading platforms, an outfit that enabled his hedge fund clients to conduct trading in total anonymity. It should be a matter of concern that a guy who once ran a brokerage with ties to the Mafia went on to run a major “dark pool”–especially since experts such as the authors of a report (see Chapter 1 of this series for details) commissioned by the Department of Defense say that such platforms could easily be deployed to do serious damage to the markets.

One of the people Silverman brought in to help run his brokerage – another of the select traders with special partnerships at Gruntal – was a fellow named Felix Sater, who was (and is) a Russian mobster and a member of the Mogilevich organization (controlled by Semion Mogilevich, often described as the “most dangerous mobster in the world”). While still at Gruntal, Sater was charged with stabbing a Wall Street trader in the face with the broken stem of a wine glass (actually, it was martini glass, according to a man who witnessed the attack).

While still at Gruntal, Sater and several other former Gruntal traders founded a brokerage called White Rock Partners. Most of White Rock’s employees were former Gruntal employees, and there is no doubt that White Rock’s partners all had ties to organized crime. In 1996, the FBI discovered a locker at a Manhattan Mini-Storage in Soho that belonged to Evgeny Klotsman, a White Rock principal who was formerly among the select traders who had effectively run the Milken-financed Gruntal & Company. The FBI announced that the locker contained guns and documents that linked Klotsman and Sater to a “global market manipulation and money laundering network controlled by Russian organized crime.”

In 1999, White Rock (renamed State Street Capital Partners) was indicted for orchestrating stock manipulation schemes in league with the above-mentioned D.H. Blair and A.R. Baron (financed by Zev Wolfson) and five members of La Costa Nostra, including a Genovese Mafia soldier named Ernest Montevechi, and Danny Persico, a capo in the Colombo Mafia family (and the son of Alphonse “Allie Boy” Persico, the top boss of the Colombo Mafia family). White Rock’s principals, in fact, included some of the top bosses of the Colombo Mafia family, among them not only Danny Persico (who was arrested, along with Gene Phillips, in Operation Uptick), but also a Colombo Mafia capo named Greg Scarpa, to whom we will return.

According to one of Felix’s White Rock partners (and according to The New York Times, which lent credence to the story), Felix escaped indictment (he was named only as an unindicted co-conspirator in the White Rock case) because Felix and his other partner, Evgeny Klotsman , had ties to the Russian intelligence services, and promised the U.S. government that they could work with Russian intelligence to buy Osama bin Laden’s stockpile of Stinger missiles (thereby preventing Al Qaeda from using the missiles to shoot down commercial airlines).

It should not be surprising that Felix Sater, a member of the Mogilevich organization, would have ties to Russian intelligence, and it is equally unsurprising that he would be capable of cutting a deal with Al Qaeda. As the White House national security staff made clear in August 2011, when the president announced that organized crime had “penetrated” the financial system (thereby inspiring the president to officially declare an “Emergency Order”), the Mogilevich organization has close ties to both the Russian intelligence services and to multiple terrorist organizations, including Al Qaeda.

A 1996 classified FBI report (since made public) noted that the Mogilevich organization was involved in everything from major league market manipulation to prostitution, Afghan heroin, and trafficking in nuclear weapons materials. This is why Semion Mogilevich sits high on the FBI’s list of “Ten Most Wanted” criminals. But, of course, Mogilevich has a good lobbyist (i.e. a former director of the FBI, the outfit that publishes that “Most Wanted” list), and few, if any, members of the Mogilevich organization are presently in jail. Many of them are residents of the United States, and we will see that many of them, including Sater, remain active in the U.S. markets.

Multiple reports from law enforcement, the United Nations, non-governmental organizations in Russia, and the mainstream media in London (distinct from the mainstream media in the United States, which has a peculiar reluctance to publish anything interesting) state unequivocally that members of the Mogilevich organization have been selling conventional weapons to Al Qaeda for many years. On at least one occasion, the Mogilevich organization tried to sell highly enriched (nuclear bomb grade) uranium to Al Qaeda. This is a matter of dispute for some “experts”, but European Union officials confirm that it is true, and there is evidence that members of the Mogilevich organization did, at a minimum, claim in meetings with Al Qaeda operatives in Europe that they could obtain the nuclear materials.

Felix, through Russian intelligence, was prepared to cut a deal with Osama bin Laden, but the CIA balked when Klotsman demanded that the U.S. government pay him and Felix $3 million for each Stinger missile. Nonetheless, Felix escaped doing jail time, and some of his other associates say that this is because he and his Russian intelligence associates promised that their relationship with Al Qaeda would eventually be put to use for the U.S. government. However, if American officials believe Felix is helping the U.S. government, they are certainly mistaken. Indeed, it is a bit unsettling that this dangerous criminal is still on the loose. Not only was Felix once charged with stabbing a Wall Street trader in the face with the broken stem of a wine glass (actually, a martini glass), but Felix has also threatened to kill multiple other people. For example, Felix Sater has threatened to kill DeepCapture founder Patrick Byrne.

According to one of Felix’s White Rock partners (who has written about this in a book called “The Scorpion and the Frog”), Felix also once threatened to kill a short seller named Alain Chalem, who then ran a brokerage called Taluca Pacific in partnerships with DeCalvacante Mafia capo Phil Abramo, who was widely known at the time as “The King of Wall Street.” As we know from earlier chapters of this series, Abramo had formerly been involved with brokerages linked to the BCCI enterprise.

Felix’s partner says that Felix did not ultimately kill Chalem, and we should assume that he did not, but soon after the threat (in late 1999), Chalem was, in fact, murdered, execution-style, in his New Jersey mansion. The FBI has yet to prosecute anyone for the murder, but media reports have suggested that one suspect was Danny Persico, the Colombo Mafia capo who was a partner in Felix’s White Rock Partners. Other media have reported that the FBI believes the murder was related to Chalem’s dealings with Russian organized crime.

In later years, Felix co-founded a real estate and mortgage outfit called Bayrock. As we will see in later chapters, Bayrock played a role in the larger “bust out” of the mortgage markets, but for the purposes of this chapter, I will note that Bayrock’s former CFO, Jody Kriss, has alleged that Bayrock is a massive money laundering operation. In 2009, Kriss filed a lawsuit to this effect, and noted that Felix had once threatened to have him (Kriss) tortured and then murdered.

One of Bayrock’s co-founders was Tevfik Arif. In 2011, Arif was arrested in Turkey after Turkish commandos raided a party that Arif was holding on a yacht that had once belonged to Mustafa Kemal Ataturk, Turkey’s founding president. Arif, a native of Kazakhstan, was arrested along with a small harem of prostitutes and some unnamed government officials from Central Asia. (It is unclear why the commandos raided the yacht; the media has reported that Arif was charged only with illegally hiring prostitutes, a crime that does not usually result in commando raids).

Another Bayrock partner was Tamir Sapir, a billionaire real estate investor whose real estate portfolio was managed by a man named Frederick Contini, whom the government has named as an associate of the Genovese Mafia family. In 2008, Contini entered a secret plea to racketeering. He has also faced charges for stabbing a man in the face with the stem of a broken wine glass. It seems to be the thing to do.

As Tamir Sapir himself has admitted, he spent his formative years running a company that specialized in selling high-tech electronics equipment to KGB operatives in New York. As Sapir has not admitted (though public records show that it is true), Sapir’s partner in his espionage operation was Semyon Kislin, who was (according to the FBI) a “member” of the Russian organized crime syndicate run by Vyacheslav Ivankov, then the top boss of the Russian mafia in the United States. In 2009, Ivankov was assassinated on a Moscow street, but not before admitting that his organized crime syndicate (which had close ties to the Mogilevich organization) had long been employed by the Russian intelligence services.

It is clear that Felix Sater has maintained relationships that he developed while working as a trader for Gruntal & Company. For example, he remains a close associate of SAC Capital’s Steve Cohen, and a man involved with a private investigation of Felix’s Bayrock says that Felix has laundered money for Cohen and other hedge fund managers. (Cohen presumably would deny this, and he has not been charged with any wrongdoing).

Meanwhile, Bayrock has had partnerships with several investment funds, nearly every one of which is controlled either by Milken’s former top employees at Drexel Burnham, or by others among the small band of people who are Milken’s closest associates. One of Bayrock’s partners, for example, is Apollo Real Estate, part of Apollo Management, a private equity fund controlled by Leon Black, who is one of the most powerful investors in America. Leon Black is the son of Eli Black, who was, in the 1970s, the head of United Brands, formerly known as United Fruit, a company that was accused of everything from bribing tin-pot dictators to dealing with La Cosa Nostra and funneling money to Latin American narco-terrorists.

In 1975, Carl Lindner, another of Milken’s closest associates and a key participant in Milken’s junk-bond merry-go-round and “bust out” scheme , used Milken finance to take over United Brands. In the midst of this takeover, Eli Black crashed through a plate glass window on the 44th floor of the Pan Am Building in New York, and fell to his death (the death was reported as a suicide). After this incident, Eli’s son, Leon Black, was named head of mergers and acquisitions at Drexel Burnham, the investment bank effectively controlled by Milken. The two men became friends, and after Milken’s criminal indictments, Black insisted that Drexel defend his friend at all costs. Even after Milken’s indictments resulted in Drexel’s collapse, Black continued to insist that Milken was innocent, and today the two men are close friends, involved together in multiple business ventures (some described in my book). Milken’s son, Lance, is a partner at Apollo, the Leon Black fund.

Another of the most powerful financiers in America (and also among Milken’s closest associates) is Carl Icahn. In the early 1980s, Icahn was the head of the options department at Gruntal & Company (the outfit whose key clients included the Gambino Mafia family, and whose key traders, such as Felix Sater and Evgeny Klotsman, were major Russian organized crime figures). After leaving Gruntal, Icahn started his own investment outfit, funded mostly by Michael Milken and Zev Wolfson (Wolfson being the guy who funded Mulheren and the above-mentioned Mafia-tied brokerages, which were indicted for schemes they perpetrated with La Cosa Nostra and Felix Sater).

As soon as he launched his investment fund, Carl Icahn hired several key employees: Harvey Houtkin, Allen Barry Witz, Gary Siegler, and Alan Umbria. Meanwhile, Umbria, who represented Icahn on the floor of the American Stock Exchange, served as the front-man for the Genovese Mafia in a New York restaurant called Crisci’s, which was featured in the movie “Donnie Brasco”—a movie about an undercover FBI agent who infiltrates the Mob. Umbria was also the Mafia’s front-man in another New York restaurant — The Court of the Three Sisters.

One day in the late 1980s, Umbria’s close business associate walked into The Court of the Three Sisters and found Umbria presiding over a meeting in one of the restaurant’s private rooms. The business associate was asked to leave before he could hear what was discussed at this meeting, but the businessman knows who was in attendance – namely, Alan Umbria, a collection of Genovese Mafia thugs, and Louis Micelli, who was a stock broker until his untimely death in 2005. In addition to being a stock broker, Micelli was a major league narco-trafficker with deep connections to the drug cartels of Colombia, and to a Paraguay cell of Hezbollah, the jihadist outfit that takes its directions from the regime in Iran.

It was the Paraguay cell of Hezbollah that helped Iran blow up a synagogue in Argentina, and for a long time, this cell trafficked in cocaine from bases in Ciudad del Este and other cities in the “tri-border” region where Brazil, Argentina, and Paraguay meet. That region has since come under greater scrutiny, so Hezbollah’s drug kingpins have moved deeper inside Paraguay, but they continue to traffic coke, working with Hezbollah jihadis resident in North America – especially in Toronto, Detroit, New York, and my hometown, Chicago. Hezbollah’s trafficking operation continues to be a partnership with La Cosa Nostra, the Russian mafia, and (yes) some stock brokers, more of whom we will meet later.

* * * * * * * * *

Back to Gruntal & Company, the brokerage that was financed by Milken.

As we know, there were just a few traders who had special partnerships with Gruntal, and who effectively ran the place. In addition, we know, all of these traders had close ties to Milken. One of them, of course, was Steve Cohen, future founder of SAC Capital. Another was the Russian crime figure Evgeny Klotsman. And yet another, of course, was the Russian mobster Felix Sater, who, along with Klotsman, was, in 1996 linked to what the FBI described as a “global market manipulation and money laundering network controlled by Russian organized crime.” Other key figures in that “global market manipulation and money laundering network” were, of course, members of La Cosa Nostra, several of whom were involved, along with Felix, Klotsman and other Gruntal principals, in White Rock Partners.

There were just a few other traders who effectively ran Gruntal, and one of them was Andrew Redleaf, whose wealthy family did a lot of business with Milken’s operation at Drexel. Redleaf got his job at Gruntal on Milken’s recommendation. After leaving Gruntal, Redleaf invested in Sun Country Airlines in partnership with Tom Petters, who was arrested in 2008 and indicted for orchestrating a massive Ponzi scheme in cahoots with Michael Catain, the son of a famous Genovese Mafia enforcer named Jack Catain. Redleaf currently runs a large hedge fund called Whitebox Partners, another of the hedge funds that regularly trade in unison with SAC Capital and others in the network. (Neither Whitebox nor its principals has been charged with any crime).

Another one of the hedge funds in this network is the massive and eminently powerful Cerberus Capital, run by Stephen Feinberg and Ezra Merkin. In the early 1980s, Feinberg was one of Michael Milken’s top employees at Drexel Burnham. In the mid-1980s, Milken asked Feinberg to move to Gruntal & Company to help the others (namely, Russian mafia boss Felix Sater, Evgeny Klotsman, Gambino Mafia broker Maurice Gross, and Steve Cohen, among a few others) oversee Gruntal’s operations, which had become important to Milken’s nationwide network. But aside from the SEC’s investigation of Steve Cohen, regulators did not catch on to Gruntal’s criminality until the mid-1990s, when it was forced to pay the largest fines in SEC history after a series of scandals that saw some of its other managers charged with embezzlement and cooking the books. By then, the traders who really ran the place in the 1980s had moved on to much bigger projects, one of which, we know, was Feinberg’s Cerberus Capital.

In 2006, Mainichi Shimbun, Japan’s most respected business newspaper, reported that Cerberus was tied to the Japanese Yakuza. Feinberg said it wasn’t true and he sued the Japanese newspaper for libel, but there is no doubt that Mafia outfits worldwide are becoming more closely intertwined, and I think we would be justified in asking whether Feinberg came into contact with various Mafia outfits while working for Gruntal & Company (which was effectively controlled by a select number of traders, some of whom were mobsters). Feinberg’s partner in Cerberus, Ezra Merkin, meanwhile, has been charged with civil fraud for his role in the massive “Ponzi” scheme (in fact, it was not just a “Ponzi” scheme, but more on that later) perpetrated by the infamous Bernie Madoff. One of Merkin’s other funds, Ascot Partners, was the second biggest “feeder” to the Madoff criminal operation.

Other big “feeders” to Madoff’s operation were, according to court documents, “made” members of the Mafia. One of them was Ralph Mafrici, who had a joint account with Madoff’s investment fund in the name of Eleanor Cardile, a relative of Madoff’s right hand man, Frank DiPascali. Mafrici was a Genovese Mafia capo who allegedly ordered the assassination of another Mob boss named Albert Anastasia. Since Anastasia was getting his hair cut at the time, the assassination was famously dubbed “The Barber Shop Hit.” In fact, Madoff’s operation had extensive ties to organized crime, as we will see in later chapters, wherein we will also see that Madoff’s brokerage was a key component of the Milken network (and had, in the 1980s been a key component of the larger BCCI enterprise). First, though, let us meet some of the other characters in the “network” that will feature in our later discussion of the 2008 meltdown.

Another of the traders who, in the 1980s, effectively ran Gruntal & Company was Sam Israel, who later became the proprietor of a criminal hedge fund called Bayou. When Israel was indicted in 2008, Bayou was said to be the “biggest Ponzi scheme in history.” Before that, the biggest Ponzi schemes in history had been the Ponzi schemes run by the above-mentioned Fred Carr and Tom Petters. Unfortunately, in December of 2008, Sam Israel’s Ponzi was topped by Bernard Madoff, who turned himself in to the FBI and announced that his “Ponzi” scheme (which absconded with upwards of $65 billion) was bigger.

When it came time for Israel to show up for prison, Israel instead parked his car on a bridge and left a note in the window that said, “Suicide is Painless.” Then he ran away.

After that, Israel had second thoughts and decided to turn himself in. Meanwhile, it emerged that Israel had been in business with Robert Booth Nichols, whom the FBI had identified as a close associate of both the Gambino and Genovese Mafia family and perhaps the key U.S. contact for the Japanese Yakuza. Back in the 1980s, Nichols had been involved with BCCI, and he was tied to a big scandal surrounding a software program called Promis.

The developers of Promis alleged that the software was stolen from them by the U.S. government, which (according to the developers) modified it so that it included a back door feature that would allow the U.S. government to access information on computers that had installed the software. At the time, the media gave considerable credence to this story, and suggested that the U.S. government had sold Promis software to multiple foreign governments. What has not been widely reported is that Mafia-tied Robert Booth Nichols also managed to gain rights to sell Promis software, and Nichols handed those rights to the famous Saudi arms dealer and market manipulator Adnan Khashoggi, who had been a key figure in the larger BCCI enterprise.

As a document obtained by DeepCapture shows, Khashoggi, in turn, licensed the software to Sheikh Khalid bin Mahfouz, then the largest shareholder of BCCI and executive director of the bank. (Recall from earlier chapters of this series that Sheikh Mahfouz was, until his death in 2009, also one of Osama bin Laden’s most important business partners). Mahfouz proceeded to sell this software to major banks around the world, raising the question of whether he used its back-door feature to obtain confidential information from the computer systems of banks that used the software.

The bizarre nature of the business that Nichols and Israel later did together has been reported in an entertaining book called “Octopus: Sam Israel, the Secret Market, and Wall Street’s Wildest Con,” which suggests that Israel was conned by Nichols into believing that he, Israel, could recoup his hedge fund losses by tapping into a “secret market” that was, according to Nichols, controlled by 13 powerful families who also controlled the whole world. The book, of course, casts doubt on the notion that the 13 families actually control a secret market, much less the whole world, and the book reports further that Israel was scammed by Nichols into paying a large sum of money to get his hands on U.S. Treasury notes with a face value worth billions.

The Treasury notes were said to be linked to “Yamashita’s gold,” which was reputed to be gold that had ostensibly been stashed in the Philippines by the Japanese just prior to the end of World War II, and later recovered by a secret U.S. government operation. This, too, seems an unlikely proposition, but there might, in fact, be more to this story than a tale of a hapless hedge fund manager (Sam Israel) who lost millions to a clever con-man (Nichols). Which is not to say that 13 families actually control the world (though, of course, anything is possible), but as court documents obtained by DeepCapture show, Nichols and Israel had, in fact, obtained U.S. Treasury notes valued at $250 billion (as in a quarter-of-a-trillion dollars).

Israel and Nichols told people that their $250 billion in Treasury notes were secured by 2,500 metric tons of gold (serial number SC 3040-20) at the Atlanta Federal Reserve. In fact, physical gold in this quantity was not sitting with the Federal Reserve, but Nichols and Israel said the Atlanta Federal Reserve had issued a serial number in confidence that the gold would be forthcoming, much of it from the Philippines.

More specifically, Nichols and Israel told people that many of their $250 billion in Treasury bonds were secured by “Yamashita gold” that had been located years earlier by then Philippine dictator Ferdinand Marcos, who had moved the gold to a new hiding place in the jungles of Mindanao, an island at the south end of the Philippine archipelago. According to Nichols, Adnan Khashoggi (who was once indicted for laundering money on behalf of Imelda Marcos, then widow of the former dictator) had reported that this gold was now in the possession of the Abu Sayyaf terrorist group on Mindanao, and that his associates were traveling to the Philippines to retrieve the gold.

Nichols later changed the story and said that the $250 billion in U.S. Treasury bonds were related to long-standing U.S. government obligations to the offspring of Chinese nationalist leader Chiang Kai-shek. Specifically, Nichols said the obligations had been confirmed by Tansri Teong, a representative of the Maiwah family, descendents of Chiang Kai-shek who lived in Luxembourg. However, Nichols began telling the Chiang Kai-shek story after Israel was arrested, perhaps to distract investigators from the fact that their scheme revolved primarily around Khashoggi’s assurances concerning the Yamashita gold in the Philippines.

In either case, while Khashoggi had spoken of this gold in the past, many considered the story to be rather implausible. Of course, anything is possible, but it is equally possible that the $250 billion Treasury bonds were a fake. Nonetheless, according to journalist Cheryl Seymour (who first reported parts of this story, though not the information about the gold in the Philippines), bankers around the world were convinced that the Treasury notes were real. And, again, they had a face value of a quarter trillion dollars—which is around 60% of what the U.S. government pays each year in interest on the national debt. It’s also around 60% of the U.S. government’s annual defense expenditures. Moreover, Nichols and Israel circulated the story about this supposed massive obligation just as the U.S. financial system was beginning to weaken.

That is, just as the system was weakening in 2008, Israel and Nichols claimed that they were going to cash in notes that would (if it they were real) effectively bankrupt the U.S. government and fuel panic with regard to any major banks that had liens on Treasury notes. As one banker told Seymour, this “shook the financial foundation around the world.” Other bankers reiterated that statement: Sam Israel’s claim (whether true or false) to have $250 billion in Treasury bonds linked to a stash of gold in the Philippines actually rocked the global financial system (though, of course, there were other activities that did quite a lot more to rock the global financial system).

After Israel was arrested, he and Nichols filed lawsuits against each other. Soon after, in 2009, reports emerged that Nichols had been found dead in Switzerland. People close to Nichols insist that Nichols faked his own death, but the truth remains unknown. It is also unlikely that we will learn whether the U.S. Treasury notes were fake because soon after Nichols and Israel filed their lawsuits, the notes vanished. They had been briefly entered into the public record, but they are not there anymore. There is no doubt, though, that the notes (whether they were counterfeit or not) did exist. And some bankers apparently did take them seriously.

No doubt I will be ridiculed as a conspiracy theorist simply because I have told this true (albeit weird) story, but I have been accused of worse, and I will note that an almost precisely similar story (though with a different set of protagonists) was recently discussed on the floor of the British parliament.

* * * * * * * *

Before he got involved with the bizarre $250 billion Treasury note scheme, and after he left Gruntal & Company, Israel spent time working for one of Michael Steinhardt’s hedge funds. In that capacity, Israel helped Steinhardt corner the market for U.S. Treasuries, posing a threat to economic stability until the government threatened to press criminal charges, convincing Steinhardt to back off.

John Lattanzio, the manager of Steinhardt’s hedge fund, was extremely secretive. There wasn’t much information on him until a court case revealed that Lattanzio once proposed marriage to a Russian hooker and gave her a $289,275 diamond ring. Nothing wrong with that (marriage is a wonderful thing), but the interesting development in this case was that the lovers quarreled, Lattanzio wanted his ring back, and the prospective wife told the judge that Lattanzio had big-time Mafia connections. She also said that Lattanzio “would not hesitate to use [the Mafia] to harm me.” Which is not surprising because the man who launched Lattanzio’s career, Michael Steinhardt, also has big-time Mafia connections.

When it became evident that Steinhardt’s ties to the Mafia might become public, Steinhardt preemptively published a book in which he revealed (as if were no big deal) that his father, Sol “Red” Steinhardt, had done time in Sing-Sing prison because he was, in the words of a Manhattan district attorney, the “biggest Mafia fence in America.” In fact, as noted in earlier chapters of this series, Steinhardt’s father was effectively the chief financial officer for the Genovese Mafia family. In his book, Steinhardt admitted that the first and most important investors in his first hedge fund were: the Genovese Mafia family; Ivan Boesky (Milken’s most famous criminal co-conspirator); and Marc Rich (who then shared office space with Boesky).

In previous chapters of this series, I discussed Marc Rich’s ties to BCCI and the Iranian regime, noting that Steinhardt’s lobbying helped convince President Bill Clinton to pardon Rich from his indictment for illegal trading with Iran. Although Rich was pardoned, he still owes the U.S. government taxes, so he lives in Switzerland, where his palatial home is guarded by a private army of mercenaries.

Rich has done quite a lot of business with companies, such as Highland Capital, that were under the control of Russian organized crime boss Semion Mogilevich, and Rich was linked to the late 1990s scandal that saw Russian organized crime syndicates (most notably the Mogilevich organization) launder more than $10 billion through the Bank of New York. This was the same scandal that involved Sinex, which handled around $3.9 billion of that money, most of it belonging to the Mogilevich organization. Rich was not charged in the Bank of New York affair, and nor were any of the other oligarchs (many of them previously linked to the BCCI enterprise) who were implicated in the Bank of New York affair.

Of course, Steinhardt was also among Milken’s closest associates. Nowadays, Steinhardt runs a big exchange traded fund (ETF) outfit called Wisdom Tree Investments. His partner in that operation is Jonathan Steinberg, son of Saul Steinberg, who was a key player in the junk bond “bust out” scheme that Milken ran in the 1980s. Steinberg used Milken junk bonds to seize Reliance, a giant insurance and financial services firm, which was subsequently looted and destroyed (i.e. “busted out”). Steinberg was not charged with any crime.

As noted in Chapter 6 of this series, a Wall Street Journal story published in 1985 (read it, as it was the last serious investigative report on short-side market manipulation published before the media started describing these miscreants as heroes worthy of our admiration) identified Steinhardt as being part of a “network” of short sellers who regularly attacked public companies using unscrupulous tactics, such as posing as journalists to obtain inside information and conspiring to cut off victim companies’ access to credit.

Among the others identified as being part of that “network” was Jim Chanos, who is now the proprietor of a famous hedge fund called Kynikos Capital, and the head lobbyist for the hedge fund industry. Chanos is also a favorite source for the New York financial media, one reason why the media no longer publishes stories about short-side market manipulation (which does not occur, according to the lobby headed by Chanos). When DeepCapture first started reporting on Chanos’s ties to Michael Milken and associates, Chanos went to lengths to distance himself from Milken, telling journalists that he had identified the fraud at Milken-financed companies.

In an email to some of his associates (the email was obtained by lawyers for the Canadian financial institution called Fairfax Financial, and later obtained by DeepCapture), Chanos outlines the party line, suggesting to the recipients of the email (namely, a long list of Milken-tied hedge fund operators and billionaires, such as Carl Icahn, who owed their careers to Milken) that they communicate the fact that he, Chanos, had been a short seller of companies financed by a “certain junk bond king” (i.e. Milken). But while Chanos, Steinhardt, and others in their “network” were certainly short sellers of Milken-financed companies, their short selling was always beneficial to Milken, and was simply the tail-end of the “bust-out” schemes that I have described, noting that every “bust-out” ends in a wave of short selling.

Indeed, as was revealed in the 1985 Wall Street Journal story, Chanos got his big start by shorting a company called Baldwin United. According to this story, Chanos went so far as to go to Baldwin’s bankers with false information that convinced the bankers to cut off Baldwin’s access to credit. As a result, Baldwin went bankrupt, and Milken got himself named as the advisor to the bankruptcy. According to a well-known and highly respected businessman who was involved in the bankruptcy proceedings, Milken abused his advisory role and ensured that all of Baldwin’s assets were delivered to his cronies at firesale prices. This success brought Chanos to the attention of Michael Steinhardt.

At the time, Chanos (who is now revered by The Journal) was working for a Mafia-tied brokerage called Gilford Securities. In 2000, five Gilford brokers were arrested (along with Phillips) in Operation Uptick, which was, of course, then the biggest Mafia bust in the history of the FBI. Gilford’s brokers were charged with manipulating stocks in league with ten members of La Cosa Nostra and a corrupt New York cop. By then, though, Chanos had left Gilford to start his own hedge fund, receiving his initial finance from Steinhardt (son of the biggest Mafia fence in America) and Steinhardt’s limited partner, Ivan Boesky (Milken’s most famous co-conspirator). Steinhardt’s other limited partner, Marty Peretz, introduced Chanos to Dirk Ziff, another powerful hedge fund manager (Och-Ziff Capital and Ziff Brothers), and for a while Chanos ran his hedge fund out of Ziff’s offices.

While Chanos was launching his hedge fund, future CNBC reporter Jim Cramer (who had once planned to work in partnership with Boesky) was running a hedge fund out of Steinhardt’s offices. Later, Cramer and Chanos were the biggest fundraisers for the political campaign of New York Governor Elliot Spitzer, who had been Cramer’s college roommate. For a time, Spitzer’s favorite hooker, “Ashley Dupree” lived (rent free) at Jim Chanos’s beachside villa. She called him “Uncle Jim.” As Patrick Byrne once said, Ashley should be ashamed of herself for associating with this crowd.

SEC filings make it clear that Chanos regularly trades in league with other hedge funds in the Milken network, and in 2006 they were attacking Fairfax Financial, one of the largest financial institutions in Canada. Fairfax filed a lawsuit against others in his “network,” including SAC Capital, and some of its affiliates, such as Exis Capital and Sigma Capital. (A judge has ruled that SAC Capital should be dropped from the suit, but Sigma and Exis are still in litigation, and Fairfax has appealed the ruling).

Emails obtained by Fairfax’s lawyers make it clear that these hedge funds were using the same tactics (such as trying to cut off the company’s access to credit) that they had been using since the 1980s.In one email, an employee of Exis Capital (a SAC Capital subsidiary) wrote that “the way to get this thing [Fairfax] down is to get them where they eat, like the credit analysts and holders. We’re taking this baby down for the count.” This email was addressed to Jonathan Kalikow, son of Peter Kalikow, who had, in the 1980s, been one of largest investors in Ivan Boesky’s criminal arbitrage fund (or “hedge fund,” as it would now be called).

Kalikow is also a former owner of The New York Post. At the time, the newspapers’ fleet of delivery trucks was controlled by La Cosa Nostra. The operation was run by Bonanno Mafia soldier Richard “Shellack-head” Cantrella. Soon enough, the New York Post delivery fleet began transporting cargos of smuggled weaponry and cocaine, in addition to newspapers. (Kalikow was not charged with any crime, and it is possible he was unaware that his delivery trucks were controlled by the Mob).

At any rate, back in 2006, this network was going to take Fairfax “down for the count.” Fortunately, though, Fairfax was a strong company. Its bankers did not cut off access to credit, and it had the good luck to buy a lot of credit default swaps that massively boosted its profits.

However, two years later, Bear Stearns, Lehman Brothers, and other banks were taken “down for the count.” The public attack on Lehman began in May, 2008 with a speech by David Einhorn, a famous short seller who got his start working for Gary Siegler, one of the first people whom Carl Ichan hired after leaving Gruntal & Company. Einhorn is, for all intents and purposes, Ichan’s boy, and when he gave his Lehman speech, he was standing by Icahn’s side, just as he was standing by Ichan’s side when he initiated previous attacks on public companies.

In his speech and subsequent media tour, Einhorn cited data from a strange firm called The Markit Group to support his exaggerated contention that Lehman had improperly accounted for the value of its property and collateralized debt obligation holdings. See my earlier DeepCapture story, “The Markit Group: A Black Box Company that Devastated Markets,” which notes that this company was founded by a few hedge funds, which the company refuses to identify. It was, in 2008, run by two former Canadian bankers and a developer of Bulgarian property, and seemed to cherry-pick its data, which was provided by a few investment banks that are passive investors in the company.

The Markit Group is wholly without transparency, and yet it essentially dictates perceptions of market prices for collateralized debt obligations and other instruments (including credit default swaps) that are important barometers of health in the banking sector. And during the crisis of 2008, it consistently churned out wildly overstated valuations on credit default swaps, while valuing all collateralized debt obligations based on a sampling of CDOs that included only the worst of the worst (or more specifically, the “synthetic” CDOs that had been designed by short sellers to self-destruct).

The Markit Group’s wildly off-base statistics fueled the panic that helped bring down Bear Stearns, and it was a useful tool for Einhorn, when he initiated his attack on Lehman. That attack was akin to the launch of a new Ipod, with much-hyped speeches and a whirlwind media tour handled by a public relations firm, which presented Einhorn as the boy-wonder fraud-buster who had proved his mettle in an earlier battle with a financial services firm called Allied Capital. (See DeepCapture’s story, “Notes on David Einhorn: The Predator in a Cute T-Shirt,” for a fuller deconstruction of Einhorn’s blatantly dishonest attack on Allied Capital, which was perpetrated in league with Michael Milken and Carl Icahn).

While Einhorn was on his media tour, most of the other hedge funds in his network initiated a short selling attack on Lehman. After Lehman’s collapse, the bank’s creditors filed a lawsuit against the above-mentioned Steve Cohen and Dirk Ziff, alleging that the two hedge fund managers (along with Citadel Investment) helped destroy Lehman with manipulative short selling.

To be continued…Click here to read Chapter 7

Mark Mitchell is a journalist who spent most of his career working as a correspondent for mainstream media publications before joining DeepCapture.com. Mitchell is the author of a recently published book: The Dendreon Effect: How Felons, Con-men, and Wall Street Insiders Manipulate High-tech Stocks, which is available from most major online booksellers.

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The Global Bust-Out Series (Chapter 6): An Oligarchic-Organized Crime and Terrorism Syndicate (and Some Stock Promoters)

The Global Bust-Out Series (Chapter 6): An Oligarchic-Organized Crime and Terrorism Syndicate (and Some Stock Promoters)

This is Chapter 6 of a multi-chapter series. On your right is a Table of Contents to all chapters so far published.

* * * * * * * *

In this chapter of the Global Bust-Out Series, we learn still more about the Bank of Credit and Commerce and International (BCCI) and its business partners (the “larger BCCI enterprise”). Although this might seem like ancient history, it is history that we should not forget because the people who were involved with the BCCI enterprise did not simply disappear when BCCI collapsed in 1991. To the contrary, most of them remained in business. This despite the fact that Manhattan District Attorney Robert Morgenthau had described BCCI as “the largest banking fraud in world financial history.”

Recall, too, that the larger BCCI enterprise did more than operate “the largest banking fraud in world financial history.” It also deployed a variety of schemes to “bust-out” publicly listed companies, some of them among the largest savings and loan banks in the United States. This contributed to the savings and loan crisis that began in the late 1980s, and which ultimately cost American taxpayers upwards of $2 trillion in bail-outs—a portent of bigger and better things to come.

The larger BCCI enterprise also “busted out” (i.e. looted and destroyed) smaller public companies, and it “busted out” other national economies besides the one in the United States. When a few BCCI principals were brought to trial (they were sentenced to pay nothing more than fines that were a fraction of what they had looted), the sentencing judge correctly remarked that the BCCI enterprise had single-handedly “shattered the integrity of the global financial system.”  They had also shattered the integrity of Washington, where officials went to lengths to protect the larger BCCI enterprise from prosecution.

Because the BCCI enterprise was never seriously prosecuted (or exposed in the media), the people who had been involved with BCCI and the larger BCCI enterprise (some of them global terrorists) continued during the years that followed not only to remain in business, but also to operate an almost precisely similar enterprise, the only difference being that the enterprise came to include some new and younger players, while people involved with the enterprise innovated new and more destructive financial schemes. More specifically, they innovated new ways to “bust-out” publicly listed companies and national economies.

Indeed, as we will see, a number of them contributed to the great meltdown of 2008, and they are presently threatening to deliver a repeat performance.

It is no overstatement to say that miscreants (some of them operating big banks on Wall Street) who were formerly involved with BCCI and the larger BCCI enterprise presently pose the single biggest threat to the stability of the global financial system and our economic well-being. More than that, they pose a serious threat to the future of our democracy and to political stability in many other nations as well.  This is, in other words, the history that partly accounts for our present predicament, and it is the history that has (already to the great detriment of our democracy) been covered up by officials in Washington, and ignored by the major U.S. news organizations (many of them owned by people previously linked to the BCCI enterprise).

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During the 1980s, there existed a global network of brokerages linked to BCCI, and it is essential that we know more about these brokerages and their activities because some of their proprietors later established a similar global network of brokerages—and that network, we shall see, remains in business today.

The first fact to know about the brokerages linked to BCCI is that they looted many billions from the global financial system, and most of this looting was accomplished by the perpetration of so-called “pump and dump” schemes. See Chapter 1 of this series for a fuller description of “pump and dump” schemes, but I will repeat the essentials because these schemes have never been properly defined by the media, and rarely, if ever, has anyone been prosecuted for the most damaging component of these schemes. That is to say, American law enforcement officials sometimes prosecute the “pump” end of the schemes, charging miscreants for inflating (or “pumping”) stock prices, which is a relatively minor infraction, but law enforcement officials (and the media) routinely ignore the “dump” end of the schemes even though it is the “dump” that causes the most damage to the financial system.

In a typical “pump and dump” scheme, miscreants first gain a degree of control over a company and/or its stock, and then initially “pump” the shares, causing the stock price to soar in value. But as the name of the scheme suggests, the miscreants eventually  “dump” shares into the market, causing the stock price to decrease in value. And when the miscreants “dump” shares into the market, they always simultaneously attack the target stock with manipulative short selling that causes the stock price to go into a death spiral, thereby ensuring that the stock will hit zero before ordinary investors can realize what is happening and recoup some of their losses.

It is the manipulative short selling where the miscreants make much of their money, and obviously it is the manipulative short selling that wipes out ordinary investors and does the most damage to the markets, but it is this component of the scheme—the manipulative short selling—that is rarely prosecuted.

The manipulative short selling is rarely prosecuted partly because the targeted companies (especially in “pump and dump” schemes) are often fraudulent companies, and authorities apparently believe that the stock price of a fraudulent company ought, in any case, to be zero. But often, the targeted companies are legitimate, while others are not fraudulent until such time as miscreants gain a degree of control over them. And fraudulent or not, the result is always the same: the companies are “busted out” (i.e. destroyed), with the manipulative short selling triggering death spirals that ensure that ordinary investors have no chance whatsoever to exit the stock before it hits zero.

As Congressional investigators tasked to look into the BCCI scandal noted, the global network of BCCI-affiliated brokerages manipulated the U.S. markets and victimized countless investors in North America. However, the whitewashed report produced by the Congressional investigation into the BCCI scandal failed even to identify these brokerages by name, and failed also to identify the people who operated the brokerages. The major U.S. news organizations, meanwhile, reported almost nothing about these brokerages, and on the rare occasion when the brokerages were named, the media not only failed to note that the brokerages were affiliated with the BCCI enterprise, but also failed to report that the brokerages were involved in any criminal activity whatsoever.

The Wall Street Journal, for one, never mentioned any of these brokerages, but one of The Wall Street Journal’s award-winning journalists, Larry Gurwin, did publish a seminal book about the BCCI scandal, and this book (title: “False Profits”) contained much information that apparently could not appear in the newspaper that employed him. For example, Gurwin’s book noted that many of the BCCI-affiliated brokerages were operated by a man named Thomas Quinn, which was interesting because Quinn had been identified by the FBI (which never arrested him) as a major organized crime figure with ties to the Genovese Mafia family.

Quinn operated his brokerages—a global network of BCCI-linked brokerages with names like Equity Management Services, Kettler Investment, etc.—in partnership with other mobsters, including a man named Arnold Kimmes. The FBI identified Kimmes as a “major organized crime figure” in a classified report published in 1973, but the FBI did not arrest Kimmes in 1973, nor did the FBI  arrest Kimmes in any subsequent years, though Kimmes (being a “major organized crime figure”) committed  a lot of major organized crimes in league with BCCI and Quinn.

Quinn traveled often to the Middle East, where some of his brokerages were located, and spent part of every year in the United States, where he manipulated markets in league with a network of other brokerages with ties to organized crime. When he wasn’t traveling in the Middle East or the United States, Quinn was based in France, where he owned a pink villa overlooking the Mediterranean – a villa that he had named Farmhouse of the Roses, suggesting that major organized crime figures appreciate things that are cute and pretty.

In 1988, French police stormed Farmhouse of the Roses, kicking down doors, ransacking the place, hauling away evidence, and arresting Quinn, who was subsequently sentenced to four years in (French) prison on charges of securities fraud and market manipulation. When he was released, Quinn returned to the United States, where law enforcement officials and regulators never bothered him, though it was known that he was once again operating multiple criminal brokerages in this country. For example, Quinn co-founded an outfit called Sovereign Equity Management in partnership with an American criminal-oligarch named Phil Abramo, who was widely known as “The King of Wall Street.”

In addition to being known as “The King of Wall Street,” Abramo was a capo in the DeCalvacante Mafia family.

There were many other major organized crime figures involved with brokerages linked to the BCCI enterprise in the 1980s (and with similar brokerages in subsequent years). Among them were such Mafia luminaries as Canadian mob boss Vic Cotroni; and Antonio Commisso, a.k.a. L’avvocatu, or The Lawyer – the Toronto boss of the Ndrangheta Mafia organization, also known as the Siderno Group because it  has its origins in Siderno, Italy. Meanwhile, these mobsters and others–including Abramo, Quinn, and Kimmes–had extensive business with a famous Canadian stock promoter and organized crime figure named Irving Kott.

In 1979, a hit man named Cecil Kirby placed a bomb under Kott’s car. The bomb exploded, but Kott survived to co-found several brokerages in the global network linked to BCCI. For example, in 1983, Kott co-founded an outfit in Amsterdam called First Commerce Securities, which was the largest and most destructive of the BCCI-linked brokerages.

In 1984, Kott crossed paths with man named Ali Nazerali, who was then a senior employee of an outfit called the Gulf Group and also acted as a principal of a company called Ayla Holdings BV. This lead to Nazerali’s involvement with First Commerce Securities, which has been described as history’s largest-ever “boiler room” operation (“boiler room” being a common name for brokerages that “pump” stocks that are subsequently “dumped” to rip off investors). In 1986, a crack-down by Dutch authorities forced First Commerce to cease operations. The Dutch authorities requested a bankruptcy declaration against First Commerce in December 1996, which was granted in January 1987. Dutch authorities at one point estimated that First Commerce had scammed innocent investors of nearly $400 million (in 1986 dollars).

Nazerali later claimed in an affidavit filed in Canadian court proceedings that Ayla Holdings only had a “conditional” agreement to purchase First Commerce, but a number of sources allege that Nazerali was involved along with Kott in the operations of the brokerage during the period from 1984 to 1986. Neither Nazerali nor anyone else associated with First Commerce was charged with any crime related to operating First Commerce, although a First Commerce managing director was briefly arrested in November, 1986, and the Dutch authorities issued a warrant for Kott’s arrest in 1987. By this time, Kott had (in 1985) survived a second assassination attempt, and was traveling under a false name, reportedly because he feared for his life.

One of First Commerce’s top executives, meanwhile, had been a fellow named Joseph Gamal, who had transferred to First Commerce from BCCI headquarters in London, while another top executive of First Commerce had been a man named Simon Raouff, who had previously worked for Iraq’s foreign ministry, and who was, according to “False Profits” and others, involved with BCCI’s shipments of weapons to Iran and Iraq. Raouff also formerly worked for the Gulf Group, and Nazerali (the fellow who operated First Commerce from 1984 to 1986) was (as mentioned) formerly a top executive at the Gulf Group.

According to multiple sources, including “False Profits,” Nazerali was, like Raouff, also involved in the arms business, and it is likely that he began selling arms while working for the Gulf Group.

The Gulf Group was one of BCCI’s most important affiliates, involved in everything from container shipping to arms dealing and financial services. As Manhattan District Attorney Robert Morgenthau and many others later made clear, much of the cash that BCCI looted from the global financial system was delivered to the Gulf Group in the form of loans that were not expected to be paid back (and most of that money disappeared). The Gulf Group was controlled by a man named Abbas Gokal and his two brothers, Murtaza and Mustapha Gokal. The Gulf Group and the Gokal brothers themselves also had connections with First Commerce Securities and other brokerages linked to the BCCI enterprise.

Abbas Gokal subsequently became the only major BCCI figure to do jail time for his BCCI crimes, and after his release from jail, he moved to Tehran, where he and his brother, Mustapha, became financial advisors to the Iranian regime. Back in 1969, another Gokal brother, Hussein Gokal, was hanged by the Iraqi government, which had convicted him (albeit in the Iraqi courts, which had a low burden of proof) of being an Iranian spy. That was before the 1979 Islamic revolution, but after the revolution, the surviving Gokal brothers and the Gulf Group had (like their affiliate, BCCI) extensive and close working relationships with the Iranian regime.

The Gulf Group, like BCCI itself, also worked closely with the Pakistani intelligence service, the ISI, and Abbas Gokal, who was one of Pakistan’s most prominent oligarchs, served (as did many of Pakistan’s oligarchs) as an asset of Pakistan’s intelligence service. Among other ventures, the Gulf Group helped the Pakistani intelligence service deliver weapons to the mujahedeen in Afghanistan, and the Gulf Group was linked to the nuclear weapons proliferation network operated by Pakistan’s intelligence service and Pakistani nuclear scientist A.Q. Khan, known as “The Father of the Islamic Bomb.”

One of the beneficiaries of that nuclear proliferation network was the regime in Iran, and the Gulf Group’s dealings with the Iranian regime were so extensive that the mullahs who ruled Iran considered the Gulf Group to be not just one of their most important business partners, but a key ally in furthering the Islamic revolution. The Iranians relied on the Gulf Group for financial and policy advice, and also for a steady supply of sophisticated weaponry. Rachel Ehrenfeld (now director of the Economic Warfare Institute) has written that the Gulf Group “was the major player in delivering strategic and nuclear weapons [components] from the West to Iran and other Muslim countries.”  Congressional investigators reached similar conclusions.

Abbas Gokal, the man who controlled the Gulf Group, was also an intermediary for American oligarchs looking to do business with BCCI and the Iranian regime. Among these American oligarchs was a financial operator named Ivan Boesky, who would later become best known as Michael Milken’s most important criminal coconspirator.

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During the 1980s, Boesky ran what was then one of the nation’s most powerful arbitrage funds (today it would be called a hedge fund), and he had a reputation on the Street as a mysterious character who liked to operate in the shadows – a guy known to deliver suitcases full of cash to gorillas with handguns holstered on their hips. According to Pulitzer Prize winning author James Stewart (see his book, “Den of Thieves”), Boesky often told people that he had spent an earlier period in Iran working as a CIA agent.

Prosecutors would later describe in colorful detail the armed gorillas and suitcases full of cash, but Boesky’s claims to have been working as a CIA agent in Iran were somewhat dubious. It is more than likely, as one of Boesky’s former business colleagues confirmed in an interview with DeepCapture, that Boesky had (and still does have) deep ties not to the CIA, but to the regime in Iran (though, of course, it is possible that he had ties to both).

In any event, it is certain that Boesky spent time in Iran. He was, for example, in Iran soon after the 1979 Islamic revolution that brought the current Iranian regime to power, and when he returned from that trip Boesky went into business with a trader and oligarch named Marc Rich, who, like Boesky, was transacting large volumes of trading with the Iranian regime. The intermediary for Rich’s trading with Iran was, of course, Abbas Gokal, and Rich relied on BCCI for much of his finance. Indeed, Congressional investigators would later identify Rich as being a key figure in the larger BCCI enterprise.

Throughout the 1980s, Rich and Boesky shared New York office space in a building (at 650 Fifth Avenue) that was owned by an outfit called the Assa Corporation, which was controlled by the Iranian regime. Much later, in 2009, the Department of Justice indicted the Assa Corporation, alleging that it was a front for Iranian espionage in the United States, and that it was funding Iran’s nuclear weapons program. The DOJ also presented evidence that the Assa Corporation had ties to organized crime, and it is likely that the Assa Corporation’s had been conducting business with organized crime since the 1980s. As we will see, Rich and Boesky also had extensive ties to organized crime and they continue to this day to do business with the Assa Corporation (which has dealings with numerous brokerages in the United States, its indictment for espionage and funding Iran’s nuclear program notwithstanding).

In 1983, Rich was indicted for illegally trading with the Iranian regime during the 1979-1980 Iran hostage crisis, which saw U.S. soldiers die in an unsuccessful attempt to rescue American diplomats who were being held hostage at the U.S. embassy in Tehran. After he was convicted, Rich fled to Switzerland and lived as a fugitive from the law, but U.S. President Bill Clinton, on his last day in office, granted Rich a pardon from his crimes, and by this time Rich was, perhaps, the world’s most powerful commodities trader, in addition to being a big player in other markets.

President Clinton’s decision to pardon Rich from his crimes was influenced by a hedge fund manager and oligarch named Michael Steinhardt, who had persistently lobbied Clinton on Rich’s behalf, and who was one of the largest funders of the Democratic Party. In addition, Steinhardt had co-founded an outfit called the New America Foundation, which played a key role in securing the presidency for Clinton, and was later credited with having authored much of the Clinton administration’s policy platform.

As Steinhardt has himself admitted (possibly because he worried that the information was going to become public anyway, and because he wished to deliver the news as if it were no big deal) the largest investors in his first hedge fund were the Genovese Mafia family. This was because Steinhardt’s father, Sol “Red” Steinhardt, was (in the words of a Manhattan district attorney) the “biggest Mafia fence in America.” More specifically, Steinhardt Sr. was the chief money manager for the Genovese and affiliated Mafia families.

According to Steinhardt, the second biggest investors in his hedge fund (after the Genovese Mafia) were Marc Rich and his office mate, Ivan Boesky. Steinhardt, meanwhile, had become one of the more prominent (and some say “notorious”) hedge fund managers on Wall Street. In 1991, Steinhardt was implicated in a scheme to corner the U.S. Treasuries market—a scheme that would have had disastrous consequences for the U.S.A. if had been successful. Two years earlier, in 1989, The Wall Street Journal described Steinhardt as being part of a “network” of financial operators who deployed manipulative short selling to attack publicly listed American companies. Indeed, though The Wall Street Journal did not report this, the same “network” had conspired with BCCI to “bust-out” (i.e. destroy) some of America’s largest financial institutions.

In addition, this “network” remains in business today, so there is more that we need to know about the “network,” beginning with the information that the “network” includes Ivan Boesky and Marc Rich, not to mention former BCCI figures like Abbas Gokal and some of the world’s leading organized crime bosses. Meanwhile, of course, a central figure in the “network” is Boesky’s most famous criminal coconspirator, Michael Milken, who was (in the 1980s) the most powerful man on Wall Street, and who remains to this day one of the most destructive financial operators in the nation.

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Although Milken spent two years in prison, and is, without doubt, one of history’s most destructive financial criminals, the major U.S. news organizations presently describe Milken as being not only a Wall Street hero, but also one of the most “prominent” fixtures of the American establishment. Even the usually reliable Economist magazine published an article in September 2010 that hailed Milken as an “innovator” whose junk bond finance in the 1980s helped build some of America’s greatest companies.

It is true that Milken’s finance contributed to the growth of a few major companies. For example, Milken financed Rupert Murdoch’s News Corp. In addition, Milken finance helped Ted Turner build CNN into a media powerhouse. And it is perhaps no coincidence that CNN was, meanwhile, doing business with BCCI subsidiary Capcom Financial, which, during the 1980s, transacted $90 billion (a mighty sum in those days) in “wash” trades through Milken’s trading desk at Drexel Burnham Lambert.

As noted in earlier chapters, “wash” trades are usually accompanied by manipulative  short selling, and they cause extensive damage to the markets. In addition, “wash trades” usually involve money laundering (hence the term “wash”), so it is probably notable that Capcom Financial and its director, Ziauddin Ali Akbar, who also served as BCCI’s treasurer, were, in the 1980s, indicted for laundering money on behalf of Colombian drug cartels. And of course, the larger BCCI enterprise was laundering money for terrorist outfits and the world’s leading organized crime syndicates. (Congressional investigators determined that Capcom principals, one of whom was the chief of Saudi intelligence, might also have influenced CNN’s coverage of the Middle East and of BCCI itself).

In any event, while  Milken did finance a few successful companies, Milken and a close-knit cabal of criminal-oligarchs destroyed (i.e. “busted out”) far more companies than they built, and, often, they did so in league with the BCCI enterprise.

It would require another book-length blog to discuss all of the companies that the Milken cabal destroyed in the 1980s, and the subject has already been covered to some extent by other books, so I will leave it to the reader to consult, for example, Connie Bruck’s highly acclaimed book, “The Predators’ Ball,” which describes Milken’s  larger scheme in general terms. Perhaps the best book on the Milken cabal is Ben Stein’s “License to Steal,” in which Stein posited that the principal business model of Milken & Co. was to “bust out” (a term that Stein also used, which is to say I didn’t make it up) publicly listed companies, including many of the nation’s leading savings and loan banks. (Stein later became a columnist for The New York Times, which never publishes anything negative about Milken nor any other oligarch).

Although the major U.S. news organizations devoted little attention to the “bust-outs” of savings and loan banks, the “bust-outs” were noticed by others, including the Federal Deposit Insurance Corp. (FDIC) and the Federal Savings and Loan Insurance Corporation (FSLIC), whose deputy director at the time was the crusading William Black, a rare example of an honest man in government who later (as a professor of economics) developed the concept of “control fraud,” in which financial executives (e.g. Michael Milken and his associates) deliberately use entities that they control as a “weapon” to commit fraud that undermines markets and the broader economy. Back in the 1980s, as the FDI noted, Milken and his closest associates “willfully, deliberately, and systematically plundered certain S&Ls.”

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The Milken variation of the “bust out” worked as follows: Milken issued junk bonds to finance about two dozen of his closest associates, who used the finance to take over good companies. Under the direction of Milken’s cronies, the companies took on ever greater amounts of Milken’s junk bond debt. But rather than use the finance to grow the companies, the Milken cronies simply looted the companies of their cash. To create the illusion that there was a liquid market for the junk bonds, the Milken cronies meanwhile traded their bonds amongst each other at stair-stepping prices.

As the government’s indictments of Milken made clear, this junk bond merry-go-round was conducted with Mafia-like secrecy – nobody other than Milken’s closest associates knew that the only buyers for the junk bonds were Milken’s other closest associates. Meanwhile, Milken was involved with a nationwide network of brokerages and investment funds (many featured in later chapters of this series, and many still in business today) that traded on inside information about these companies and manipulated their stock prices. When the Milken’s junk bond cronies were done looting their companies, Milken and his cronies, along with others in their network, would attack the companies with manipulative short selling, thereby triggering a death spiral in their stock prices and ensuring that the companies could not be saved.

One of the short sellers who regularly attacked companies that were “busted out” by Milken and his associates was, of course, Michael Steinhardt (the guy with the hedge fund whose biggest investors were Marc Rich, the Genovese Mafia, and Milken’s criminal co-conspirator Ivan Boesky). Others were among the short sellers who were part of the short selling “network” exposed by the 1989 Wall Street Journal story that identified Steinhardt as being a key figure in the network. Later chapters of this series will discuss the network in greater detail, but for now it is enough to know that the 1989 Wall Street Journal story reported that others in the network, including a fellow named Jim Chanos, were employed at the time by a brokerage called Gilford Securities.

By 2000, Chanos had left Gilford Securities and (with funding from Steinhardt, son of the biggest Mafia fence in America) started his own hedge fund, Kynikos Investments, one of the most powerful hedge funds in the nation. Chanos also headed up (and still does head up) a hedge fund lobbying organization and, by 2000, he had become a  favorite source of information for journalists at major U.S. news organizations, including The Wall Street Journal, which never again published a story exposing manipulative short selling. Meanwhile, in 2000, five former brokers at Gilford Securities were indicted as part of Operation Uptick, billed by the FBI as the largest Mafia bust in history. The FBI reported at the time that the Gilford brokers had manipulated stocks in league with a “network” that included ten of La Cosa Nostra’s leading lights and a corrupt New York cop.

When I called Chanos’ former boss, H. Robert Holmes, to ask about Operation Uptick and the Mafia’s infiltration of his brokerage, he said: “This is bullshit.” Indeed, almost none of the 120 people arrested in Operation Uptick (ostensibly the biggest Mafia bust in history) were ever sentenced to anything worse than small fines, and most of them remained in business, so maybe Holmes was right: it was bullshit.

Back in the 1980s, when Gilford and Chanos were part of Milken’s nationwide network, their manipulative short selling targeted numerous companies that had been financed with Milken’s junk bonds. Chanos presently tells reporters that he was Milken’s nemesis and that his short selling of Milken-financed companies was evidence that he had a keen nose for fraudulent companies, but this is pure spin. Milken financed those companies fully intending that they would be “busted out” (i.e. destroyed) with help from manipulative short selling perpetrated by others, including Chanos and Steinhardt, in his network. And the short selling attacks, of course, triggered the essential death spirals in the stock prices of the target companies so that even if the companies’ boards of directors were to remove the Milken cronies, the companies would be unable to raise finance from more reputable sources.

When the companies went bankrupt, Milken and his cronies, including the short sellers, would make a fortune. Other Milken cronies would make still more money by purchasing the companies’ assets at fire-sale prices in the bankruptcy proceedings. And then they would repeat the process all over again, assured that the junk bond merry-go-round would supply a constant stream of lootable finance.

But, of course, this scheme eventually collapsed – and it must be stressed, the vast majority of the companies that Milken financed ultimately were destroyed.

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As already indicated, many of the companies that were destroyed by Milken & Co. were savings and loan banks, and in the case of the savings and loan banks, there was another important component of the scheme that involved a small number of people who specialized in so-called “brokered deposits.” Indeed, “brokered deposits” were one of the more important contributors to the savings and loan crisis, and they have been similarly cited as a contributing factor (other factors being manipulative short selling and “control fraud”) in our more recent financial crisis.

The full story of brokered deposits is a long one, but the short version is that a brokered deposit is, as the term implies, a bank deposit that is acquired through a broker.

More specifically, the broker aggregates deposits from many sources, and is paid by a given bank to deliver his bundle of deposits to the bank in question. The hitch is that these brokered deposits, unlike, say, checking and savings accounts, are generally not a stable source of funding, and technically, undercapitalized banks are not allowed to accept them. However, in the 1980s, there were loopholes (and there remained loopholes in all the years that followed) that enabled some well-connected brokers to deliver huge bundles of deposits to the most dubious banks, and in the process those banks would take on costly liabilities. In the case of the savings and loans that were part of the Milken junk bond merry-go-round, the deposits were simply looted.

In the 1980s, the single most important deposit broker—and a central character in most accounts of the savings and loan crisis (see, especially, the book “Inside Job.”)—was an organized crime figure named Mario Renda. And Renda’s most important business partner was Adnan Khashoggi, who, of course, was a key figure in the larger BCCI enterprise. Khashoggi was also closely involved with the global network of brokerages linked to the BCCI enterprise, and he (along with others already mentioned) will prove extremely important to our later discussion of the financial crisis that began in 2007, and which continues to this day.

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It is not an understatement to say that the savings and loan crisis would not have happened if it were not for the work of Renda and his sponsor Khashoggi, who, along with Milken, was one of the masterminds of the scheme to “willfully, deliberately, and systematically plunder” not just a few banks, but more than a hundred savings and loan banks across the nation, some of them among the nation’s most important financial institutions. Also central to this scheme was an outfit called CenTrust, which was based in Miami, and was the largest savings and loan bank in the southeastern United States. As Congressional investigators would later reveal, CenTrust was controlled by BCCI, and financed by Milken.

CenTrust was also a key component of Milken’s junk bond merry-go-round—i.e. the merry-go-round that allowed a host of Milken-financed savings and loan banks, including CenTrust, to appear healthy, even though they were taking on ever greater liabilities in the form of brokered deposits, and even though they were being “systematically” plundered (i.e. “busted out”). Ultimately, of course, CenTrust was one bank that was “busted out,” and its inevitable collapse alone cost U.S. taxpayers more than $2 billion.

Another key participant in the Milken junk bond merry-go-round and the larger scheme to “bust-out” major savings and loan banks was a monumental criminal and prominent American oligarch named Charles Keating. With Milken’s finance, Keating seized control of an outfit called Lincoln Savings and Loan, which was then the largest savings and loan bank—and one of the most important financial institutions—in the nation. Ultimately, of course, Milken and Keating, along with others in their network, “systematically plundered” (i.e. “busted out”) Lincoln Savings and Loan, and they did so in cahoots with the BCCI enterprise.

A later Congressional investigation would reveal that one BCCI figure involved in the “bust-out” of Lincoln Savings and Loan was a shadowy Swiss financial operator named Alfred Hartman, who was a member of BCCI’s board of directors and the head of BCCI Swiss subsidiary, Banque de Commerce et de Placements, based in Geneva.  Also involved in the “bust-out” of Lincoln Savings and Loan, according to Congressional investigators, was Abbas Gokal, head of the Gulf Group. As we know, the Gulf Group was one of BCCI’s most important affiliates, closely tied to the Iranian regime and Pakistani intelligence.

When the Senate Foreign Relations Committee began investigating BCCI for its role in Pakistan’s nuclear weapons program, the Committee announced that it intended to take a close look at Keating’s relationship with Gokal and the Gulf Group. It is not clear what, if anything, came of that investigation, but we would be justified in asking whether any serious investigation occurred at all given that Keating had successfully corrupted (or “captured”) at least five senators. Those captured senators would later become known, famously, or notoriously, as “The Keating Five,” at which point it was widely reported that the senators had, for many years, been intervening on Keating’s behalf, helping to derail law enforcement investigations into the goings-on at Lincoln Savings and Loan.

The same senators—and other senators besides—had given speeches on the Senate floor singing the praises of BCCI and ridiculing those who suggested that BCCI was a criminal enterprise. Presently, U.S. senators continue to sing the praises of billionaires who were formerly involved with the BCCI enterprise, and many of those billionaires continue to be given VIP treatment by other top officials in Washington.

Therefore, it is necessary for us to learn more about the billionaires who were formerly involved with the BCCI enterprise, beginning with the observation that all of these billionaires are, like Milken, also treated with reverence by the major U.S. news organizations, including The New York Times. And it is to one recent (and typical) New York Times article that we now turn, if only because it gives further credence to my contention that The New York Times is less reliable than People magazine, while the New York Times slogan—“All the News That’s Fit to Print”—is false and eminently fraudulent advertising that should be reported to the Better Business Bureau.

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In 2009, The New York Times published an obituary marking the death that year of Sheikh Khalid bin Mahfouz, the Saudi billionaire and Muslim Brotherhood oligarch who had, in the 1980s, been the largest shareholder of BCCI, and who had served as executive director of the bank. Sheikh Mahfouz was also one of history’s most destructive financial criminals, and when he and other BCCI principals were tried for their BCCI crimes, the presiding judge (who sentenced them to pay fines that were fraction of what they looted) named Sheikh Mahfouz as one among the people who had “shattered the integrity of the global financial system.” Aside from that, Sheikh Mahfouz was the most prominent banker in Saudi Arabia.

Not only was Sheikh Mahfouz the principal banker to the Saudi royal family, but he had also been the principal financier of numerous other Saudi oligarchs, including Adnan Khashoggi, who had been involved with the BCCI enterprise during the 1980s. In addition, Sheikh Mahfouz had been the proprietor of numerous other financial institutions, all of which had been affiliates of BCCI during the 1980s, and most of which remain in operation today. For example, Sheikh Mahfouz founded an outfit called National Commercial Bank, which is presently one of the largest and most powerful financial institutions on the planet, with extensive operations in the United States, and partnerships with some of Wall Street’s leading brokerages and investment houses.

If all that were not enough, Sheikh Mahfouz was also the most important business partner of a Saudi oligarch and terrorist named Osama bin Laden.

For these and other reasons to be discussed, Sheikh Mahfouz was, in fact, one of the most important people in the world. That alone is enough to cast doubt on The New York Times slogan—“All the News That’s Fit to Print”—for The New York Times rarely printed anything at all about Sheikh Mahfouz until his death in 2009, at which point The Times published an obituary for Sheikh Mahfouz that is worthy of our attention not because it was exceptional, but because it was entirely typical of the reporting by America’s most important newspaper, and this typical story was so ingratiating to power and so grossly propagandistic that it might not be an exaggeration to suggest that The New York Times itself poses a greater threat to the republic than do any of the terrorists who purportedly hate our freedoms.

For starters, The New York Times did not describe Sheikh Mahfouz as one of history’s most destructive financial criminals, and nor did the Times note that Sheikh Mahfouz and his BCCI associates had “single handedly shattered the integrity of the global financial system.” The Times did report that Sheikh Mahfouz had paid some money to settle fraud charges related to his involvement with BCCI, but the always “balanced” New York Times noted (and gave credence to) Sheikh Mahfouz’s claim that the payment (around $250 million, but the Times didn’t say how much) to settle fraud charges was just a “business decision,” and that he had not technically paid a “fine” because he denied all wrong-doing.

As for the nature of the BCCI enterprise, The New York Times reported only that BCCI had been shut down in 1991 after being accused of “financial chicanery and money laundering.” That was it. Just “chicanery,” as if it were nothing more than a slap-stick funny sort of mischief. Recall that this was a bank that helped “bust out” the American economy, meanwhile running a global network of criminal brokerages in partnership with transnational organized crime syndicates and providing a full package of services to the world’s leading terrorist outfits, with some terrorists themselves counted among the key figures in the larger BCCI enterprise. This is the same BCCI enterprise that thoroughly corrupted Washington and captured leading U.S. news organizations.

This was a bank (see “The Outlaw Bank,” by Johnathon Beaty, who was chief investigative reporter for Time Magazine until he reported the truth about this bank) that operated its own “Black Network” involved in everything from terrorism and coups de’ tat to weapons smuggling, narco-trafficking, nuclear weapons proliferation, prostitution, political assassinations, kidnappings, and murder for hire.

The New York Times has never reported any of that, and in its obituary for Sheikh Mahfouz (which was also the last time the Times mentioned BCCI), the Times literally had nothing more to say about BCCI other than those few words:  “financial chicanery and money laundering” (i.e. standard banking procedures), tempered with the assurance of Sheikh Mahfouz that neither he nor BCCI had committed any wrongdoing. Aside from that, this story in the Times demonstrated nothing short of admiration for Sheikh Mahfouz, noting that “Sheikh Mahfouz typified Saudi Arabia’s super-wealthy.” The Times gushed further that Sheikh Mahfouz “maintained opulent homes around the world and traveled in his own Boeing 767 with gold-plated bathroom fixtures.”

The Times also reported (approvingly) that Sheikh Mahfouz had, in 1977, joined a “Washington insider” named John Connally and unnamed “others” to buy an outfit called Main Bank of Houston. In addition, the Times reported that Connally introduced Sheikh Mahfouz to some Texas billionaires, namely the brothers William Herbert Hunt and Nelson Bunker Hunt, and the Times reported that these billionaires and Sheikh Mahfouz proceeded to collaborate in an effort to corner the silver market.

However, the Times did not seem to think there was anything wrong with American oligarchs and a Saudi sheikh trying to corner the silver market. In addition, the Times reported that the attempt was “unsuccessful” because Sheikh Mahfouz had (according to the Sheikh Mahfouz) “lost money” in the effort. Moreover, readers of this story in the Times were left to believe that this was the full extent of Sheikh Mahfouz’s business in the United States: the purchase, with a “Washington insider,” of Main Bank, and an “unsuccessful” attempt to corner the silver market.

But there was more to this story—news that the Times didn’t see “Fit to Print.”

For example, the Times did not report that Sheikh Mahfouz was (in the 1980s) a key player in a network of financial operators who were systematically plundering not just Main Bank, but also more than 100 other savings and loan banks. In addition, the Times failed to report that the “attempt” to corner the silver market was more than an attempt, and was, in fact, entirely successful in that Sheikh Mahfouz and his partners (for a time) fully controlled the price of silver. From the perspective of a Muslim Brotherhood oligarch like Sheikh Mahfouz (see earlier chapters of this series for more on what Muslim Brotherhood leaders call “The Financial Jihad”) the cornering of the silver market was all the more successful in that it wrought havoc in the broader markets, and nearly caused the collapse of  Bache & Co., which was then one of America’s largest investment banks.

As for that “Washington insider,” John Connally, the Times seemed to believe that it was par for the course and even commendable for Sheikh Mahfouz (who was then perpetrating the “biggest banking fraud in world financial history” in partnership with the chief of Saudi intelligence and other BCCI figures) to seek favor with a “Washington insider,” and the Times failed to report that this particular insider, Connally, had recently served as Secretary of Treasury, in which capacity he had convinced President Nixon to devalue the dollar and abandon the gold standard (which helped Sheikh Mahfouz corner the silver market).  Moreover, at the time when he went into business with Sheikh Mahfouz, Connally had announced his intention to run for president of the United States, though the Times didn’t mention that.

The Times also failed to report that Sheikh Mahfouz went into business with many other “Washington insiders” besides Connally. For example, Sheikh Mahfouz and BCCI purchased National Georgia Bank, the principal financiers of then President Jimmy Carter’s family peanut business, and Sheikh Mahfouz had extensive business with future President George Bush, Jr.  Indeed, Sheikh Mahfouz and other key figures in the BCCI enterprise effectively owned Washington, and they still owned Washington at the time of Sheikh Mahfouz’s death in 2009, but this was neither newsworthy nor problematic so far as The New York Times was concerned.

In addition, the Times failed to report that Main Bank, the outfit that Sheikh Mahfouz acquired with a Washington insider, was a key component of a larger scheme—namely, a scheme to “bust out” the U.S.A. and the global economy—that Sheikh Mahfouz and BCCI were perpetrating in league with other “Washington insiders” and American oligarchs, among them, of course, Michael Milken, who was, at the time, the most powerful man on Wall Street and one of history’s most destructive financial criminals (worthy of our respect and admiration,, according to The New York Times).

One of the few journalists who has reported extensively on the savings and loan scam is Pete Brewton, formerly of various of newspapers in Texas, and indeed Brewton (who has been scorned by others in the mainstream media for failing to toe the party line) is one of the world’s reigning experts on the savings and loan scandal. In addition, Brewton (see his book on the Mafia and savings and loans) has reported that Main Bank (owned by Sheikh Mahfouz and Washington insiders)  was part of a network of affiliated savings and loan banks that raised (with help from Khashoggi’s organized crime partner Mario Renda) a steady stream of brokered deposits, with the banks lending the cash back and forth to each other.

This daisy chain of lending served a purpose similar to Milken’s junk bond merry-go-round, temporarily creating the appearance that the banks were functioning and liquid financial institutions, but, of course, the goal of the people in the network was ultimately to “bust-out” (i.e. loot and destroy) all of the savings and loan banks in the network, including Main Bank. It might also be noted (though it is not “News That’s Fit to Print”) that Sheikh Mahfouz and other BCCI figures controlled or partially controlled numerous other banks in the network, among them an outfit called MBank and its parent, MCorp.

The two biggest clients of MBank (i.e. two people who helped loot the bank, as they were not expected to repay their loans) were major organized crime figure Herman Beebe and Carlos Marcello, who was then the top Mafia boss in the city of New Orleans (and the chief of La Cosa Nostra operations throughout Texas and other southern states). Another outfit in the network was Mainland Bank, which was “busted out” with help from Adnan Khashoggi, who, of course, was financed by Sheikh Mahfouz. Mainland’s top client, meanwhile, was Leonard Capaldi, whom the DOJ would later identify as a major organized crime figure and close associate of Detroit Mafia capo Tony Tocco.

* * * * * * * * *

Yet another bank in the network was San Jacinto Savings and Loan, which was a subsidiary of an outfit called Southmark Corporation, operated by Gene Phillips, the single most important business partner of Michael Milken, and a central player in the Milken-BCCI scheme to “bust out” the national economy.

Southmark was the largest recipient of Milken junk bonds in the 1980s, and it was the lynchpin of the junk bond merry-go-round. Its subsidiary, San Jacinto, was one of the largest savings and loan banks in the nation, and, of course, it was “busted out” (i.e. looted and destroyed) with much of the loot going to a familiar cast of coconspirators, including Adnan Khashoggi; Sheikh Mahfouz; New Orleans Mafia boss Carlos Marcello; and the notorious mobster-oligarch Herman Beebe, who was linked to the “bust-outs” of no less than two dozen other saving and loan banks across the nation.

The man whom Gene Phillips appointed as the chief loan officer of San Jacinto Saving and Loan was named Joseph Grosz. Aside from being a banker, Grosz was a leading mobster, affiliated with the Chicago Syndicate. As Brewton reported, San Jacinto’s parent, Southmark, was  “used as a mob dumping ground to buy the investments of mobsters,” including not only Herman Beebe and Carlos Marcello, but also organized crime figure Harry Wood, and Morris Shenker, a former lieutenant of Meyer Lansky, who was the most powerful mobster in the nation until he was replaced by Alvin Malnik. Meanwhile, in the 1980s, Malnik (the nation’s most powerful mobster) managed investments in the United States for Saudi princes involved with the BCCI enterprise (as was reported by People magazine, but not by The New York Times).

The “bust out” of San Jacinto cost American taxpayers another two billion in bailouts, and a Department of Justice investigation determined that San Jacinto and its parent, Southmark, were key components of the nationwide network that coordinated the “bust outs” of many other savings and loan banks—namely the network that is the subject of this story, and which precipitated the savings and loan crisis that ultimately cost more than $2 trillion in taxpayer-funded bailouts. However, Lloyd Monroe, the man who led the DOJ investigation into Southmark and San Jacinto, was forced to resign from his job after complaining that top officials at the DOJ had thwarted his investigation, and neither Phillips nor any other Southmark executive was charged for their role in the savings and loan scandal.

Presently, Phillips is still the most important business partner of Michael Milken, and most major U.S. news organizations seem to regard Phillips in the same way they regard Milken—i.e. as something of a Wall Street hero and a “prominent” fixture of the American establishment. The only exceptions are a few journalists (including Brewton) who have covered Phillips closely, and who managed to report on his activities in prominent publications in Texas, where Phillips is based. For example, the Dallas Business Journal reported in 2000 that Phillips “allegedly met with two associates of New York’s legendary Bonanno organized crime family to discuss a plan to bilk a couple of ‘very friendly’ union pension funds through the sale of inflated stock.”

That same year, 2000, Phillips was arrested and charged with manipulating stock prices in league with other leading figures in La Cosa Nostra. More specifically, Phillips was arrested as part of Operation Uptick, which, of course, was described by FBI spokesmen as the largest Mafia bust in U.S. history. More than 120 people (including, recall, those five brokers who had worked for Gilford Securities), all with ties to organized crime, were arrested in Operation Uptick, and FBI officials described them as being part of a nationwide “network” of stock manipulators, some of whom had committed various other crimes, which included (according to an FBI statement):  “controlling and infiltrating broker-dealers…and employing tactics of violence, including threats, extortion, physical intimidation, and the solicitation of murder…”

Some of the 120 people arrested in Operation Uptick were members of Russian organized crime syndicates, while others were, variously, described by the FBI as having ties to each of La Cosa Nostra’s five major Mafia families—Genovese, Colombo, Gambino, Bonanno, and Lucchese.  Among the 120 defendants, aside from Phillips (and aside from the five former Gilford brokers), were:  Robert “Little Robert” Lino, a capo in the Bonanno crime family; Anthony Stropoli, a soldier in the Colombo crime family; Frank “Frankie” Persico, a Colombo Mafia capo; Sebastian “Sebbie” Rametta, an associate of the Colombo crime family; Robert Gallo, an associate of the Genovese crime family; and John Black, an associate of the Lucchese crime family.

The DOJ charged that Phillips, in league with various members of La Cosa Nostra, had manipulated the stock of one of his companies, an outfit called Transcontinental. Aside from Phillips, the largest shareholder in that company was Michael Milken, who, of course, was Phillips’ most important business partner, known to readers of The New York Times only as a “prominent” fixture of the American establishment who was (at this time in 2000, according to the Times) focused principally on “philanthropic” activities. (See my book “The Dendreon Effect” if you wish to learn how Milken uses his “philanthropy” to manipulate stocks of pharmaceutical companies and to suppress promising medical treatments developed by companies that he and others with ties to organized crime are trying to destroy for profit.)

The New York Times has yet to report that Phillips was arrested as part of the largest Mafia bust in FBI history, and nor has The New York Times ever reported that the Mafia has a large presence on Wall Street.

The Wall Street Journal did report that Phillips had been arrested, but The Journal provided nothing at all in the way of detail about the ties between Phillips and the Mafia, much less about his earlier central role, along with leading mobsters and BCCI, in the savings and loan scandal (i.e. in the “bust out” of the American economy). Instead, The Journal simply noted that Phillips had been arrested “in a sweeping case alleging organized crime influence on Wall Street,” and then described some Phillips businesses in relatively benign terms. However, the author of The Wall Street Journal article did note that when he tried to interview Phillips, he not only found Phillips uncooperative, but was told by Phillips: “You’re not supposed to be talking to me. You’re going to get buried.”

* * * * * * * * *

A few weeks after the Wall Street Journal story was published, Phillips was acquitted on all counts. Most of the mobsters arrested in Operation Uptick also did not do jail time, and as I noted earlier, most of them remain in business today. More specifically, they are involved with a nationwide network of brokerages, and as we will see, this network of brokerages (though the brokerages have changed their names, and there are some new editions) is essentially the reincarnation of the network that BCCI and leading organized crime figures established in the 1980s.

As we know, the global network of brokerages linked to BCCI in the 1980s specialized in “busting out” small and medium-sized public companies. It should be added, though, that the establishment of this global network of brokerages was not unrelated to BCCI’s other ventures, including its involvement in the schemes to “bust out” savings and loan banks. Some of the brokerages in the global network were established as subsidiaries of the savings and loan banks that had been seized by BCCI and/or BCCI’s confederates, the most prominent confederate being, of course, Michael Milken (then the most powerful man on Wall Street).

Later chapters of this series will discuss the global network of brokerages in more detail, but to cite just one more example, a BCCI affiliate called the Saudi European Corp. and Michael Milken, among others, including Sheikh Mahfouz, gained control over a savings and loan operation called MDC Holdings. The ultimate goal, of course, was to “bust out” MDC Holdings, and, of course, that is ultimately what happened. But like the other savings loan banks in the network, MDC Holdings was, for a time, made to appear like a healthy and going concern, utilizing all of the methods that we have already discussed.

In other words, MDC Holding was a key component of Milken’s junk bond merry-go-round; it was a key recipient of the “brokered deposits” delivered by the organized crime figure and Khashoggi partner Mario Renda; and it was a key link in the “daisy chain” that saw all of the banks and miscreants in the network lending money back and forth to each other.

In addition, MDC Holdings counted among its subsidiaries a brokerage called Blinder Robinson, which was so notorious that it was known on the Street as “Blind’em and Rob’em.”

The eponymous head of Blinder Robinson was Meyer Blinder, whose diamond-encrusted pinky ring and thick, gold chains marked him as one among the new breed of financial operators who had descended upon Wall Street. Blinder was indicted in 1989, but he did only 39 months in prison, and was back in business upon his release. And, of course, Blinder was treated generously by the major U.S. news organizations, including our favorite, The New York Times, which published a 2004 obituary marking the death of Meyer Blinder—an obituary that we should briefly review because its omissions are related to the omissions in the Sheikh Mahfouz obituary, to which we will return momentarily.

* * * * * * * * *

Upon the death of Meyer Blinder, The New York Times reported that Blinder had been the “King of Penny Stocks,” and the Times described Blinder’s “penny stock” business as follows:  “Keep pushing the stock up, moving it from hand to hand at higher prices until the ‘story’ behind the stock wears thin. Then just walk away from it.”  The Times added that Blinder had been charged with nothing worse than selling stock at “markups that were above the allowed 10 percent.” In addition, The Times reported that Blinder had always warned that “everybody who gambled on penny stocks knew the risk,” and The Times seemed to agree with that statement (the suggestion being that the investors in penny stocks were suckers who deserved what they got when Blinder and his confederates stole all their money).

It was not, of course, the case that Blinder’s outfit simply kept “pushing the stock up” until it came time to “just walk away from it.”  Nor was it the case that ordinary investors were fully aware of the risk. Blinder’s brokerage, like others in the network, perpetrated “pump and dump” frauds, the most important component of which was not the “pump,” but rather than “dump” and the accompanying manipulative short selling that sent stocks into death spirals, with the stocks hitting zero before ordinary investors could become even remotely aware that they were being fleeced. That is why the operation was called “Blind’em and Rob’em,” though The New York Times did not report that, and The Times did not report that the “Blind’em and Rob’em” schemes had “busted out” (i.e. destroyed) at least a hundred publicly listed companies over the course of its amazing crime spree.

Among the miscreants who manipulated stocks in league with Blinder Robinson were (according to various indictments) Thomas Quinn and Arnold Kimmes who (as we know) had operated a number of other BCCI-linked brokerages. Quinn, recall, was an associate of the Genovese Mafia family, while Kimmes had been identified in a 1973 FBI report as a “major organized crime figure.” When Kimmes was indicted, he escaped prison by ratting on Meyer Blinder. In 2000, Richard Walker, then the SEC’s director of enforcement (who had failed, for the most part, to take any enforcement actions in this regard), gave testimony to Congress in which he described Blinder Robinson as being part of a network of brokerages that were tied to organized crime. The New York Times, of course, reported none of this.

The Times, did, however, report (approvingly) that Blinder had “raised more than $200 million for starting and nurturing businesses.”  More specifically, he raised $200 million to seize control of businesses that he and others subsequently “busted out,” but the Times left that part out, and concluded its story by informing its readers that Blinder’s “generosity to charities like the Denver’s Children’s Hospital was well known.”  And that was it. All the news that was fit to print, according to the Times, which did not see fit to print anything close to quantifying the damage that Blinder Robinson had inflicted on the global financial system, much less the fact that it had done so in league with BCCI and a host of mobsters and terrorist financiers who were involved with the larger BCCI enterprise.

* * * * * * * * *

One of Blinder Robinson’s key principals in the 1980s was a fellow named Amr Ibrahim Elgindy, and later chapters of this series will be devoted entirely to discussing Amr Ibrahim (a.k.a. Anthony) Elgindy because he later established a short selling syndicate that remains in operation today, though Elgindy himself was, in 2005, sentenced to 11 years in prison on charges of securities fraud and bribing FBI agents to provide him with confidential information about government investigations into companies that his short selling crew had targeted for destruction.

During his 2004-2005 trial, prosecutors stated that Anthony Elgindy had ties to Al Qaeda, and that he might have traded ahead of his advance knowledge of the September 11 conspiracy.

In support of their contention that Elgindy had ties to Al Qaeda, the prosecutors began by noting that Elgindy had delivered large sums of money to an outfit called Mercy International, but at this point the judge cut off the prosecutors and forbade them from any further discussion of Elgindy’s ties to terrorism. According to the judge, linking Elgindy to terrorists would bias the jury, which was a bit like saying that it would be unfair to discuss a criminal’s ties to the Mafia, but the major U.S. news organizations seemed to agree with the judge. The New York Times published a story casting doubt on the prosecution’s contention that Elgindy had ties to terrorism, and The Wall Street Journal not only reported that the prosecution had unfairly biased the jury by mentioning terrorism, but published a long story strongly suggesting that it would be unfortunate if Elgindy were to be sentenced to prison at all.

Again, later chapters of this series will be devoted entirely to the true story of Anthony Elgindy and his short selling syndicate, but for the purposes of this chapter it is enough to know that Elgindy did, in fact, have ties to terrorists, and it is possible that he developed these relationships while working for the BCCI-linked Blinder Robinson. It is also possible that prosecutors were cut off by the judge when they began to discuss Elgindy’s ties to Mercy International because at that time the Department of Justice and other U.S. government agencies were not keen for the public to know about Mercy International’s ties to terrorism. Indeed, officials in Washington were going to some lengths to cover-up Mercy International’s ties to terrorism, and though it is not clear why they were doing so, it is noteworthy that Mercy International was co-founded by people who had formerly been involved with the BCCI enterprise.

One of Mercy International’s co-founders was Sheikh Mahfouz, who, of course, was one of the most “prominent” bankers on the planet and a business partner of numerous “Washington insiders.” Another of Mercy International’s co-founders was a man named Abdurrahman Alamoudi, who was the scion of one of Saudi Arabia’s wealthiest families, a resident of the United States, and an honorary member of the American establishment. Mr. Alamoudi had contacts at the highest levels in Washington, and for a time during the 1990s, he worked in the White House as an advisor (on Middle Eastern affairs, terrorism, etc.) for President Bill Clinton.

In addition, Mr. Alamoudi (Elgindy’s close associate) was one of the most important figures in Osama bin Laden’s organized crime (and terrorism) syndicate. (Osama bin Laden’s outfit, of course, is usually referred to as “Al Qaeda,” and I will continue to use that term in contexts where it has been used by U.S. officials, but it should be recalled that Osama bin Laden himself never used the term “Al Qaeda” until long after U.S. officials invented the name and inserted it into the public lexicon. As we know from earlier chapters of this series, Osama bin Laden was, prior to September 11, 2001, better known as a leading figure in the Muslim Brotherhood and chairman of a Muslim Brotherhood outfit called the Islamist International).

In 2003, Mr. Alamoudi (co-founder of Mercy International, and one of Elgindy’s closest associates) was arrested at London’s Heathrow airport when customs officials found that he was carrying a suitcase with a secret compartment containing $350,000 in American cash. At this point, U.S. officials went to lengths to cover-up Mr. Alamoudi’s ties to Osama bin Laden, and in 2004 (the same year when the judge prohibited prosecutors in the Elgindy trial from elaborating on Mercy International and Elgindy’s ties to terrorism), the Department of Justice issued a press release stating that Mr. Alamoudi was a Saudi “dissident” who had been indicted for illegal financial transactions with the government of Libya, and who had been involved in a conspiracy to assassinate the crown prince of Saudi Arabia, described by the DOJ press release as “an important ally in the war on terror.”

Subsequently, many news organizations (citing U.S. officials who wished to remain anonymous, perhaps because no U.S. official wished for his name to be attached to this outlandish story) reported that the conspiracy to assassinate the crown prince of Saudi Arabia had been hatched by Moammar Qadaffi, then leader of Libya, and that it was Qadaffi himself who had delivered the suitcase full of cash to Mr. Alamoudi, who was to use the cash to finance the assassination plot. Like the DOJ, the major news organizations reported that Mr. Alamoudi was a Saudi “dissident,” and that other unnamed Saudi “dissidents” in London were involved in the conspiracy (hatched by Qadaffi) to assassinate the crown prince. Since the major U.S. news organizations had rarely reported on “dissidence” in the context of Saudi Arabia, the implication of this big story about Mr. Alamoudi and Qadaffi was that Saudi dissidents were, as general rule, undesirables who hatched assassination plots with tyrants.

Meanwhile, in 2004, the major U.S. news organization were reporting that the Qaddaffi regime was a leading state sponsor of terrorist organizations, including Al Qaeda, and that same year, 2004, The New York Times broke the big news that Qadaffi was developing a nuclear weapons program. Not long before, of course, the major U.S. news organizations (most notoriously, The New York Times) had reported that the regime of Saddam Hussein was a leading sponsor of Al Qaeda, and that Saddam was developing a nuclear weapons program, possibly with plans to deliver a nuke to Osama bin Laden.

Meanwhile, every major U.S. news organization, including the New York Times, reported that the war on terror was necessary to defend our freedoms and democracy, and that our important ally in the war on terror was the government of Saudi Arabia (i.e. the most totalitarian state on the planet).

It was soon learned that most everything reported by the major U.S. news organization concerning Saddam Hussein was patently false, but this did not result in much introspection on the part of the major U.S. news organizations, including The New York Times, whose star reporter, Judith Miller, it was revealed, had done nothing more than take dictation for the White House. And after the stories about Saddam Hussein were shown to be false, the major U.S. news organizations continued to report essentially the same party line, which was that U.S. troops in Iraq were fighting an alliance of Al Qaeda and Saddam Hussein loyalists, and that this was a war in the name of freedom and democracy.

Some years later, in 2011, The New York Times and other major U.S. news organizations reported that President Barrack Obama had ordered the U.S. military to go to war in support of “Arab Spring” rebels who were fighting for freedom and democracy in Libya. At this time, one important story still circulating was the story that Qadaffi had hatched a conspiracy to assassinate the crown prince of Saudi Arabia, and had delivered a suitcase full of cash to Mr. Alamoudi, a Saudi “dissident” who was to carry out the plot. In addition, nobody had forgotten that the Qaddaffi regime was a state sponsor of terrorist organization, or that Saudi Arabia was American’s “important ally in the war in on terror.”

Moreover, it was reported that the Arab Spring rebels in Libya had received their sophisticated weaponry from Washington’s close allies, namely the governments of Saudi Arabia and Qatar (i.e. totalitarian states that apparently supported freedom and democracy in Libya).

It is not the purpose of this story to provide all of the facts concerning the “Arab Spring” and the war on terror, but there are some facts that need to be clarified because, as we will see, these facts pertain to the present state of the global financial system. It is also necessary for us to come to terms with the fact that reporting by the major U.S. news organizations, and most notoriously The New York Times, has been not just false (as in containing errors) but precisely the opposite of the truth, and quite deliberately so. It has, indeed, become apparent that outfits like The New York Times have done nothing other than publish the eminently creepy sort of black is white, up is down, doublethink propaganda that was portrayed by Orwell in books that were, until now, presumed to be fiction. Therefore, we need to clarify the following:

1)       Saudi Arabia is not “an important ally in the war on terror.” Saudi Arabia is the leading state sponsor of terrorist organizations, including the one called Al Qaeda.

2)      Terrorists do not hate our freedoms. To the contrary, terrorists led the “Arab Spring” campaign for freedom and democracy. Nearly all of the “Arab Spring” rebels in Libya were members of the Libyan Islamic Fighting Group, which was the name of the Al Qaeda franchise in Libya.

3)      As of 2004, the Qadaffi regime, like Saddam’s regime, was not a sponsor of Al Qaeda. To the contrary, Al Qaeda (i.e. the Libyan Islamic Fighting Group) was preparing to overthrow the Qaddaffi regime (with support for the regime in Washington and its totalitarian allies).

4)      Court documents produced during the trial of Mr. Alamoudi make clear that Mr. Alamoudi did not receive his suitcase full of cash from Qadaffi, and that Qadaffi was not involved in any conspiracy to assassinate the crown prince of Saudi Arabia. Rather, Mr. Alamoudi received the suitcase full of cash from an outfit called the World Islamic Call Society. Previously, the World Islamic Call Society had been sponsored by Qadaffi, but as of 2004, when it was delivering suitcases full of cash to Mr. Alamoudi, the World Islamic Call Society was sponsored by the Saudi government, and it was (in partnership with Al Qaeda and the regime in Washington) leading the opposition to overthrow the Qadaffi regime.

5)      After Qadaffi was deposed, Secretary of State Hillary Clinton traveled to Libya, where she spent most of her time in the offices of the World Islamic Call Society. Clinton congratulated the World Islamic Call Society for leading the opposition against Qadaffi, but she did not repeat the fact that the World Islamic Call Society also delivered suitcases of full of cash to Mr. Alamoudi, an Al Qaeda operative who formerly worked in the White House for Clinton’s husband, then President Bill Clinton. In addition, Clinton said nothing more about the fabricated story about Mr. Alamoudi being a “dissident” but nor did she correct the fabricated story about Qaddafi’s supposed involvement in a conspiracy to assassinate the crown prince of Saudi Arabia.

6)      Mr. Alamoudi was not a Saudi “dissident.” To the contrary, he was among the co-founders of numerous financial institutions, Islamic organizations, and charities (including Mercy International) all of which were sponsored by the Saudi royal family, and some of which were also sponsored by the regime in Washington. In addition, of course, Mr. Alamoudi (who had, at various times, been employed not only by the White House, but also by other U.S. government agencies) was one of the most important figures in Osama bin Laden’s terrorist organization (whose leading sponsor was the Saudi royal family).

7)      U.S. officials had known that Mr. Alamoudi had ties to Osama bin Laden since at least 1993 (while Mr. Alamoudi was working in the White House), and U.S. officials covered up this information long after Mr. Alamoudi was caught at Heathrow with his suitcase full of cash. It was not until 2005, when earnest U.S. government whistleblowers had already gone public with the information, that the U.S. Treasury Department (quietly) issued a press release (ignored by the media) reporting that Mr. Alamoudi was, in fact, one of the most important funders of Al Qaeda. Even then, the DOJ declined to charge Mr. Alamoudi with any crime related to terrorism, and instead moved ahead with the false charge that Mr. Alamoudi had received his suitcase full of cash from the government of Libya. (Mr. Alamoudi is now serving a 29 year prison sentence, but some U.S. officials say that he will be released on short order, because, after all, he is innocent of the crime for which he was charged).

8)      Neither Qadaffi nor Saddam had any intention to provide Osama bin Laden with nuclear or other weapons of mass destruction. However, in 2001, earnest FBI agents announced that at outfit in Chicago called Benevolence International (described by the earnest FBI agents as an “Al Qaeda front”) had worked with a Chechen organized crime (and terrorism) syndicate to obtain a nuclear bomb for Osama bin Laden. One of the Chechens in that syndicate, Shamil Basaev, had once planted radioactive materials in a Moscow park and informed the Russian police that he had done so, promising that next time it would be exploded as a so-called “dirty” nuclear device.

9)      Benevolence International was co-founded by prominent Saudi billionaires, some of whom, including Sheikh Mahfouz and Mr. Alamoudi, had formerly been involved with the BCCI enterprise. Its overseas offices, including its office in Chechnya, were managed by top Al Qaeda operatives. However, neither Benevolence International nor any of its principals were ever charged with any crime related to terrorism or trying to obtain nukes for Osama bin Laden. Benevolence International remains open for business today. It is headquartered in Chicago, and partly funded by the U.S. government.

10)   The U.S. government also sponsored the leaders of that same Chechen organized crime syndicate, which was (in addition to being an organized crime syndicate) a terrorist organization trained by Osama bin Laden & Co, though the New York Times reported that those same Chechens were freedom fighters interested only in obtaining Chechen independence from Russia.

All of which brings us back to Anthony Elgindy.

* * * * * * * * *

As we know, Elgindy’s prosecutors began to argue that Elgindy had ties to terrorism and advance knowledge of the September 11 conspiracy, but the judge forbade the prosecutors from further discussion of Elgindy’s ties to terrorism soon after the prosecutors mentioned that Elgindy had delivered a large sum of money to an outfit called Mercy International. We also know that Mercy International was co-founded by prominent Saudi billionaires, among them Sheikh Mahfouz and Mr. Alamoudi, some of whom were previously involved with the BCCI enterprise. At the time of Elgindy’s trial in 2004, U.S. officials were not keen for the public to know much about Mercy International, and, of course, U.S. officials were covering up the fact that Mr. Alamoudi was a key figure in Osama bin Laden’s terrorist organization.

Meanwhile, earnest U.S. government investigators had learned that another of Mercy International’s co-founders had been none other than Osama bin Laden. In addition, earnest U.S. government investigators had linked Mercy International to the following: 1) Ramzi Yousef, said by U.S. officials to have been the “mastermind” of the 1993 World Trade Center bombing; 2) the terrorists who carried out the simultaneous 1998 bombings of two U.S. embassies in Africa; 3) Khalid Sheikh Mohammed, alleged “mastermind” of the September 11 conspiracy (and uncle of Ramzi Yousef).

The top official in Mercy International’s Pakistan office was Zaid Sheikh Mohammed (brother of Khalid and uncle of Ramzi). Back in 1998, meanwhile, earnest FBI agents also linked Mercy International (and the Chicago based Benevolence International) to a Chicago company called Global Chemical, which was (according to the earnest FBI agents) in the business of manufacturing explosives and chemical weapons for Osama bin Laden.

However, neither Mercy International nor any of its principals has ever been charged with any crime related to terrorism, and Mercy International remains in business to this day. In addition, Mercy International has tax-free status as a “charity.” But we, the people, do not have tax-free status. We pay taxes, and the regime in Washington uses some of our taxes to fund…Mercy International. I will repeat: the government of the United States has for many years been funding an outfit—Mercy International—that was co-founded by Osama bin Laden.

Global Chemical is still doing business in Chicago as well, though it is unclear whether it is still manufacturing chemical weapons for terrorists.

Anthony Elgindy, as I mentioned, is presently serving an 11 year sentence on charges of securities fraud and bribing FBI agents (he is expected to be released from prison this year, 2013, having served only eight years). However, Elgindy is in prison thanks only to the perseverance of a few honest FBI agents, his prosecutors (who were lambasted for linking Elgindy to terrorism), and most of all, a businessman whose company was destroyed by Elgindy’s short selling syndicate. After his company was destroyed, the businessman (who would later do work for DeepCapture, the website you are now reading) discovered that Elgindy operated a private internet chat site on which he, Elgindy, and other short sellers plotted and coordinated their short selling attacks on public companies.

Having made this discovery, the businessman secretly gained access to Elgindy’s private internet chat site and hired a secretary to work full-time printing out transcripts of the conversations that Elgindy and his short selling crew were having on that chat site. Soon enough, these transcripts were so numerous that they filled the businessman’s garage. In addition, the transcripts provided clear evidence of multiple crimes in progress, and so the businessman handed the transcripts over to some earnest FBI agents, who discovered not only that Elgindy had at least two FBI agents on his payroll, but also that Elgindy and his short selling crew had “busted out” (i.e. destroyed) at least two hundred publicly listed companies. If it were not for those transcripts, it is doubtful that Elgindy would ever have been indicted.

In addition, as I noted, few of the other people involved with Elgindy’s short selling syndicate were ever charged with any crime. It is unclear why they were not charged with any crime, but it is worth recalling that a few top FBI and DOJ officials were responsible for covering up the BCCI scandal and related scandals, such as Iran-Contra and the employment as U.S. government agents of various global terrorists (e.g. Abu Nidal and Monzer al-Kassar) who had involvement with the BCCI enterprise. As we will see, some of those same officials (including the FBI’s chief of counter-terrorism; the chief of the FBI’s organized crime task force; and the director of the FBI) subsequently became employed by people who were key figures in Anthony Elgindy’s short selling syndicate.

* * * * * * * * *

It is also worth recalling that soon after BCCI collapsed in 1991, a Muslim Brotherhood leader (and Sudanese government official) named Hasan al Turabi established the Islamist International, appointing Osama bin Laden to serve as chairman. Recall also that Osama bin Laden’s first order of business as chairman of the Islamist International was to assist a Muslim Brotherhood initiative—known as “The Financial Jihad”—to replace the BCCI enterprise with a global financial network that would exceed the BCCI enterprise in scope and destructive power.

Yossef Bodansky, then director of the House Task Force on Terrorism, reported (in a 2000 book on Osama bin Laden): “The collapse of BCCI…could not have come at a worse time…. Turabi [and the Islamist International] urgently needed an expert to salvage whatever was possible and rebuild a global financial system [to replace the BCCI enterprise]. By then Osama bin Laden was the most qualified individual in Khartoum to untangle this financial mess. In late summer 1991, Turabi approached bin Laden and asked for help.”

Osama bin Laden agreed to help—and he pursued his task with enthusiasm. By 2000, he had successfully rebuilt “a global financial system,” and he had done more than merely replace the BCCI enterprise. He and other Muslim Brotherhood oligarchs more important than him had built what was, without doubt, one of the greatest financial empires the world had ever known. And it was not only one of the most powerful financial empires on the planet, but also one the world’s leading transnational organized crime syndicates, involved in all of the activities—from narco trafficking and the smuggling of radioactive materials, to terrorism and the perpetration of destructive financial crime—that characterized the BCCI enterprise of the 1980s.

Linked to this financial empire was Anthony Elgindy’s short selling syndicate.

Elgindy’s private internet chat site for short sellers was hosted by a company called Infocom, which had been founded by a man named Mousa Abu Marzook. Although Marzook was best known as the political chief of Hamas, responsible for the notorious Hamas death squads, he was also a key figure in the Islamist International, the chairman of which was, of course, Osama bin Laden. In 1993, earnest FBI agents had linked Marzook to the bombing that year of the World Trade Center, and in 2000, the director of the House Task Force on Terrorism reported that Marzook was among the terrorists who were, along with Osama bin Laden and other key figures in the Islamist International, planning to perpetrate a “spectacular” terrorist attack inside the United States.

However, Marzook remained a free man, traveling often to the United States.

In addition to being a global terrorist, Marzook was a prominent banker and the co-founder of numerous financial institutions. For example, Marzook co-founded an outfit called Al Aqsa Bank, which operated a joint venture in the United States with Citibank until 2011, when Al Aqsa Bank collapsed. Marzook was also a co-founder of a major financial institution in Geneva called Bank al Taqwa and its U.S. affiliate, an outfit called BMI, Inc., which was itself a sizeable financial institution (and an investor in Global Chemical, the outfit in Chicago that was manufacturing chemical weapons for Osama bin Laden).

Among the other co-founders of Bank al Taqwa and BMI, Inc. were Mr. Alamoudi (a key figure in Osama bin Laden’s organization), the Blind Sheikh (a global terrorist and banker who was linked to the 1993 bombing of the World Trade Center, and who also co-founded Faisal Islamic Bank, formerly the most important affiliate of BCCI), a Muslim Brotherhood oligarch and Islamist International banker named Yasin al Qadi (later described by the U.S. Treasury Dept. as a “Specially Designated Global Terrorist”),  several of Osama bin Laden’s family members (all of them members of “Al Qaeda”), and multiple other  global terrorists.

In 1999, Bank al Taqwa established the Islamic Cultural Center, later said by the U.S. Treasury Department to be “Al Qaeda’s main operating base for the movement of men, weapons, and money around the world.” That same year, 1999, Bank al Taqwa was linked to the Bank of New York scandal, which saw the Bank of New York (and Bank al Taqwa) laundering upwards of $10 billion for (among others) Russian organized crime syndicates. Numerous people linked to the Bank of New York scandal (e.g. Marc Rich, Gene Phillips, Michael Milken, Abbas Gokal, Adnan Khashoggi, and several of Bank al Taqwa’s co-founders, among others to be discussed) were formerly involved with the BCCI enterprise. In addition, that money laundering involved pump and dump schemes, with much of the manipulative short selling on the “dump” end of the schemes perpetrated by Anthony Elgindy’s short selling syndicate.

See Chapter 1 of this series for a fuller description of how pump and dump schemes and manipulative short selling are deployed for the purpose of money laundering, but the short version is that dirty money is invested in target companies , and comes out partially clean in the form of short selling profits, which are delivered onwards to cooperative financial institutions (such as Bank al Taqwa and the Bank of New York). In a variation on the same theme, money is invested in a company as “death spiral” finance (see chapter 1 of this series), which causes the company’s stock price to fall, at which point affiliated short sellers attack the stock, triggering a “death spiral.”

In both scenarios, the target companies are destroyed (i.e. busted out), and again, Elgindy’s short selling crew “busted out” at least 200 publicly listed companies in the United States.

Lawyers for some of these victim companies have assembled evidence that Elgindy and his short selling syndicate perpetrated a number of “bust outs” in league not only with Bank al Taqwa, but also with a major investment fund called Faisal Finance, which provided the victim companies with death spiral finance. Faisal Finance was a subsidiary of a Muslim Brotherhood outfit in Geneva called Dar al Maal al-Islami, which was (and is) one of the largest financial institutions on the planet, boasting partnerships with some of Wall Street’s most notorious brokerages and investment houses.

One person who helped build Dar al Maal al-Islami into one of the largest financial institutions on the planet was none other than Osama bin Laden. In addition, Osama bin Laden founded at least one of Dar al Maal al-Islami’s subsidiaries, a bank in Sudan called al Shamal, and he had involvement with Faisal Finance, the outfit that was dealing with Elgindy’s short selling syndicate.

The most important of Faisal Finance’s principals (and a board member of both Faisal Finance and Dar al Maal al-Islami) was Yasin al Qadi, the Muslim Brotherhood (and Islamist International) figure who was among the co-founders of Bank al Taqwa. After the September 11 attacks of 2001, the U.S. Treasury Department reported that Yasin al Qadi had funded Osama bin Laden through Faisal Finance. In addition, Yasin al Qadi became one of only a few dozen people (another being Marzook, owner of the company that hosted Elgindy’s private internet chat site for short sellers) whom the Treasury Department labeled as “Specially Designated Global Terrorists.”

In explaining why Yasin al Qadi had been named a “Specially Designated Global Terrorist,” the Treasury Department noted not only that he had co-founded Bank al Taqwa (which established “Al Qaeda’s main operating base in Europe”), and not only that Osama bin Laden had dealings with Yasin al Qadi through Faisal Finance, but also that Yasin al Qadi had operated an “Al Qaeda front” called the Muwafaq Foundation. The man who founded the Muwafaq Foundation was Sheikh Mahfouz, who had been one of Yasin al Qadi’s most important business  partners since BCCI days. In addition, of course, Sheikh Mahfouz co-founded Mercy International and other “Al Qaeda fronts.”

However, Sheikh Mahfouz was never charged with any crime related to terrorism. Nor was Yasin al Qadi charged with any crime related to terrorism, and nor were any of three dozen or so other bankers labeled as “Specially Designated Global Terrorists” ever charged with any crime related to their banking or their status as “Global Terrorists.” Meanwhile, neither Faisal Finance nor Bank al Taqwa nor BMI Inc. nor Dar al Maal al-Islami nor any of their other principals nor any other bank has ever been charged for doing business with Osama bin Laden, and nobody has ever been charged for establishing an “Al Qaeda front” or establishing chemical weapons factories for terrorists, or establishing “Al Qaeda’s main operating base in Europe for the movement of men, weapons, and money around the world.” (that operating base is still in business, though most of the men are now Arab Spring freedom fighters).

In addition, with the exception of Anthony Elgindy, no terrorist financier has ever been charged with any crime related to their perpetration (in partnership with prominent American oligarchs) of destructive financial schemes that have wrought havoc on the American markets.

* * * * * * * * *

Earnest Treasury officials and FBI agents exposed numerous “Al Qaeda fronts” and named a select number of bankers as “Specially Designated Global Terrorists” as part of Operation Green Quest, which was billed by FBI Director Robert Mueller as the largest law enforcement effort ever undertaken by any nation or combination of nations in the entire history of the world. As of 2002, thousands of earnest U.S. government investigators were employed by Operation Green Quest, which was led by the Treasury Department, with important supporting roles played by the FBI and other government agencies.

Operation Green Quest was focused largely on what earnest government investigators described at the time (see Chapter 2 of this series) as the “Safa Group,” or sometimes the “SAAR Network”—a global network of interconnected Islamic organizations, “charities” (e.g. Mercy International, Benevolence International, and many others), investment funds, brokerages, and financial institutions, all of which were linked to Osama bin Laden and other terrorists. In fact, U.S. officials had been aware of this global network for many years, and information about some components of the global network had long been part of the public record.

In his 2000 book on Osama bin Laden, Bodansky (then director of the House Task Force on Terrorism) had, of course, noted that Osama bin Laden had played a key role in building global network—and the network described by Bodanksy was essentially the same thing as the “SAAR Network” that would later become a principal focus of Operation Green Quest. Bodansky also reported (in 2000) that the financial network organized by Osama bin Laden and his billionaire associates, along with other Muslim Brotherhood leaders and terrorists who were key figures in the Islamist International, stretched from the Middle East, Pakistan, and Sudan to Geneva, Antwerp, the Bahamas—and onwards to Wall Street.

Meanwhile, as noted by the director of the House Task Force on Terrorism in 2000, the Muslim Brotherhood, working with Osama bin Laden, had  “gained control and influence over several major Islamic financial institutions operating in the West, such as the Islamic Holding Company, the Jordanian Islamic Bank, the Dubai Islamic Bank, the Taqwa Bank (a.k.a. Bank al Taqwa, which had established “Al Qaeda’s main operating base Europe”), and Faysal Islamic Bank.”

Faysal [a.k.a. Faisal] Islamic Bank, we know, had formerly been the most important affiliate of the BCCI enterprise. It was, recall, co-founded by the Blind Sheikh (a key figure in the Islamist International, linked to the 1993 World Trade Center bombing) and a Saudi prince named Mohammed bin al-Faisal. After BCCI collapsed in 1991, Faisal Islamic Bank was folded into Dar al Maal al-Islami, which, we know, soon became one of the largest financial institutions on the planet, and which counted among its subsidiaries a  bank that was founded by Osama bin Laden, and other financial firms that did extensive business with Osama bin Laden. Also involved with Dar al Maal al-Islami, of course, was Prince Mohammed and other members of the Saudi royal family, including Prince Mohammed’s brother, Prince Turki bin al-Faisal, who served as the chief of Saudi intelligence from 1977 until 2001, when he resigned just a few weeks before the September 11 attacks. (Prince Turki subsequently became Saudi ambassador to Washington).

The party line put forth by the New York Times and other major U.S. news organizations maintains that the Saudi government disowned Osama bin Laden and stripped the terrorist leader of his Saudi citizenship in the mid-1990s, which was when Osama bin Laden began issuing manifestos denouncing the corruption of the Saudi royal family. That might be true, so far as it goes, and it is certainly true that Osama bin Laden often railed against the corruption of the Saudi royal family, but it also true that Osama bin Laden had eminently close (and corrupt) relationships with at least one faction of the Saudi royal family, and more particularly with the faction of the royal family (including Prince Turki, chief of Saudi intelligence) that had previously been involved with the BCCI enterprise.

Moreover, the party line fails to take into account that while these Saudi princes denounced Osama bin Laden’s violent terrorism, they fully sponsored his more important mission—the mission to build a global financial network.  Indeed, these Saudi princes were, of course, business partners of Osama bin Laden. In addition, Prince Turki, chief of Saudi intelligence, was fully supportive of Osama bin Laden’s business dealings with a close knit group of Saudi billionaires, including Sheikh Mahfouz, who regarded themselves as servants of the Saudi royal family. We might also consider that Washington regarded these business relationships as being kosher, or so it would seem given that Osama bin Laden’s business partners continued to receive VIP treatment in Washington long after earnest U.S. government officials exposed the relationships.

Meanwhile, as the director of the House Task Force on Terrorism noted in 2000, the Pakistani government had “agreed to expand the use of Karachi as a center for the clandestine financing of the international Islamist movement. To be managed by Osama bin Laden, the new financial system would be based on a wide network…to conceal the flow of cash to the various terrorist networks in the West.” Towards this end, and with the endorsement of the Pakistani government, “the Karachi center linked up with numerous Pakistani landowners, financial companies, and business people close to narcotics circles to utilize their international financial relations and contacts…”

Most of those “business people close to narcotics circles” had previously been involved with the BCCI enterprise, and though we will meet all of them in due course, it is, for now, enough to know that the most important of them was a man named Dawood Ibrahim who was (and is) much more than just your average businessman close to narcotics circles. He has regularly featured on Forbes magazine’s list of the “50 Most Powerful” people in the world, and he is the single largest trader on the Karachi stock exchange. In addition, he is one of the biggest (and most destructive) traders on U.S.  stock exchanges, and we will see that he continues to this day to have extensive business with Wall Street brokerages and investment houses. In addition, Ibrahim is dangerous mobster, a global terrorist, and a Pakistani intelligence asset who operates an organized crime (and terrorism) syndicate called D-Company (which is, in turn, closely intertwined with others of the world’s organized crime and terrorism syndicates).

Dawood Ibrahim and D-Company have been linked to multiple terrorist atrocities, including the 2008 assault that saw terrorists storming luxury hotels and a synagogue in Mumbai, and then systematically murdering 175 people, seven of them Americans, one a girl only 13 years old. For a time in 2002, Dawood Ibrahim was the only person in the world listed by the U.S. government as both a “Global Narcotics Kingpin” and a “Specially Designated Global Terrorist” though he was hardly the only person who deserved both those appellations, and the U.S. government no longer applies them to Dawood Ibrahim. Presently, Ibrahim resides quite openly in Karachi, with the protection of Pakistan’s intelligence service, and he travels often to the United States, where he conducts his business unmolested by the homeland security apparatus (which is apparently more interested in harassing law-abiding Americans).

In addition, of course, the U.S. government knew long before September 11, 2001, that Osama bin Laden had, with the help of Dawood Ibrahim and others, established the “Karachi center.” Meanwhile, Prince Turki and other Saudi royals were fully on board with the plan for Osama bin Laden and prominent narco-oligarchs to establish a financial network in Karachi. In addition, the chief of Saudi intelligence, though he publicly denounced violent terrorism, informed the Pakistani government that the Karachi financial network (which was, in turn, linked to the global network that had been established earlier) could use Saudi financial institutions to finance terrorist operations, including operations inside the United States.

Bodansky (then director of the House Task Force on Terrorism) wrote in 2000 that Prince Turki was not initially aware that Osama bin Laden had been assigned to run the Karachi-based financial network, but “when Riyadh was later informed of bin Laden’s role in the Karachi center, Prince Turki ignored the information and continued to allow the use of Saudi financial institutions [to support the Islamist International’s terror network].”

As the director of the House Task Force on Terrorism also reported in 2000, Osama bin Laden, in assembling a global financial network, collaborated closely with what he and others in the Islamist International referred to as “The Brotherhood Group,” a close-knit network of no less than 130 extremely wealthy financial operators in the Persian Gulf states. The director of the House Task Force reported further that: “The key members of the Brotherhood Group have a well-known and established financial presence in the West—sixty five of them have major companies and businesses in the United States.”

One of the most important people in “The Brotherhood Group” was Sheikh Mahfouz, who, of course, was also one of the billionaires (see Chapter 2 of this series for the names of others) whom Osama bin Laden referred to as his “Golden Chain.” Other people in the “Brotherhood Group” were prominent bankers who had, like Sheikh Mahfouz, previously been involved with the BCCI enterprise. Among them were key BCCI figures Adnan Khashoggi, Sheikh Abdullah Taha Baksh, Gaith Pharoan, Yasin al Qadi, Mr. Alamoudi and others who were, like Sheikh Mahfouz, important business partners of “Washington insiders.” It should be noted further that U.S. officials had been well aware that these billionaires were building a global financial network with Osama bin Laden since the 1980s, but they (with help from a cooperative media) sought to keep the information hidden from the American public (though the information can, with some effort, now be found in the public record).

* * * * * * * * *

To the extent that some of the facts have reached the public, the facts have been distorted by what seem to have been carefully orchestrated disinformation campaigns. Typically, these disinformation campaigns see prominent American pundits with ties to the regime in Washington coming forward with some pertinent facts, but presenting the facts in such as way as to distort the larger picture.

For example, there has been much discussion among American pundits about a report that French intelligence had monitored a meeting that Osama bin Laden’s chief financial officer held with Prince Turki (chief of Saudi intelligence) and leading Saudi billionaires at the Royal Manceau hotel in Paris. This meeting took place in 1996, two years after the Saudis had ostensibly requested Osama bin Laden’s extradition from London (yes, Osama bin Laden resided for a time in London), and the same year that the Saudis had ostensibly requested the government of Sudan to “expel” Osama bin Laden (with “expel” being something altogether different from “arrest” or “prosecute”).

One of the billionaires in attendance at this meeting was Sheikh Mahfouz. Other billionaires who attended the 1996 meeting with Osama bin Laden’s chief financial officer (according to the French intelligence report) were Adnan Khashoggi, Abdullah Taha Baksh, and Gaith Pharoan, all of whom, we know, had been key figures in the BCCI enterprise during the 1980s. Which is important information, except that the information was delivered in such a way as to obscure the truth.

In other words, it was widely reported that the meeting in Paris was monitored by French intelligence, and that a French intelligence report concluded that the Saudi billionaires and Prince Turki attended this meeting only “to determine who would pay how much to Osama bin Laden.”  In addition, the French intelligence report stated that the payments to Osama bin Laden were “not so much an act of support but protection—a payoff to keep the mad bomber away from Saudi Arabia.”  And thanks to this report, that has remained the official party line: any payments by Saudi billionaires to Osama bin Laden were nothing more than protection money paid by people worried that the “mad bomber” would attack them.

But, of course, the party line is pure nonsense.

All of the billionaires who attended that meeting (and no doubt many similar meetings besides) did not merely deliver protection money to Osama bin Laden. They were also important business partners of Osama bin Laden. And they were business partners of Osama bin Laden not because he was a “mad bomber,” but because he was sophisticated financial operator who was fully capable of helping those billionaires carry out the mission (i.e. “The Financial Jihad”) to replace the BCCI enterprise with something bigger and better. Former BCCI figure Adnan Khashoggi, for one, played a key role, along with Osama bin Laden, in establishing the “Karachi center.”

Former BCCI figure Abdullah Taha Baksh was a principal with multiple financial institutions (e.g. Middle East Capital Group, Beirut Ryad Bank) that had extensive business with Osama bin Laden, according to U.S. government investigators (though not official U.S. government spokesmen). Sheikh Baksh also had extensive involvement with Dar al Maal al-Islami, the major financial institution that was built with help from Osama bin Laden. Sheikh Mahfouz, meanwhile, operated numerous financial firms—e.g. Al Khaleejia, Saudi Sudanese Bank, and others to be discussed–that did business directly with companies that had been founded by Osama bin Laden, and which were operated by Osama bin Laden.

National Commercial Bank (one of the largest financial institutions on the planet, founded by Sheikh Mahfouz and his family) also had business with Osama bin Laden.

In addition, these billionaires and others were, of course, among the principal sponsors of the Islamic organizations, charities, and other financial entities that were part of the “SAAR Network.”  Sheikh Mahfouz, we know, founded the Muwafaq Foundation, said by the U.S. Treasury Department to be an “Al Qaeda” front. He was a co-founder of Benevolence International, said by earnest FBI agents to be an “Al Qaeda front.” And he was among the co-founders of Mercy International, which was an Al Qaeda front, albeit one that was also funded by the regime in Washington.

Sheikh Mahfouz and other billionaires (e.g. Khashoggi, Sheikh Baksh, Yasin al Qadi, Mr. Alamoudi, and others to discussed in Chapter 2 of this series) were also the principal sponsors of numerous other SAAR Network entities—i.e. the entities that were, as of 2002, the principal targets of Operation Green Quest, the largest law enforcement in history.

To cite just one more example, all of the above-mentioned billionaires were involved with an outfit called the International Islamic Relief Organization (IIRO), a “SAAR Network” entity based in the suburbs of Washington, D.C.  Among the board members of the IIRO were Mr. Alamoudi (a key figure in Osama bin Laden’s organization) and Khalid Elgindy (brother of short seller Anthony Elgindy). Meanwhile, the IIRO’s offices in Macedonia, Kosovo, the Philippines, and Pakistan were all “Al Qaeda fronts” managed by top “Al Qaeda” operatives, according to earnest Operation Green Quest investigators and the United Nations officials, some of whom have reported that Osama bin Laden himself was an IIRO co-founder.

As of 1999, the IIRO office in Macedonia was operated by Osama bin Laden and his deputy, Aymen al Zawahiri, who were, at the time, training the Kosovo Liberation Army from bases in Macedonia. Also in Macedonia as of 1999, working with the Kosovo Liberation Army, was Anthony Elgindy, who had taken a break from his career as a destructive short seller. Upon his return from Macedonia, Elgindy posted a letter from a Kosovo Liberation Army leader thanking him, Elgindy, for sponsoring his travels to the United States.  At the time, of course, President Bill Clinton (who then employed multiple IIRO officials, including not only Mr. Alamoudi, but also Elgindy’s brother, Khalid, in the White House) had ordered the U.S. military to go to war in support of the Kosovo Liberation Army (a terrorist organization trained by Osama bin Laden), and the IIRO was sponsored not only by the Saudis, but also by Washington.

Two years later, of course, the September 11 attacks occurred, and Saudi Arabia became Washington’s “important ally in the war on terror.” That same year, 2001, we know, Robert Mueller (who had been appointed director of the FBI just weeks prior to the September 11 attacks) announced that Operation Green Quest was the largest law enforcement effort in history, and that its sole mission was to prosecute terrorists and the people who sponsor them. By 2002, Operation Green Quest investigators, we know,  were focused largely on the SAAR Network entities and associated billionaires, but that same year, 2002, there occurred several strange events that we should discuss because they have not been discussed by The New York Times or any other organ of state propaganda.

* * * * * * * *

In 2002, while the director of the FBI was still calling Operation Green Quest the largest law enforcement effort in the history of the world, an FBI special agent named Robert Wright held a press conference to announce the results of his investigations into terrorist organizations. There were not many journalists from the major U.S. news organizations at this press conference, as they were all busy writing whatever the director of the FBI had told them to write, but those who bothered to attend the press conference learned that Special Agent Wright had led some of the FBI’s most important investigations into terrorism, and concerning these investigations, Agent Wright had some important—and sad—news to report.

Indeed, agent Wright literally broke down in tears as he announced that he and his team of FBI investigators had, in all their year of investigating terrorism, failed to apprehend or secure the prosecution of even one of the people whom they had deemed to be key figures in Osama bin Laden’s organization. And in explaining why he and the others in his FBI team had failed to apprehend any terrorists or their sponsors, agent Wright stated (and others in his FBI team would later confirm it to be true) that FBI management and the Department of Justice had  “intentionally and repeatedly thwarted and obstructed my attempts to launch a comprehensive investigation to identify and neutralize terrorists.”

It might be worth recalling that Manhattan District Attorney Robert Morgenthau had previously alleged that FBI and DOJ management had intentionally and repeatedly “thwarted” his efforts to prosecute the BCCI enterprise. It might also be worth recalling that the DOJ official who had done most to thwart the DA’s investigation of BCCI was Robert Mueller. It was this same Robert Muller who had “intentionally and repeatedly thwarted” special agent Wright’s investigation, only to assume the directorship of the FBI just a few weeks prior to the September 11 attacks in 2001. And many of the terrorists whom Special Agent Wright and his FBI team were investigating had formerly been involved with the BCCI enterprise.

One person whom agent Wright investigated was “Specially Designated Global Terrorist” Yasin al Qadi, whom agent Wright described as “Al Qaeda’s banker.” As agent Wright knew, Yasin al Qadi was operating an “Al Qaeda front” (the Muwafaq Foundation) that had been founded by Sheikh Mahfouz. In addition, agent Wright had investigated Bank al Taqwa and BMI Inc., the financial institutions that had been co-founded by (among others) Yasin al Qadi, the Blind Sheikh, “Specially Designated Global Terrorist” Mousa Abu Marzook (host of Elgindy’s short selling chat site), and Mr. Alamoudi (formerly White House employee and key figure in Osama bin Laden’s organization).

As we know from earlier chapters of this series, earnest FBI agents learned in 1998 that BMI Inc. not only had partly funded the “Al Qaeda” terrorist attacks on two U.S. embassies in Africa, but also was financing Global Chemical, the outfit deemed to have ties to Osama bin Laden, and which was in the business of manufacturing explosives and chemical weapons. But, of course, neither BMI Inc. nor Bank al Taqwa (which established “Al Qaeda’s main operating base in Europe”) nor any of their principals were charged with any crime. To the contrary, FBI management deliberately “thwarted” efforts to investigate the bankers, many of whom were also terrorists.

Meanwhile, of course, both Bank al Taqwa and BMI Inc. perpetrated a host of financial schemes that did extensive damage to the U.S. economy. We will discuss the financial schemes in greater detail, but for the purposes of our present discussion it should first be noted that BMI, Inc. was also in the mortgage business, and it had provided mortgages (at steep discounts to market price) to some of the top officials at the FBI and other government agencies in Washington. Numerous politicians on Capitol Hill were also recipients of BMI, Inc.’s discount mortgages, as was Thomas Kean, then Governor of New Jersey, and later chairman of the September 11 Commission.

Governor Kean also sat on the boards of several companies (e.g. Hess Corp.) that had business with Sheikh Mahfouz and Mr. Alamoudi. When the September 11 Commission issued its report in 2004, the report (purportedly the product of a thorough investigation into Osama bin Laden’s terrorist organization) did not name BMI Inc. or any of its principals, including Mr. Alamoudi. In fact, the report did not identify any of Osama bin Laden’s banking partners or funders, and the report concluded that identifying the financiers of terrorism was “a matter of no importance.”

* * * * * * * * *

At his press conference, agent Wright, of course, noted that FBI management had deliberately “thwarted” his efforts to prosecute terrorists and their banking partners, but he also expressed some optimism. After all, Yasin al Qadi and Mousa Abu Marzook, among other banking oligarchs whom agent Wright had investigated, were, as of 2002, listed by the U.S. Treasury Department as “Specially Designated Global Terrorists” and agent Wright had reason to believe that FBI management would heed his advice to begin more vigorously to investigate the bankers/global terrorists who were key figures in Osama bin Laden’s terrorist organization. The day after agent Wright gave his press conference, however, the FBI management instead initiated a major investigation into…agent Wright.

More specifically, FBI management initiated a so-called “Office of Professional Responsibility Investigation” into Wright. FBI management did not inform Wright what rules of professional responsibility he had violated but this investigation effectively ended Wright’s career.  As Judicial Watch, a prominent public interest group, reported at the time: “FBI Special Agent Robert G. Wright, Jr., is facing retaliatory treatment from FBI management for telling the truth about dereliction of duty and negligence within the FBI.”

Meanwhile, a former FBI special agent named Nancy Floyd had come forward with a story about her own investigation into terrorists. Floyd, in the course of carrying out her duties as an FBI special agent, had, back in 1992, placed a mole inside the Blind Sheikh’s terrorist cell. The mole, a former Egyptian army officer name Ehud Salem, had, meanwhile, been instructed by FBI management to help the terrorists in the Blind Sheikh’s cell build a bomb. Ostensibly, this was part of a sting operation, and the FBI was to arrest the Blind Sheikh and the other terrorists before they could use the bomb. But when the mole and agent Nancy Floyd informed FBI management that the terrorists were preparing to explode the bomb under the World Trade Center, FBI management initiated a full-scale investigation into…agent Floyd.

More specifically, FBI management launched a so-called “Office of Professional Responsibility Investigation” into agent Floyd. Management did not inform Floyd what rules of professional responsibility she had violated, but the investigation effectively brought Floyd’s career as an earnest FBI agent to a grinding halt. FBI management also promptly fired the mole. Meanwhile, FBI management shut down all other investigations into the Blind Sheikh (co-founder of Faisal Islamic Finance, Bank al Taqwa, BMI, Inc., and other prominent financial institutions) and his terrorist cell.

A few weeks later, and on the day predicted by the mole, the conspiracy to bomb the World Trade Center was successfully carried out. Six people were killed, and more than 1,000 were injured. In addition, the heart of the New York financial district was paralyzed for a week, the stock market nosedived, and massive damage was inflicted on the U.S. economy. Of course, during the years immediately prior to the 1993 bombing of the WTC, the BCCI enterprise had inflicted massive damage on the U.S. economy, and there is more we need to know about the WTC bombing.

There is also more we need to learn about other strange occurrences in the weeks after the director of the FBI described Operation Green Quest as the largest law enforcement effort in history because, as we shall see, this is directly pertinent to the present and deteriorating state of the global financial system.

* * * * * * * *

After the 1993 bombing of the WTC was carried out, earnest FBI agents secretly monitored a meeting that was held at a Marriot Hotel in Philadelphia. All of the people at this meeting were leaders of the Muslim Brotherhood, and many of them were prominent bankers. One person at the meeting, Omar Ahmad, was, at the time, providing housing to the Blind Sheikh. The man who was expected to chair the meeting, meanwhile, was Mousa Abu Marzook.

As we know, Marzook was also the co-founder of several financial institutions, including BMI Inc. and Bank al Taqwa, and he founded Infocom, the outfit that hosted Elgindy’s private internet chat site for short sellers. In addition, Marzook was a leader of the Muslim Brotherhood, political chief of Hamas, and a key figure in the Islamist International, the chairman of which was, of course, Osama bin Laden.

As it happened, Marzook did not appear at the meeting in Philadelphia, but he was represented at the meeting by his deputy, Mohammad Saleh, and phone records showed that Saleh had been in regular contact with the terrorists who had parked the bomb under the World Trade Center. Naturally, the earnest FBI agents suspected Saleh and others at the meeting in Philadelphia of having been involved in the 1993 bombing of the World Trade Center. They also suspected Marzook.

As the earnest FBI agents discovered, one purpose of the meeting at the Marriot in Philadelphia was to discuss ways in which to keep the terrorists who had perpetrated the bombing out of prison. Another purpose of the meeting was to discuss additional measures that could be undertaken to sabotage the United States. Abu Baker, one of the Muslim Brotherhood (and Hamas) operatives in attendance summarized the strategy as follows:  “War is deception…Deceive, camouflage…Deceive your enemy.”

Another purpose of the meeting of the 1993 meeting at the Marriot Hotel in Philadelphia was to discuss ways in which to undermine the Oslo Peace Accords that had been signed that year by the Israeli government and the Palestinian Liberation Organization (PLO). As we know from earlier chapters of this series, Israeli politicians were also hoping to undermine the Oslo Peace Accords because they, the Israelis, believed that the Accords granted too much legitimacy to the PLO. So, at the time, the Israeli government was sponsoring Marzook and other Hamas leaders reckoning (correctly as it would turn out) that Hamas would suck support away from the PLO.

For the same reasons, the Israelis were sponsoring a PLO splinter group called Fatah-Revolutionary Guard (or sometimes Black September), the leader  of which was a notorious terrorist named Abu Nidal, who was an avowed enemy of PLO leader Yassir Arafat. Abu Nidal and the leaders of other PLO splinter groups, recall, were formerly involved with the BCCI enterprise and aside from being terrorists, they were sophisticated financial operators and criminals whose operations were closely intertwined with  the organized crime (and terrorism) syndicate operated by prominent oligarch (and global terrorist) Monzer al Kassar, formerly a key figure in the larger BCCI enterprise. In addition, as of 1993, Abu Nidal and the other leaders of the PLO splinter groups were, like Marzook and other leaders of Hamas, key figures in the Islamist International, the chairman of which was, of course, Osama bin Laden.

After the September 11 attacks in 2001, anonymous U.S. officials fed to the media a story that Abu Nidal was running an Al Qaeda terrorist training camp in Iraq. This story maintained further that Abu Nidal was running the terrorist training camp in cahoots with Saddam Hussein, then leader of Iraq, and that Abu Nidal had personally overseen the training of Mohammad Atta, leader of the terrorist cell that  had allegedly carried out the September 11 attack. According to U.S. officials, Atta had been the pilot of the first airplane the crashed into the World Trade Center.

That story could not possibly have been true because at the time (see earlier chapters of this series) Abu Nidal was employed as an agent of not just the Israelis, but also the U.S. government, as was later reported by Robert Fisk of The Independent, a prominent newspaper in Britain, and by Janes, a prominent publication that covers national security issues. However, it was true that Abu Nidal had previously dispatched one of his deputies, Ahmed Ajaj, to help carry out the 1993 bombing of the World Trade Center.

Ajaj flew to the United States with a Muslim Brotherhood terrorist named Ramzi Yousef.  Upon landing at JFK airport in New York, customs officials noticed that Ajaj’s passport was blatantly fake (his photograph was peeling off of the passport, and there was a photograph of another person easily visible below it). Customs officials also discovered that Ajaj had in his possession a terrorist training  manual and instructions on how to build a bomb. Ajaj was taken into custody and charged with illegally entering the country, but for some reason his traveling companion, Ramzi Yousef, was allowed to enter the country, and soon after, he was among the perpetrators of the WTC bombing.

Presently, U.S. officials describe Yousef as the “mastermind” of the 1993 World Trade Center bombing, and he is serving a life sentence at the SuperMax prison in Colorado. However, after carrying out the WTC bombing, Yousef was able easily to leave the country, and he operated for several years under the auspices of Mercy International and the IIRO, both of which were co-founded by Osama bin Laden and (for reasons that are not clear) funded by the U.S. government. That’s the same U.S. government, of course, that had (because, we must assume, the U.S. government is incompetent, supplied Yousef and his terrorist associates with the bomb that they had exploded under the World Trade Center).

Yousef’s traveling companion, Ajaj, meanwhile, was released from detention and it remains unclear what came of him.

In 1993, Robert Friedman, one of the nation’s best journalists, reported in the Village Voice that Ajaj had been employed as an agent of the Israeli government. Meanwhile, the FBI arrested a man named Mohammed Salameh, who had rented the Ryder truck that was used to park the bomb under the World Trade Center, and which, along with the bomb, had exploded. Salameh (who played just a bit part in the terrorist attack) was arrested when he returned to Ryder to report that the truck was stolen and to ask Ryder to return his $400 deposit. The International Herald Tribune reported that the telephone number and apartment address listed on the rental agreement for the truck belonged to man named Josie Hadas, who had been identified as an agent of the Mossad, Israel’s intelligence agency.

None of this is evidence that Israel had a hand in the 1993 WTC bombing, but it is notable that none of the people whom earnest FBI agents regarded as the masterminds of the WTC bombing were immediately arrested. Yousef was arrested only three years later. More specifically, he was arrested at a Mercy International guest house in Pakistan, and when he was arrested, his uncle, Khalid Sheikh Mohammed, who was staying in the same guest house, emerged from his room and gave a speech protesting the arrest. Khalid also gave an interview to a Time magazine reporter who was on hand for the arrest.

However, Khalid himself was not arrested, though there was already at that time evidence (possibly  manufactured) that linked him to a conspiracy to fly airplanes into tall buildings, including the World Trade Center. In addition, Yousef was arrested not by the FBI, but by Pakistani police  working with U.S. embassy State officials who received considerable resistance from FBI management and from Pakistani intelligence. Neither Marzook nor any of the others who had attended that meeting at the Marriot Hotel in Philadelphia were ever arrested. In addition, FBI management went to great lengths to protect the Blind Sheikh from prosecution.

That the Blind Sheikh was protected was noted by Nancy Floyd (the FBI special agent who had planted the mole in the Blind Sheikh’s terrorist cell), and even after the 1993 WTC bombing had been successfully carried out, FBI management still refused to arrest the Blind Sheikh. As a result, Floyd and the mole threatened to go to the press with their story that they had provided FBI management advance warning about the Blind Sheik’s involvement in the conspiracy to bomb the WTC.

FBI management responded to this threat in two ways. First, FBI management paid the mole a lump sum of $1 million cash. And second, FBI management leaked to the press an outlandish story alleging that Nancy Floyd, the earnest FBI agent, had been having an illicit sexual affair with a man named Ehud Salem (who was, of course, the mole whom the FBI had just paid $1 million, probably as hush money, but in the story that FBI management told the media, Salem was a terrorist). Amazingly (or unsurprisingly), major U.S. news organizations, including the New York Post, published the salacious story about the seedy FBI agent, Floyd, who had been having a salacious affair with Salem.

Fortunately, the mole had tape recorded the conversations during which he had explicitly warned FBI management of the conspiracy to bomb the WTC. It was also apparent from these taped conversations that FBI management not only knew about the conspiracy, but had instructed Salem to help build the bomb for the terrorists who were plotting to blow up the WTC. And despite the $1 million he had received in hush money, the mole threatened to deliver the tapes to the press. At this point, FBI management paid the mole still more cash, and once again deployed him to investigate the Blind Sheikh.

By now, though, FBI management had already insisted that the Blind Sheikh was not involved in the WTC bombing, and at the same time, FBI management knew that it would be necessary to arrest the Blind Sheikh to prevent the mole from delivering his tapes to the media. So FBI management hatched a plan, instructing the mole to volunteer to the Blind Sheikh his help in carrying out a new plot (a plot hatched by FBI management) to blow up multiple New York landmarks, including FBI headquarters. The mole took the plan to the Blind Sheikh, and the Blind Sheikh said he had no interest.

Nonetheless, FBI management announced to the press that the Blind Sheikh had now been linked to a new terrorist plot—namely, the one (hatched by FBI management) to bomb multiple New York landmarks and FBI headquarters. FBI management gave this new terrorist plot a catchy name—“The Day of Terror”—and meanwhile assured the media that the Blind Sheikh had not been linked to the bombing of the World Trade Center. For the time being, the mole kept his tapes to himself, and the major U.S. news organizations reported extensively on FBI management’s heroics in not only apprehending all of the people linked to the World Trade Center, but also foiling the even worse “Day of Terror” plot.

But, of course, the “Day of Terror” plot was not a real plot, and most of the terrorists and bankers linked to the 1993 WTC bombing had not been arrested.

The Blind Sheikh, meanwhile, had been arrested only because FBI management was worried that the mole would go public with his tapes. As it turned out the mole went public with the tapes anyway, and the Blind Sheikh was eventually charged for his role in the World Trade Center bombing. Later, U.S. officials acknowledged that the Blind Sheikh was, as of 1993, on the payroll of the U.S. government, though U.S. officials say the Blind Sheikh was on the payroll only because he had helped America fight the Soviets in Afghanistan during the 1980s.  Meanwhile, Marzook and other terrorists linked to the 1993 WTC bombing continued to live openly in the United States.

In 1996, the FBI briefly arrested Marzook at his home in Texas (location also of Infocom, host of Elgindy’s private internet chat site for short sellers), but Marzook was immediately released at the request of the Israeli government, which issued a statement saying that Marzook was “important to the peace process.”  The truth, of course, was that Marzook and other Hamas leaders in the United States had undertaken a major initiative to sabotage the peace process, and more specifically to undermine the 1993 Oslo Peace Accords that the Israeli government had signed with the PLO.

Presently, Marzook resides in Qatar, where he has the full protection of the Qatari ruling family (one of Washington’s closest allies). That’s the same ruling family that formerly employed Ramzi Yousef’s uncle, Khalid Sheikh Mohammed, now said to be the “mastermind” of the September 11 conspiracy. Marzook is also helping direct the  “Arab Spring” rebellion in Syria. The “Arab Spring” rebels in Syria, of course, have ties to not only Hamas (i.e. the Muslim Brotherhood) but also Al Qaeda (i.e. the Muslim Brotherhood) and other jihadi outfits (i.e. the Muslim Brotherhood), but they are now regarded as “freedom fighters,” sponsored by Washington and its totalitarian allies (e.g. Qatar, Saudi Arabia, the UAE, all of them the leading state sponsors of terrorism).

* * * * * * * * *

Back in 2002, Marzook was a key target of Operation Green Quest, partly because he had co-founded BMI Inc. and Bank al Taqwa, both of which were considered to be key components of the SAAR Network. The other co-founders of those financial institutions, including Mr. Alamoudi and Yasin al Qadi, were, of course, also key targets of Operation Green Quest. Marzook (though he was most famous as political chief of Hamas) had, recall, been among those who, along with Osama bin Laden and other key figures in the Islamist International, were (as of 2000) planning to perpetrate a “spectacular” terrorist attack inside the United States. Naturally, Marzook was therefore suspected of involvement in the September 11 conspiracy, just as he had previously been suspected of involvement in the 1993 WTC bombing.

In the course of carrying out their Operation Green Quest duties, earnest U.S. Treasury officials named not only Marzook and Yasin al Qadi, but also several other co-founders of Bank al Taqwa and its U.S. affiliate, BMI, Inc., as “Specially Designated Global Terrorists.”  Meanwhile, we know, the Treasury Department  announced that Bank al Taqwa had established “Al Qaeda’s main operating base in Europe for the movement of men, weapons, and money around the world.” In addition, Operation Green Quest investigators targeted a major financial institution called Al Aqsa Bank.

The Operation Green Quest investigators determined that Al Aqsa Bank had extensive ties to  Osama bin Laden, and the Treasury Department noted that Al Aqsa Bank was controlled by prominent bankers who were also global terrorists. Al Aqsa Bank’s most important principal was Marzook, who was, of course, a “Specially Designated Global Terrorist.”

Al Aqsa Bank had a massive presence in the United States, and as mentioned earlier, it operated in this country as a joint venture with Citibank.  Earnest Treasury officials, in the course of carrying out their Operation Green Quest duties, informed Citibank executives that they were operating a joint venture with a “Specially Designated Global Terrorist,” and Treasury officials notified Citibank that Citibank’s joint venture partner had direct ties to Osama bin Laden himself. The earnest Treasury officials even advised Citibank that Citibank might like to disband its joint venture with a bank that was operated by a “Specially Designated Global Terrorist” who was a suspect in both the 1993 WTC bombing and the September 11 conspiracy.

Citibank, however, ignored the advice.

Citibank maintained its joint venture with Al Aqsa Bank until 2011, when the bank was “busted out” (i.e. looted and destroyed) by its owners, including “Global Terrorist” Mousa Abu Marzook and others who had been linked to Osama bin Laden’s organization. This, incidentally, was the same Mousa Abu Marzook who, in his capacity as political chief of Hamas, had reacted with glee when the American financial system melted down in 2008, declaring that the economic cataclysm marked “The End of the American Empire.”  However, by that time, Marzook was no longer described as a “Global Terrorist.” He was working for the “Empire” and preparing for his new career as an “Arab Spring” freedom fighter.

Back in 2001, of course, Marzook’s company Infocom was hosting Anthony Elgindy’s private internet chat site for short sellers, and as earnest FBI agents knew, Elgindy’s short selling syndicate had been involved in a scheme that resulted in the September 18, 2001 collapse of MJK Clearing, then the largest clearing brokerage in America. A later chapter of this series will discuss this scheme in greater detail, but for now it is enough to know that the collapse of MJK Clearing necessitated the largest ever bailout by the Securities Investors Protection Corp. and contributed mightily to the damage that had been caused to the global financial system by the September 11 terrorist attack just a  few days prior.

Others linked to the collapse of MJK Clearing (according to the SEC, which leveled small fines) were former BCCI figure Adnan Khashoggi; a notorious financial operator named Rafi Khan (the son of a Pakistani intelligence official and a principal at a brokerage called J.B. Oxford, operated by former BCCI figure Irving Kott); a man named Rami al Betrawi (formerly involved, along with BCCI and Khashoggi in the Iran-Contra affair); Carl Icahn (who rose to prominence with finance from Michael Milken); a woman named Valerie Red Horse (formerly Milken’s office manager at Drexel Burnham Lambert); and multiple others with ties to organized crime.

* * * * * * * * *

The Treasury Department no longer describes Marzook as a “Global Terrorist,” and all of the other people formerly identified as “Specially Designated Global Terrorists” are no longer called “Global Terrorists.” Most of them continue to have extensive business in the United States. Same goes for the “Golden Chain” billionaires and all of the other people who were targeted by Operation Green Quest, and who were (as of 2002) regarded as key figures in the SAAR Network. Most of those people were (and are) sophisticated financial operators, many of them are among history’s most destructive financial criminals (previously involved with the BCCI enterprise), and most of them not only continue to have involvement in the U.S. markets, but also presently boast partnership with some of Wall Street’s leading brokerages and investment houses.

This is owing to some other strange events that occurred in 2002, one year after the director of the FBI pronounced Operation Green Quest to be the largest law enforcement effort ever undertaken by any nation, or combination of nations, in the entire history of the world—a law enforcement effort whose only purpose was to prosecute terrorists and the people who sponsored them.

One of the other strange things that occurred in 2002 was that a United States congressional committee issued a report outlining the results of its investigation into Osama bin Laden’s terrorist organization. This investigation had, of course, been assisted by earnest U.S. government investigators tasked to Operation Green Quest, and so, of course, the report contained 28 pages containing the names of all the billionaires who were key figures in the SAAR Network, members of the “Golden Chain,” and “Specially Designated Global Terrorists.” However, those 28 pages were completely blacked out—censored, so that nobody could read them.

Fortunately, earnest Operation Green Quest investigators subsequently went public with the names of the billionaires, and so we are able now to report their names, though their names (see chapter 2 of this series for a fuller list of billionaires with ties to Osama bin Laden) have never been reported in connection with Osama bin Laden by The New York Times, which seems happy enough to censor itself, and we cannot hope that Operation Green Quest investigators will capture any of the sophisticated financial operators who were the key targets of Operation Green Quest. We cannot hope that they will be captured owing to some other strange events that occurred in 2002, not long after the FBI director described Operation Green Quest as the largest law enforcement effort in the history of the world.

One strange occurrence in 2002 was the decision of the FBI director and other top officials to call an end to Operation Green Quest.

That is to say, Operation Green Quest lasted for a total of one year before it was completely dismantled. It was completely shut down, and as a result of Operation Green Quest (the largest law enforcement effort ever undertaken, according to the director of the FBI, who stressed that the sole objective of this massive law enforcement effort was to prosecute terrorists and their sponsors) the number of terrorists and major terrorist financiers who were, in fact, prosecuted came to a grand total of…ZERO.

Since then, there have been no other major “Operations” aimed at prosecuting terrorists and their bankers (or bankers who are also terrorists).

* * * * * * * *

Soon after shutting down Operation Green Quest, the director of the FBI appeared as the guest of honor at the 2002 annual convention of an outfit called the American Muslim Council. In the speech that he gave at this annual convention, the FBI director described the American Muslim Council as “the most mainstream Muslim organization in America.” Which was a surprising way to describe an outfit founded by the terrorist organization that had (according to the director of the FBI) recently massacred close to 3,000 mainstream Americans by crashing airplanes into the World Trade Center, the Pentagon, and a field in rural Pennsylvania.

Indeed, earnest FBI agents had known about the American Muslim Council’s ties to Osama bin Laden since at least 1993, when they received information from an informant that Osama bin Laden was using the American Muslim Council to funnel money to the Blind Sheikh (the terrorist and banker who had co-founded numerous financial institutions, including BCCI’s most important affiliate). As of 2002, the director of the FBI was also aware that the American Muslim Council had been an important target of the aborted Operation Green Quest, partly because the founder of the American Muslim Council was Mr. Alamoudi (who was a top operative in Osama bin Laden’s terrorist organization).

In addition, the director of the FBI was aware that the American Muslim Council’s top officials included former White House official Khalid Elgindy (brother of Anthony Elgindy, the short seller who had advance knowledge of the September 11 conspiracy) and a terrorist named Sami al Arian, who had been settled in the United States by the Elgindy family. At the time in 2002 when the FBI director was Sami al Arian’s guest of honor at the 2002 annual convention of the American Muslim Council, it was widely known that Sami al Arian and a man named  Ramadan Shalleh (both Shalleh and Sami al Arian worked for a time as professors at the University of South Florida) were the top leaders of a terrorist organization called Palestinian Islamic Jihad, which was a key component of the Islamist International, the chairman of which was, of course, Osama bin Laden.

In 2000, the director of the House Task Force on Terrorism had reported (publicly) that Palestinian Islamic Jihad was a key component of the Islamist International, the chairman of which was, of course, Osama bin Laden. At that time in 2000 (and in the years that followed), Sami al Arian (widely known to  be co-leader of Palestinian Islamic Jihad) was highly regarded in Washington and held regular meetings with top U.S. officials, including multiple FBI directors. Meanwhile, according to the director of the House Task Force on Terrorism, Ramadan Shalleh (the other co-leader of Palestinian Islamic Jihad) was (in 2000) among the terrorists who were, along with Osama bin Laden and other key figures in the Islamist International, including Marzook (host of Elgindy’s private internet chat site for short sellers) planning to perpetrate a “spectacular” terrorist attack inside the United States.

After such a terrorist attack occurred on September 11, 2001, earnest U.S. government investigators learned that Sami al Arian (settled in the United States by the Elgindy family) had incorporated a financial firm called Baraka Exchange, which had funded some of the terrorist-hijackers who had (according to the director of the FBI) carried out the September 11 attack. In addition, Sami al Arian was involved with numerous other SAAR Network entities, and he had been a principal target of Operation Green Quest. However, Operation Green Quest had, of course, been shuttered with no prosecutions, and Sami al Arian was never charged with any crime related to the September 11 attacks or  ties to “Al Qaeda.” To the contrary, he was invited to the White House to meet with the president.

Some years later, after a former DOJ prosecutor named John Loftus had filed a lawsuit against the U.S. government, accusing U.S. officials of thwarting investigations into Sami al Arian, the DOJ did indict Sami al Arian for funding a terrorist attack in Palestine, but he spent only a few months in prison, and he now resides in a mansion located in the suburbs of Washington, D.C. Meanwhile, Judicial Watch, the public watchdog group, has filed a lawsuit seeking information on the continuing and apparently warm relationships between the director of the FBI (still Robert Mueller) and multiple people (including not only Sami al Arian, but also some of those who attended that meeting at a Marriot Hotel way back in 1993) with ties to terrorism.

In 2002, when the FBI director was the guest of honor of not only Sami al Arian, but also Mr. Alamoudi, at the 2002 annual convention of the American Muslim Council (“the most mainstream Muslim organization in America”), the FBI director was well aware that not only Sami al Arian, but also Mr. Alamoudi (founder of the American Muslim Council) were key figures in Osama bin Laden’s organization, and the FBI director knew that both Mr. Alamoudi and the American Muslim Council had been among the most important targets of Operation Green Quest (the largest law enforcement effort ever aborted without any prosecutions). In addition, the FBI director knew that Mr. Alamoudi had founded the American Muslim Council in partnership with Osama bin Laden.

Court documents also show that the FBI director knew that the vehicle which Mr. Alamoudi used to found the American Muslim Council was an important financial firm called SEDCO, which operated several  joint venture businesses in partnership with Osama bin Laden (a famous terrorist and fringe fanatic who was also a prominent banker, oligarch, and co-founder of “the most mainstream Muslim organization in America”). Perhaps more important, the FBI director knew that SEDCO was principally controlled by Sheikh Mahfouz, formerly the largest shareholder (and executive director) of BCCI.

Sheikh Mahfouz, of course, was one of history’s most destructive financial criminals, and he was Osama bin Laden’s most important business partner. In addition, we know, Sheikh Mahfouz was a prominent oligarch and an important business partner of Washington insiders. Indeed, he had captured many of America’s leading politicians, including every politician who served as president of the U.S.A. between the year of 1972, when BCCI was founded, and the year 2009, when Sheikh Mahfouz passed away.

* * * * * * * *

Which brings us back to The New York Times obituary commemorating the life of Sheikh Mahfouz. In that otherwise flattering obituary, the Times was obliged to report that Sheikh Mahfouz had faced a “barrage of accusations” that he had ties to terrorist organizations These accusations did not, however, conform to the party line that  Sheikh Mahfouz was nothing more than a prominent banker and a legitimate partner of “Washington insiders,” so the Times, of course, was quick to assure its readers that the accusations of Sheikh Mahfouz’s ties to terrorism had no merit whosoever.

The Times also noted with approval that Sheikh Mahfouz had filed lawsuits against journalists who had written of Sheikh Mahfouz’s ties to terrorism. The New York Times  gloated with further approval that Sheikh Mahfouz had filed his lawsuits in London to take “advantage of Britain’s pro-plaintiff libel laws.”  Those libel laws, for those who do not know, are the most repressive libel laws anywhere in the Western world. They not only make a mockery of the notion that Britain has a free press, but they amount to a regime of censorship that makes it difficult for British journalists to report stories that powerful people or the British government deem to be harmful to their interests. And, of course, the British government (like the regime in Washington) is not interested in exposing the ties between prominent billionaires and terrorism, because such billionaires also have ties to the Anglo-American establishment.

Some of the journalists whom Sheikh Mahfouz attacked with libel lawsuits, however, were not British—they were American citizens. Indeed, there has developed a disturbing trend (known to advocates for press freedoms as “libel tourism”) that sees powerful people (a surprising number of them actually former BCCI figures) filing lawsuits against American journalists in the British courts, which almost always rule in favor of the plaintiffs.

As for The New York Times—well, that newspaper is not exactly what the founding fathers had in mind when they made freedom of the press a cornerstone of the new republic. There are some excellent and honest journalists at The New York Times, but we might be justified in asking whether The Times as an institution considers it to be its mission to prevent the voting public from being fully educated. This, after all, is the essential meaning of the famous slogan—“All the News That’s Fit to Print”—with its implication that there cannot possibly be any other news that is fit to print, and that there must be no diversity of opinion, nor debate about the facts. It might be that there really is just one Truth, and one Truth only, but are we to believe that the one and only Truth is the party line of The New York Times?

The New York Times believes that is so, and a large segment of the population believes it, too. It is the segment of the population that is preternaturally inclined to trust authority—even to revere authority–and it is the segment of the population that is ever prepared to accept authoritative diktats as to what constitutes right-belief. It is the segment of the population, like so many of history’s tragic populations, that marches in lockstep with the party line–and in present day America, it is this segment of the population that defines polite society, while everyone else has been relegated to the fringes.

As a result, we now live in a nation where one must be careful with his words, for to deviate in any way from the party line is to be cast aside, scorned and ridiculed. Indeed, one must say nothing at all unless it has been approved by The New York Times.

If you doubt that this is true—if you doubt that it has a profound effect on our nation and our democracy—try this simple experiment: at your next dinner party, introduce an idea, a commentary, a story or a new set of facts. If what you have said did not come from The Times, or has been disputed by The Times, witness the reaction of your friends and interlocutors—your fellow citizens.

Try, for example, to discuss with a group of ten people the story of BCCI and Sheikh Mahfouz. Try to challenge the final word on Sheikh Mahfouz, as it was published in 2009 by The New York Times—which noted with approval bordering on glee that Sheikh Mahfouz had (as a result of one of his London lawsuits) won a default judgment ordering one American writer, a woman named Rachel Ehrenfeld, to apologize for linking Sheikh Mahfouz to terrorism. The Times did not mention this, but Rachel Ehrenfeld is no slouch. She is the director of the Economic Warfare Institute. She has also worked as a visiting scholar at the Columbia University Institute of War and Peace Studies; a research scholar at New York University School of Law; and as a fellow at John’s Hopkins School of Advanced International Studies (SAIS).

In addition, Ehrenfeld (author of the book, “Funding Evil,” which provoked the lawsuit) is one of the world’s reigning experts on billionaires who have ties to terrorism, and who are themselves terrorists—financial terrorists who have, with much success (and in partnership with the American elite) waged economic warfare against the United States and other nations. But that is not a subject for polite society. In polite society, one must toe the party line, which is that all terrorists are “fringe” fanatics who occupy their every moment conceiving new and inventive ways to hide bombs in their underpants, desiring nothing more than to blow themselves to Kingdom Come and its harem of vestal virgins.

According to the party line, there are no billionaire terrorists. In polite society, all billionaires are, by definition, themselves members of polite society, deserving of our respect and admiration. Anyone who says otherwise must be expelled from polite society, and if the dissident has credentials that threaten to lend her credibility, she must be excoriated or at least subtly discredited by The New York Times.

So it was with Rachel Ehrenfeld, whom Sheikh Mahfouz  sued with the help of London’s oppressive libel laws. The New York Times reported: “Mrs. Ehrenfeld has called his [Sheikh Mahfouz’s] legal actions ‘financial jihad.’ But Sheikh Mahfouz’s criticisms were sometimes irrefutable. He was widely referred to as the brother-in-law of Osama bin Laden, which he was not. Sheikh Mahfouz did acknowledge contributing $270,000 to Mr. bin Laden’s forces when they were fighting the Soviets in Afghanistan. At the time, the United States also supported the insurgents there.”

And that was the end of the story, so far as the Times was concerned. Clearly, we are left to conclude that Sheikh Mahfouz was innocent of all charges linking him to terrorism.

We are also left to conclude that people, including Ehrenfeld, who have linked Sheikh Mahfouz to terrorism are a little bit nutty. After all, these people, including Ehrenfeld (or so it was suggested by The New York Times) went so far as to report the outlandish falsehood that Sheikh Mahfouz was Osama bin Laden’s brother-in-law. In fact, Ehrenfeld never reported any such thing. It was the director of the CIA, then George Tenet, who first stated that Sheikh Mahfouz was Osama bin Laden’s brother-in-law, at which point official U.S. government spokesmen quickly issued a “correction,” saying that it had not yet been confirmed that Sheikh Mahfouz had married off his sister to Osama bin Laden.

The spokesmen did not explicitly deny that the CIA director’s information was correct, and since then, the official spokesmen have not been forthcoming with confirmation one way or another, so we do not know the truth of the matter. Either way, the former CIA director’s supposed error served the interests of Sheikh Mahfouz and his friends in Washington, as they and cooperative media outlets such as The New York Times seized upon this one supposed falsehood, suggesting that since this one fact has ostensibly been proven to be false, it must necessarily be the case that all of the other facts (see above) linking Sheikh Mahfouz to Osama bin Laden are equally false. This, of course, is twisted logic, made all the more twisted by the fact that the Times failed to address all of the other facts (see above) linking to Sheikh Mahfouz to terrorism.

We can see the twisted logic because we are examining it with care, but most readers of The New York Times conduct no such examination. And make no mistake: the twisted logic of The New York Times is not evidence merely of faulty thinking or lazy reporting. The New York Times was, without doubt, aware of the other facts linking Sheikh Mahfouz to terrorism. The omission of these facts—and the twisted logic suggesting that one supposed falsehood justifies the omission of all the other facts—was not accidental. It was twisted logic by design—and such twisted logic works as it is intended. Indeed, twisted logic is the most effective all propaganda. It is the essence of the twisted dystopia about which we have been warned by Orwell, Huxley, H.G. Wells, and so many others.

Consider further that while the New York Times reported that Sheikh Mahfouz had won (in a British kangaroo court) a “default” judgment ordering Ehrenfeld to apologize for linking Sheikh Mahfouz to terrorism, the Times failed to report that Ehrenfeld had made no such apology and indeed Ehrenfeld had refused to acknowledge the jurisdiction of the British court over her case, which is why the judgment was a “default” judgment. In addition, though there was not a word about this in The New York Times, Ehrenfeld had preemptively countersued Sheikh Mahfouz in New York to obtain a declaration that the British judgment would not be enforced in the United States.

Ehrenfeld also maintained that her book was not defamatory under United States defamation law. The New York courts ruled that they lacked jurisdiction over Sheikh Mahfouz, but immediately thereafter, the New York State legislature unanimously passed the Libel Terrorism Protection Act, and the legislature even named the new Act after Rachel Ehrenfeld herself.

It is called “Rachel’s Law.”

In 2008, when Rachel’s Law was enacted, New York Governor David Paterson stated that Rachel’s Law “offers New Yorkers greater protection against libel judgments in countries whose laws are inconsistent with the freedom of speech granted by the United States constitution.” In other words, this was a victory for both Ehrenfeld and free speech, but The New York Times (supposed guardian of our freedoms and “All The News That’s Fit to Print”) failed to mention a word about it in its story gloating that Ehrenfeld had been asked to apologize for linking Sheikh Mahfouz to terrorism.

Meanwhile, billionaires with ties to terrorist organizations continue to this day to wage a “Financial Jihad” in partnership with some of Wall Street’s most notorious (or “prominent,” in the vernacular of The New York Times) brokerages and investment houses–and with the apparent approval of officials in Washington, who have shown zero inclination to stop them. None of which, of course, is regarded by The New York Times as news that is “Fit to Print,” but there is, nonetheless, hope for the republic, for at least some among the citizenry have come to know that if it’s fit to print–then it probably isn’t true.

To be continued…Click here to read Chapter 7

Mark Mitchell is a journalist who spent most of his career working as a correspondent for mainstream media publications before joining DeepCapture.com. He is the author of the book entitled “The Dendreon Effect: How Felons, Con-Men and Wall Street Insiders Manipulate High-Tech Stocks”.

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Jim Cramer’s TheStreet.com Upgrades OSTK to Buy: ‘The Hun is always either at your throat or at your feet’ – Winston Churchill

On May 31 TheStreet.com (which at one point had notorious Wall Street villains Jim Cramer and David Rocker as shareholders #1 and #2, and has repeatedly been used by Jim Cramer in the pursuit of the kinds of illegal market practices for which he so proudly took credit in this video), published an “upgrade”: Overstock.com Inc. Stock Upgraded (OSTK). Given my history with Jim Cramer, including unsuccessfully attempting to draw a libel suit from him some years ago by writing ““Jim Cramer is a Complicated Man and by calling Cramer a “criminal” in an Overstock.com marketing email to close to 20 million people , the compliment is something of a surprise, and reminiscent of the full Churchill line, “By its sudden collapse, … the proud German army has once again proved the truth of the saying, ‘The Hun is always either at your throat or at your feet.’”

Patrick

N.B. Generally I divorce references to my day job at Overstock from my writing on DeepCapture. I mention Overstock here only when it is unavoidable, as it is here. Nothing in this brief post is meant to suggest endorsement of Overstock or TheStreet.com (which I continue to maintain is one node in a criminal enterprise that has emerged on Wall Street in the last 15 years, abetted by an SEC which has bravely re-branded itself as Wall Street’s Towel Boy), nor make any comment about the stock price.

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The Global Bust-Out Series (Chapter 5): Monzer al-Kassar, Model Citizen

The Global Bust-Out Series (Chapter 5): Monzer al-Kassar, Model Citizen

This is Chapter 5 of a multi-chapter series. On your right is a Table of Contents to all chapters so far published.

* * * * * * * * *

In this chapter of the Global Bust-Out Series, we learn more about the Bank of Credit and Commerce and International (BCCI) and its business partners (the “larger BCCI enterprise”). Although this might seem like ancient history, it is history that we must not forget because the people who were involved with the BCCI enterprise did not simply disappear when BCCI collapsed in 1991. To the contrary, most of them remained in business and only one BCCI figure (Abbas Gokal) did any jail time. This despite the fact that Manhattan District Attorney Robert Morgenthau had described BCCI as “the largest banking fraud in world financial history.”

Recall, too, that the larger BCCI enterprise did more than operate “the largest banking fraud in world financial history.” It also deployed a variety of schemes to “bust-out” publicly listed companies, some of them among the largest savings and loan banks in the United States. This contributed to the savings and loan crisis that began in the late 1980s, and which ultimately cost American tax-payers upwards of $1 trillion in bail-outs—a portent of bigger and better things to come.

The larger BCCI enterprise “busted out” (i.e. looted and destroyed) other national economies as well, and when a few BCCI principals were brought to trial (they were sentenced to pay nothing more than fines that were fraction of what they had looted), the sentencing judge correctly remarked that the BCCI enterprise had single-handedly “shattered the integrity of the global financial system.”  They had also shattered the integrity of Washington, where officials went to lengths to protect them from prosecution.

Because the BCCI enterprise was never seriously prosecuted (or exposed in the media), the people who had been involved with BCCI and the larger BCCI enterprise continued during all the years that followed not only to remain in business, but also to operate an almost precisely similar enterprise, the only difference being that the enterprise came to include some new and younger players, while people involved with the enterprise innovated new and more destructive financial schemes. More specifically, they innovated new ways to “bust-out” publicly listed companies and national economies.

Indeed, as we will see, they contributed to the great meltdown of 2008, and they are presently threatening to deliver a repeat performance.

It is no overstatement to say that miscreants who were formerly involved with BCCI and the larger BCCI enterprise presently pose the single biggest threat to the stability of the global financial system and our economic well-being.  More than that, they pose a serious threat to the future of our democracy and to political stability in many other nations as well.  This is, in other words, the history that accounts for our present predicament, and it is the history that has (already to the great detriment of our democracy) been covered up by officials in Washington, and ignored by the major U.S. news organizations (some of them owned by people previously linked to the BCCI enterprise).

* * * * * * * * *

The BCCI enterprise, we know, had extensive business with a great many of the most prominent fixtures of the American establishment. That is to say, some of the world’s most destructive financial criminals (i.e. people formerly involved with BCCI and the larger BCCI enterprise) have had extensive business with not only some of the leading lights on Wall Street, but also with numerous politicians and officials in Washington, including nearly every U.S. politician who has ever so much as considered running for president, every politician who has ever served as president, and multiple people who have held cabinet-level positions in Washington.

In earlier chapters of this series, we discussed relationships between the BCCI enterprise and two sitting presidents, Richard Nixon and Jimmy Carter. As has been well-documented elsewhere, the BCCI enterprise also had extensive dealings (the Iran-Contra affair being only one example) with the administration of President Ronald Reagan, and his vice president (later President) George Bush, Sr.

Meanwhile, in the 1980s, various BCCI figures had business with George Bush, Jr., who would, of course, later serve as president. For example, a businessman named James Bath fronted investments that a Saudi sheikh and billionaire named Khalid bin Mahfouz made in an oil company called Harken Energy, which was then controlled by George Bush, Jr. Sheikh Mahfouz was the largest shareholder in BCCI, and he served as executive director of the bank throughout the 1980s. In 1985, Sheikh Mahfouz also purchased (at a premium to the market price) the Texas Commerce Bank Tower, which was then Houston’s tallest skyscraper, from James Baker, who was then President Ronald Reagan’s Secretary of the Treasury, and later Secretary of State under President George Bush, Sr.

We have already seen that key figures in the larger BCCI enterprise later played a key role in delivering the presidency to Bill Clinton. One of those BCCI figures, we know, was an American oligarch named Jackson Stephens. Another was a man named Michael Steinhardt, known as one of the nation’s most prominent hedge fund managers, and also known as the son of Sol “Red” Steinhardt, said by a Manhattan district attorney to be the “biggest Mafia fence in America.” It was at Steinhardt’s urging that President Clinton pardoned a criminal oligarch named Marc Rich, who had previously had extensive involvement with the BCCI enterprise, and who had been sentenced to prison for doing business (through BCCI figures) with the Iranian regime during the 1979-1980 Iran hostage crisis.

We can add to this list of captured presidents our present leader, Barrack Obama, who has faced allegations of shady dealings with a man named Nadhmi Auchi, who is widely regarded as representing the interests of Adnan Khashoggi, formerly one of the most important figures in the larger BCCI enterprise (and one of history’s most destructive financial criminals). We will return to Auchi, but it suffices to say that his business (which continues to be conducted without interference from the Obama administration) has not been good for the country. Hedge fund manager George Soros, who played a key role in delivering the presidency to Obama, also previously had dealings with the BCCI enterprise.

Therefore, it is important for us to remember that the BCCI enterprise (which had extensive links to the Muslim Brotherhood) was notable for having waged a “Financial Jihad” against Western civilization (albeit a jihad waged in partnership with some of the self-anointed leaders of Western civilization). I will remind the reader that Yossef Bondansky, who served a director of the House Task Force on Terrorism from 1988 to 2005, described the BCCI mission as follows: “providing ‘special services’ in support of worthy causes—from laundering money for terrorists, Muslim intelligence services, and mujahedeen; to clandestinely funding deals for conventional weapons, weapons of mass destruction…to shipping around and laundering huge sums embezzled by corrupt leaders.”

As we also know, the BCCI enterprise’s larger mission (i.e. “The Financial Jihad”) was: 1) to build a global financial empire that could compete with Western financial institutions; and 2) to deploy financial weapons of mass destruction to undermine the global financial system that was perceived as being dominated by the West.

Recall that numerous global terrorists (also known as prominent bankers) were directly involved with the larger BCCI enterprise, and among them were Osama bin Laden and his associate, the Blind Sheikh. Osama bin Laden, of course, was later alleged to have perpetrated the September 11 attacks on the World Trade Center and the Pentagon. The Blind Sheikh was alleged to have been involved in the 1993 bombing of the World Trade Center. In addition, we know, the Blind Sheikh (co-founder of Faisal Islamic Bank, which was the most important affiliate of BCCI during the 1980s) issued a famous fatwah suggesting that it would be a good idea for his fellow jihadis (and bankers?) to “tear down the edifices of capitalism” and to “destroy their (our) economies.”  Which, of course, the BCCI enterprise had already done.

In 1991, the same year that BCCI collapsed, we know, a Muslim Brotherhood leader named Hasan al-Turabi appointed Osama bin Laden to help lead a Muslim Brotherhood initiative to replace the BCCI enterprise with a global financial network that would exceed the BCCI enterprise in scope and destructive power. Bodansky (then director of the House Task Force on Terrorism) reported in 2000: “Turabi urgently needed an expert to salvage whatever was possible and rebuild a global financial system [to replace the BCCI enterprise]. By then Osama bin Laden was the most qualified individual in Khartoum to untangle this financial mess. In late summer 1991, Turabi approached bin Laden and asked for help.”

Osama bin Laden agreed to help—and he pursued his task with enthusiasm. By 2000, he had played a key role in helping the Muslim Brotherhood rebuild a global financial network and he had done more than merely replace the BCCI enterprise. He and other Muslim Brotherhood billionaires had built what was, without doubt, one of the greatest financial empires the world has ever known. That financial empire remains in business today—and it is not only one the most powerful financial empires on the planet, but also one the world’s leading transnational organized crime syndicates, involved in all of the activities—from narco trafficking and the smuggling of radioactive materials, to the perpetration of destructive financial crime—that characterized the BCCI enterprise of the 1980s.

In addition, the global financial network/organized crime syndicate that Osama bin Laden helped build, like the BCCI enterprise before it, was operated in partnership with some elements of the American establishment, and with the full connivance of officials in Washington.

* * * * * * * * *

The director of the House Task Force on Terrorism reported (in 2000) that Osama bin Laden built a global financial network in collaboration with what he referred to as “The Brotherhood Group,” a close-knit network of no less than 130 extremely wealthy financial operators in the Persian Gulf states. The director of the House Task Force on Terrorism reported further that: “The key members of the Brotherhood Group have a well-known and established financial presence in the West—sixty five of them have major companies and businesses in the United States.”

In Chapter 2 of this series, we met some of those billionaires, noting that some of them (e.g. Sheikh Mahfouz) had not only been involved with the BCCI enterprise in the 1980s, but had been among the founding fathers of Osama bin Laden’s terrorist organization. In later chapters of this series, we will learn more about the global financial network that Osama bin Laden helped build, but by way of introduction to that discussion, we should meet another former BCCI figure—a man named Monzer al-Kassar—because Monzer al-Kassar veritably epitomized both the BCCI enterprise and the global financial network that Osama bin Laden and other billionaires (including Monzer al-Kassar) built to replace the BCCI enterprise.

Monzer al-Kassar was not officially an executive of BCCI, but he brokered many of BCCI’s most important business relationships (including relationships with leading figures of the American establishment), and he played a key role in many of the initiatives (including the “Financial Jihad”) that made the BCCI enterprise so special. That is to say, Monzer al-Kassar was not only a global terrorist, but also the world’s leading narcotics kingpin, a dangerous mobster, a mercenary, a murderer, an arms dealer, an intelligence asset, a sophisticated financial operator, a billionaire several times over, and one of the world’s most prominent oligarchs, famous for the lavish cocktail parties that he held for the rich and famous.

Monzer al-Kassar was, indeed, one of the most important people in the world.

Therefore, the remainder of this chapter will be devoted to Monzer al-Kassar’s long and amazing career–his immense influence over the course of world events and his many assaults on the stability of the global financial system. And we can begin by examining the contents of every single article that was published about Monzer al-Kassar by the major U.S. news organizations during the years leading up to 2008, when Monzer al-Kassar’s career came to a strange and untimely end.

* * * * * * * * *

The major U.S. news organization did not publish any articles about Monzer al-Kassar.

One exception to this rule was my favorite publication, People magazine, which published fairly regular reports about the fabulous parties—attended by Hollywood celebrities, glamorous billionaires, European royalty, Saudi princes, sheikhs and emirs, not to mention Western diplomats and some of Wall Street’s leading lights–that Monzer al-Kassar hosted at his white, Parthenon-like mansion in the Spanish resort town of Marbella. People magazine described Monzer al-Kassar as “The Prince of Marbella,” and that is how he was known to his powerful and influential friends, all whom were, no doubt, avid readers of People magazine.

Another exception to the rule was Forbes Magazine, which regularly listed Monzer al-Kassar as one of the 50 “Most Powerful” people in the world. However, the Forbes list of “Most Powerful” people didn’t include much information about what, exactly, made those people so powerful. Indeed, Forbes Magazine didn’t even provide its readers with any information about Monzer al-Kassar’s parties in Marbella, and unlike People magazine, Forbes Magazine did not inform its readers as to the purchase prices of Monzer al-Kassar’s sports cars, beautiful lady friends, and cutlery.

To be fair, Forbes Magazine is, in fact, the best mainstream business publication in the United States. It is also the only major news publication to devote space (see, for example, ground-breaking stories by Forbes reporters Nathan Vardi and Liz Moyers) to some of the most important issues (e.g. manipulative short selling and the involvement of organized crime) affecting the markets. In addition, aside from its list of “Most Powerful” people, Forbes Magazine did publish one story that at least mentioned Monzer al Kassar’s name in passing, noting that he had ties to Osama bin Laden.

Aside from that, though, the major U.S. news organizations reported nothing about Monzer al-Kassar prior to 2008, when Monzer al-Kassar’s career came to a strange and untimely end, at which point the U.S. media published a few stories about him, most of those stories being false. Not just false, but false to the extent that the major U.S. news organizations completely covered up the true (and scandalous) story of Monzer al-Kassar. Indeed, this cover-up was a conspiracy of significant proportions, or at least it was a cover-up to rival the media’s cover ups of just about every other major scandal in recent history.

That is not to say that the media has been a witting accomplice to any conspiracy. To the contrary, the American media has no wits. It is also, of course, not to say that the media has ever investigated or published any story about a conspiracy. Most major media journalists simply have no time to do anything other than take dictation from official government spokesmen and other professionals in the fields of black propaganda and disinformation. (I confess, I was once a mainstream journalist, and in that capacity, I unwittingly authored plenty of disinformation and devious party lines, though I did, at least, manage to have myself permanently ousted from that profession, thereby saving myself, were it not for so many other sins, from the eternal fires of hell).

At any rate, it is inadvisable to rely on the major U.S. news outfits for stuff like…news.

Fortunately, there are other sources of information, and there is, indeed, a vast amount of information about Monzer al-Kassar contained in the following: 1) mainstream publications of just about every civilized nation other than the United States;  2) a variety of documents that can be found in the public record; 3) some excellent American blogs (see, for example, BoilingFrogsPost.com, whose authors include former U.S. national security officials turned whistleblowers, all of whom are known to rant about the abysmal state of the American media).

In addition, many of the more salient facts concerning Monzer al-Kassar can be found in books by (among others) the following people: former U.S. Department of Justice prosecutor John Loftus, former Defense Intelligence Agency employee Lester Coleman; former Israeli intelligence official Ari Ben Menashe; former Israeli intelligence official Victor Ostrovsky; and Patrick Seale, the most eminent biographer of a terrorist named Abu Nidal, who was sponsored by Monzer al-Kassar. In addition, former Israeli intelligence official turned private investigator named Juval Aviv has revealed some important information about Monzer al-Kassar.

The best book on Monzer al-Kassar is a book written in the German language, and aptly titled “Des Pates des Terrors” (translation: “The Godfather of Terror,” which is different from “The Prince of Marbella”). This book (available on Amazon to anyone who can read German) was authored under a pseudonym by a German intelligence official who quotes extensively from the files of the German intelligence services, Interpol, and other intelligence agencies that tracked (and, in some case, employed) Monzer al-Kassar. There exists an English-language translation of this book, but it has been acquired by the U.S. government, which seems disinclined to allow the translation to be published in the United States.

In other words, so far as the English-speaking citizens of the U.S.A. are concerned, this book has not yet been burned, but it has, effectively, been banned.

We will get to the story of Monzer al-Kassar in a moment (and this might seem like an overly long prelude to that story) but it is first necessary to stress that every one of the above sources has been smeared in one way or another by official U.S. government spokesmen and major U.S. news organizations. These smears are always ad hominem—the facts themselves are never addressed. And others who have attempted to relate some of the facts have been accused of weaving outlandish conspiracy theories. But because this is such an important story, it must be stressed: all of the above sources have (independently of each other) related many of the same facts, and I myself have been able to confirm certain facts to be true.

There is, moreover, a near consensus among just about everyone who has investigated Monzer al-Kassar (including many earnest employees of the U.S. government’s national security agencies, though not the official U.S. government spokesmen) as to the broad outlines of the Monzer al-Kassar story.

The story goes like this:

Monzer al Kassar was the son of a Syrian government official and a close confidant of both Hafez al-Assad, who served as president of Syria from 1971 to 2000, and Bashar al-Assad, who replaced his father as president in 2000. As of this writing in 2013, Bashar al Assad is still president, but his army is fighting “Arab Spring” rebels who are (with the support of the U.S. government and its allies) attempting to overthrow the government of Syria. The “Arab Spring” rebels have ties to the Muslim Brotherhood and associated jihadi terrorist organizations, some of which were sponsored by the Syrian government until 2008, at which point the jihadi outfits (and Washington) turned on the Syrian government, and Monzer al Kassar’s career came to strange and untimely end—but we are getting ahead of ourselves.

In the beginning, Monzer al-Kassar and his family, in partnership with, and with the protection of the Syrian government, became involved in the heroin trade out of Syria and Lebanon. By the 1980s, Monzer al-Kassar was not only the world’s leading narcotics kingpin, but also a global terrorist and the proprietor of an organized crime syndicate that was closely intertwined with the operations of leading terrorist organizations (which is to say that the terrorists were also key figures in Monzer al-Kassar’s transnational organized crime syndicate).

Among the terrorist organizations intertwined with Monzer al-Kassar’s organized crime (and terrorism) syndicate were several that had been founded by people who had once been key figures in the Palestinian Liberation Organization (PLO), but who had split with PLO leader Yasser Arafat to found their own, more radical, terrorist outfits. These included: the Palestinian Liberation Front; the Popular Front for the Liberation of Palestine–Special Command (PLFP-SC); the Popular Front for the Liberation of Palestine–General Command (PLFP-GC); and Fatah, Revolutionary Council (also known as Black September and the Arab Revolutionary Brigades), whose leader, Abu Nidal, was the world’s most notorious terrorist before Osama bin Laden achieved notoriety in the 1990s.

Monzer al Kassar’s closest friend (going back to their childhoods together) was Abu Abbas, leader of the Palestinian Liberation Front. Meanwhile, Monzer’s brother, Ghasshan, was a top official of the PLFP-SC, and various other members of Monzer’s family were members, at various times, of the PLFP-SC and the other PLO splinter outfits (i.e. all of the above). In addition, Monzer al-Kassar, in his capacity as a Syrian intelligence asset, played an important role in directing the operations of at least one faction of Hezbollah, the world’s largest terrorist organization, based in Lebanon, with operations in numerous nations across the globe, most notably in Latin America and Africa, though Hezbollah also operated (and still does operate) quite openly in a few major U.S. cities, such as Detroit and my hometown, Chicago.

All of the leaders of these terrorist organizations, and Monzer al-Kassar himself, had close ties to the Muslim Brotherhood, and in 1991, they all became key figures in the Islamist International, the outfit that was founded that year by Muslim Brotherhood leader Hasan al-Turabi, and whose chairman, of course, was Osama bin Laden. This runs contrary to the official party line that Osama bin Laden’s organization and the Muslim Brotherhood were comprised entirely of Sunnis who could not tolerate other Muslim sects. The truth is that the Muslim Brotherhood membership includes Muslims of many different sects, and the Islamist International, which was founded by the Muslim Brotherhood, included some people who were not even Muslims. For example, the leader of the PLFP-SC, George Habash, was a Marxist and an atheist.

Some accounts suggest that Hezbollah, which is a Shiite outfit, may even have been founded as a Shiite wing of the Muslim Brotherhood, and it is certainly the case that Hezbollah was a key component of the Islamist International. In addition, Hezbollah has carried out at least one violent terrorist attack (in 1996, on a building housing U.S. troops in Saudi Arabia) on the orders of Osama bin Laden. Presently, Hezbollah claims to have sided with the Syrian government against the Muslim Brotherhood and Al Qaeda (i.e. Muslim Brotherhood) rebels in Syria, but for reasons to be discussed, there are excellent reasons to believe that Hezbollah and the rebels share a common interest in fomenting chaos in that country.

Monzer al-Kassar, meanwhile, ascribes to Marxist tenets, and he might properly be regarded as an atheist, though he was born a member of the Alawite sect. According to most accounts, Sunni Muslims regard the Alawites as heretics, which might be true, but such theological differences are largely academic. For the purposes of our discussion, it is enough to know that the heretics, atheists, Sunnis, Shiites, and other figures in the Islamist International (one of them being Monzer al-Kassar) were united behind what a famous Muslim Brotherhood document (authored upon the founding of the Islamist International in 1991) described as a “Grand Jihad in eliminating and destroying the [sic] Western civilization from within…”  Perhaps more important, they were all businessmen and criminals who understood that there was money to be made by undermining not just Western civilization, but all civilization, as that concept is universally understood by law-abiding people in every nation of the world.

As for Monzer al-Kassar, he was a key figure in the jihad, as were the other terrorists in his organized crime syndicate. In addition, of course, he played a key role, along with Osama bin Laden and other Muslim Brotherhood leaders, in building a global financial network to replace the BCCI enterprise. And one purpose of that global financial network was to launder money that Osama bin Laden, Monzer al Kassar’s organized crime syndicate, and other key figures in the Islamist International, including a jihadi warlord named Gilbuddin Hekmatyar, were making from the trafficking of heroin and other narcotics.

As the director of the House Task Force on Terrorism (in 2000) reported in 2000: “Hekmatyar was getting ready to ship drugs from Afghanistan to the West and divert profits from this drug trade to support the fledgling terrorist networks [of the Islamist International]. Another system of money laundering was required for this. Bin Laden adopted a twin-track approach [using standard money laundering techniques through major banks and brokerages]…”

During the 1980s, Hekmatyar had received the greater share of the weapons and money that the U.S. government supplied for the mujahedeen’s war against the Soviets. The official party line from Washington has it that U.S. support for Hekmatyar was a basically innocent blunder, with naïve U.S. government officials unaware that Hekmatyar was not only the most virulent and anti-American warlord in Afghanistan, but also one of the world’s leading narcotics kingpins. However, many researchers (see, for example, the work of University of California-Berkley professor Peter Dale Scott) have provided ample evidence that U.S. officials were, in the 1980s, well aware that Hekmatyar and other jihadi warlords who received support from Washington were leading narco-traffickers.

By the end of the 1980s, more than 80 percent of the world’s heroin traffic originated (and still does originate) from just a few countries, namely Afghanistan, Pakistan, Syria, and Lebanon. In addition, most of that heroin was (and still is) supplied by a relatively few people, namely the leading jihadi warlords, terrorists, and organized crime bosses in those countries. Throughout the 1980s, most of these narco-traffickers were closely involved with the BCCI enterprise. And the role of BCCI was not merely to launder money for these narco-traffickers. During the 1980s, many of those narco-traffickers (e.g. Monzer al-Kassar) were themselves key figures in the larger BCCI enterprise.

Meanwhile these same narco-traffickers, along with other key BCCI figures, formed business relationships with many of the world’s leading transnational organized crime syndicates, including the Sicilian Mafia, La Cosa Nostra, and the Columbian drug cartels, all of which were themselves closely involved with the BCCI enterprise. In addition, as of the 1980s, there existed a global network of brokerages linked to the BCCI enterprise, and many of these brokerages were operated in partnership with leading organized crime figures. Later chapters of this series will examine these brokerages in greater detail (not least because their proprietors presently operate some of the biggest brokerages in the world), but for now it is enough to know that they specialized in perpetrating so-called “pump and dump” schemes.

See Chapter 1 of this series for fuller description of pump and dump schemes, but the short of it is that the objective is to first “pump” up the stock price of a public company, and then “dump” the stock into the market while attacking the stock with manipulative short selling. Sometimes the companies are fraudulent companies to begin with. Sometimes they are legitimate companies until such time as miscreants gain a degree of control over the company and/or its stock price. Either way, the end result is the same: the target company is “busted out” (i.e. destroyed), with the miscreants making most of their money on the “dump” end of the equation.

For reasons that are discussed in Chapter 1, the “bust-outs” of public companies not only undermine the financial system (one goal of the “Financial Jihad), but they have the added advantage of being a highly effective way in which to launder money for terrorists, drug traffickers, and other organized criminals.

Therefore, it is not surprising that some terrorist organizations, jihadi warlords, drug traffickers, and organized criminals were involved with the global network of brokerages that were linked to the BCCI enterprise in the 1980s. The terrorist organizations and jihadi warlords had grown immensely wealthy from the drug trade, and, of course, they used some of this money to fund their wars and violent terrorism. However, many terrorists and warlords were also businessmen involved not only in the trafficking of drugs, but also in the full panoply of crimes that we normally associate with transnational organized crime syndicates.

In addition, many of these terrorists were sophisticated financial operators who not only laundered money through BCCI, but also were among the BCCI figures who, along with the larger BCCI enterprise, perpetrated the various crimes that ultimately “shattered the integrity of the global financial system.”

And again: one of the most important of these BCCI figures was Monzer al-Kassar.

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As already mentioned, Monzer al-Kassar was, as of the 1980s, the world’s leading narco-trafficker. In the mid-1980s, Monzer al Kassar formally merged his drug trafficking cartel (which, of course, included leading terrorist organizations) with the operations of the Ochoa family, co-founders of the Medellin cartel in Colombia. Monzer-al Kassar had, to some extent, also integrated his narco-trafficking and associated banking operations with those of other leading syndicates, including the Sicilian Mafia, the Corsican Mafia, Turkish and Israeli syndicates, the leading syndicates and jihadi warlords in Afghanistan and Pakistan, the multiple crime families collectively known as La Cosa Nostra, and others to be discussed.

All of these syndicates operated independently of each other, and all of them, to some extent, competed with each other, but they also collaborated to such an extent that it is proper to describe them as having established what amounted to a global cartel that controlled much of the world supply of heroin, coke, crack, hashish, pot, pills, and other drugs, much as the big oil companies of the early 20th century were independent businesses that competed with each other to some extent, but also collaborated to establish a cartel that effectively controlled the global supply of oil.

Meanwhile, of course, Monzer al-Kassar, being a global terrorist, was, along with others in his syndicate, linked to multiple terrorist atrocities that killed hundreds of people, including many Americans.

Some of these terrorist attacks were perpetrated to advance political agendas (i.e. in the name of jihad, Karl Marx, the destruction of Israel, socialism, the destruction Lebanon, and various other agendas, depending on the occasion), but we will see that at least some of the terrorist attacks were perpetrated for money. That is to say, terrorism was another line of business, and the terrorists in Monzer al-Kassar’s syndicate were more than happy to rent themselves out as mercenaries to the highest bidder, whatever the bidder’s politics or religion might be.

At other times they perpetrated violent acts of terrorism to create conditions that were more conducive to their other criminal enterprises, especially the trafficking of drugs out of Afghanistan and Lebanon (where the narco-trade expanded exponentially as the nation descended into chaos during the 1980s, with much of the chaos caused by Monzer al-Kassar and his terrorist associates). Meanwhile, Monzer al-Kassar and his global crime syndicate (including those terrorist organizations), along with the syndicates that cooperated with Monzer al Kassar to control the drug trade, were involved together in other lines of business, including grand theft auto, sex slavery, murder for hire, and the trafficking of liquor, cigarettes, sophisticated weaponry, radioactive materials, and components for the manufacture of nuclear bombs.

In addition, of course, Monzer al Kassar and associated organized crime syndicates were involved together in the perpetration of destructive financial crime. Not only were Monzer al-Kassar involved with the global network of brokerages linked to BCCI, but Monzer al-Kassar (often in league with associated organized crime syndicates) perpetrated everything from securities fraud and market manipulation to mortgage fraud, Ponzi schemes, and sophisticated derivatives scams. All of which is to say: Monzer al-Kassar was precisely the sort of fellow one would expect to be employed by the government of the U.S.A.

And Monzer al-Kassar was employed by the regime in Washington. Or perhaps it is more correct to say that the regime in Washington was employed by Monzer al Kassar.

In any event, officials in Washington and Monzer al Kassar’s syndicate (including some of those terrorist organizations) had a profitable business relationship, going back to at least the late 1970s, when an American official named Edwin Wilson cut a deal with Monzer al Kassar that saw Monzer supplying American weapons to the regime of Moammar Qadaffi in Libya, while Wilson and other U.S. government officials (all of whom, notably, were also operating private businesses that profited from these deals) were supplying American troops (recruited from within the ranks of the American military) to help the Qadaffi regime train the PLFP-GC, one of the terrorist organizations in Monzer al-Kassar’s syndicate.

In 1981, Wilson was indicted for supplying explosives (indeed, he supplied almost the entire existing stockpile of C-4 military explosives then available in the United States) to the Qaddafi regime, at which point the regime in Washington denied that Wilson was an employee of the U.S. government, and also denied that Wilson had been acting in any official capacity, much less at the direction of Washington. The major U.S. news organizations, taking their cues from U.S. officials, reported that Wilson was a “former” U.S. government employee who had gone rogue, and that the U.S. government had nothing to do with Wilson’s dealings with Qaddaffi, terrorists, and Monzer al-Kassar.

It is important for us to specifically identify the U.S. officials who were most closely involved in the investigation of Wilson and the party line that was fed to the media, because these same officials have been the central players in numerous other events that will feature in later sections of the story that you are now reading, and these events will pertain to our later discussion of the global financial system in its present and deteriorating condition. There are, in fact, numerous officials whom we need to discuss in this context, but for now it will suffice for the reader to remember three names: Oliver “Buck” Revell, who was the FBI’s chief of counter-terrorism; a DOJ and FBI official named Robert Mueller (who is now director of the FBI); and Lindley Devecchio, who was chief of the FBI’s organized crime task force, and who led the FBI’s investigation of Wilson.

These were the officials who reported that Wilson was a “former” U.S. government employee who had gone rogue, and that the U.S. government had nothing to do with Wilson’s dealings with Libya and Monzer al-Kassar. And when Wilson attempted to correct the record, the FBI and the DOJ (at the direction of those same three officials) went to all lengths to discredit and destroy him. As a result, Wilson was sentenced to prison in 1982, and he remained in jail for the next 22 years, all the while protesting that his activities had been conducted in his capacity as an employee of the U.S. government, and all the while filing Freedom of Information Act requests for documents that, he said, would prove that he was telling the truth.

Ultimately, Wilson obtained enough documents to convince a judge that he was, in fact, telling the truth, and in 2004, the judge ordered his release from prison. Since then, it has been established that Wilson (who died in 2012) had, in fact, been employed as an agent of the U.S. government, and that many of his dealings—including his dealings with Monzer al-Kassar and associated terrorists—had been sanctioned by officials working at the highest levels of government in Washington. It has also been established that the Department of Justice and the FBI, among other U.S. government agencies, covered up the truth regarding Edwin Wilson and his dealings with Monzer al-Kassar.

In addition, it is now more than evident that other officials of the U.S. government continued to maintain increasingly profitable business relationships with Monzer al-Kassar in all the years following Wilson’s indictment in 1981. For example, not long after Wilson was sentenced to prison, the U.S. government hired Monzer al Kassar to work with a man named Bill Buckley, who was then the chief of the CIA station in Lebanon. Buckley seems to have been an honorable man, and it is possible that he was unaware of Monzer al-Kassar’s pedigree, but one day he found himself instructed by his superiors to work with Monzer al-Kassar to devise a scheme to kidnap militia leaders who were operating in Lebanon and Syria. As it happened, though, that plan was not carried out and Buckley himself was kidnapped by terrorists.

More specifically, Buckley was kidnapped by a Hezbollah faction that took its directions from none other than Monzer al-Kassar. And soon after kidnapping Buckley, the same terrorists kidnapped many other Americans. But that did not deter Washington from continuing to work with Monzer al-Kassar. To the contrary, Monzer al Kassar became the single most important partner of the U.S. government in the many business dealings and machinations that later culminated in what is now known as the Iran-Contra scandal. That scandal was, in fact, largely covered up by the major U.S. news organizations and by top officials in Washington—including the same DOJ and FBI officials who covered up the earlier Wilson scandal. However, much of the truth can be found elsewhere in the public record. We are especially indebted to a former DOJ prosecutor named John Loftus for some of the key facts that follow, though the facts come from a variety of sources (including those named above), and the reader is encouraged to seek out the dozens of books about the Iran-Contra scandal for a fuller picture.

In any event, it is not the purpose of this story to discuss the Iran-Contra scandal at length, but the short version is that somebody hatched a plan for the U.S. government to sell (through brokers) sophisticated American weaponry to the regime in Iran, ostensibly in exchange for the Iranian regime’s agreement to secure the release of the Americans (including Bill Buckley, the former CIA chief in Lebanon) who had been taken hostage by terrorists—namely Hezbollah terrorists, all presumed to be proxies of the Iranian government. Meanwhile, U.S. officials, having sold the weapons to the regime in Iran, used some of the proceeds to illegally fund and arm the so-called “Contras,” a collection of rebel armies that were fighting to overthrow an ostensibly Marxist regime in Nicaragua.

That, anyway, is the official story as it has been related by the major U.S. news organizations, which have provided little in the way of detail, and which have left the American public with only a vague awareness that the Iran-Contra scheme involved some mild skullduggery on the part of a few otherwise patriotic American officials who desired nothing more than to secure the release of American hostages and secretly lend support to rebels who were fighting the Communist menace in Latin America. There is, however, more to the story—and it is principally a business story. It is a story about a dubious cast of characters who made a boatload of money. That is to say, it is story about (what else?)—the famous and ever-present BCCI enterprise. Indeed, the Iran-Contra scheme was one of BCCI’s most successful initiatives.

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It is difficult to discern through the haze of disinformation who, precisely, masterminded the Iran-Contra scheme, but most accounts cite the involvement of the Saudi billionaire and BCCI figure Adnan Khashoggi and an Iranian arms dealer named Manucher Gorbinafar. They were no doubt at the center of the Iran-Contra dealings, but so too was Monzer al-Kassar, and it was certainly Monzer al-Kassar who earned the greatest profits from the Iran-Contra dealings, though the larger BCCI enterprise (and multiple U.S. government officials who were also proprietors of private companies that were in business with Monzer al-Kassar and the larger BCCI enterprise) profited as well.

In addition, there is no doubt that U.S. officials regarded Monzer al-Kassar not only as their most important business partner, but also as their point man for the political machinations that were necessary for the proper effectuation of the Iran-Contra disaster.

Indeed, Monzer al-Kassar handled every end of the operation, and from every end of the operation, he earned a massive profit for himself and his partners. It was Monzer al-Kassar who sold most of the American weapons that U.S. officials supplied to the Iranian regime, and it was Monzer al-Kassar who sold most of the weapons that U.S. officials supplied to the Contras in Nicaragua. In supplying weapons to the Contras, Monzer al-Kassar also expanded his drug empire, with the Contras and associated drug cartels supplying him with ever greater quantities of cocaine, and the coke smuggled into the United States on the same airplanes that were transporting weapons to the Contras in Latin America. The planes would fly into Latin America with weapons, and return to the U.S. loaded with coke.

All of this business was transacted in partnership with other BCCI figures as well, and much of Monzer al-Kassar’s arms dealing was conducted in partnership with not only BCCI, but also with U.S. government agents who had established private companies as proprietaries of the U.S. government (though the government agents themselves, and not the taxpayers, pocketed the profits from these companies). Monzer al-Kassar was also the man who handled the vast money laundering operation associated with the Iran-Contra dealings, and most of that money laundering was transacted through BCCI.

Meanwhile, of course, BCCI was conspiring with a cast of criminal oligarchs and mobsters to “bust out” major savings and loan banks in the United States. Some of the loot from those “bust-outs” was used to finance the Iran-Contra dealings, and a lot of that loot ended up in the pockets of Monzer al-Kassar. Still greater sums of the money that BCCI looted from the global financial system was, of course, also delivered to the world’s leading terrorist organizations, including the terrorist outfits that were intertwined with Monzer al-Kassar’s organized crime syndicate.

At the center of all this activity, we know, was Adnan Khashoggi.

At Khashoggi’s urging, U.S. officials appointed Monzer al-Kassar as the point man in the supposed effort to secure the release of the U.S. hostages (i.e. the hostages whose capture by terrorists justified the massive Iran-Contra enterprise to begin with). And, naturally, the terrorists had originally taken the American hostages on the orders of…Monzer al-Kassar.

Unsurprisingly, most of those hostages were not released, and indeed, the more weapons that U.S. officials delivered (mostly through Monzer al-Kassar and his BCCI associates, though others arms dealers were involved) to the Iranian regime, the more hostages were taken. Ultimately, a few hostages were released, but the most important of them (including Buckley, the CIA chief) were tortured and killed.

There is, moreover, some doubt as to the sincerity (or at least, some doubt as to the wisdom) of the U.S. officials who believed that they would secure the release of the hostages by supplying the Iranian regime with weapons because the Iranian regime had no control over the Hezbollah terrorists who had taken the hostages. The terrorists who took the hostages all belonged to a Hezbollah faction that took its orders not from Iran, but rather from Syria, and more specifically, from one of Syria’s most important intelligence assets…Monzer al-Kassar.

Meanwhile, Monzer al-Kassar was employed by the Soviet intelligence service, the KGB, and he was, of course, keeping the KGB apprised of Washington’s dealings with the Iranian regime and the Contras. In addition, Monzer al-Kassar and others in the BCCI enterprise, including Adnan Khashoggi, were helping the Soviets in their efforts to prop up the ostensibly Marxist regime in Nicaragua (i.e. the regime whose existence ostensibly justified the massively profitable enterprise to support the Contras by selling them guns, and buying their cocaine for resale at marked up prices in the United States).

Some chroniclers of these machinations, including former U.S. prosecutor John Loftus and the author of the German-language biography of Monzer al-Kassar, suggest that Monzer al Kassar had also taken “deep capture” to new levels—i.e. that he not only had lucrative business relationships with U.S. officials, but had also blackmailed some top U.S. officials. That is, he threatened to expose everything from their early involvement in the Edwin Wilson affair and the illegal scheme to kidnap people in Lebanon, to the subsequent Iran-Contra adventure. And to avoid exposure, officials in Washington were obliged to not only provide full protection and immunity to Monzer al-Kassar and his organized crime syndicate, but to pursue policies that were favorable to the Palestinian terrorist movement.

It might or might not be true that U.S. officials were blackmailed, but there is a vast body of evidence to support the contention that the regime in Washington did, in fact, afford its protection to not only Monzer al-Kassar but also the terrorist outfits that were part of his organized crime syndicate. This first became apparent in 1985, at the height of the Iran-Contra dealings, when Monzer al-Kassar was linked to multiple terrorist atrocities, including the hijacking that year of a luxury cruise ship called the Achille Lauro. Multiple foreign governments and news organizations reported that Monzer al-Kassar had sponsored the hijacking, and that the hijacking was perpetrated by Abu Abbas, leader of the Palestinian Liberation Front (and Monzer al-Kassar’s closest friend since childhood).

After the Palestinian Liberation Front terrorists seized control of the ship, they killed an elderly and handicapped American passenger named Leon Klinghoffer, and dumped his body into the sea. Subsequently, the ship docked at Port Said, in Egypt, and from there the terrorists were able to negotiate safe passage for themselves on a flight that was scheduled to land in Tunisia. The flight was reportedly intercepted by U.S. fighter jets, which forced the plane to land at Sigonella, a NATO base in Italy. But for some reason, Abu Abbas, who had been on the plane, was not arrested when he landed at the NATO base. And for reasons that were never explained, the Italians permitted Abu Abbas to board another civilian passenger flight, and this flight reached its scheduled destination in Yugoslavia.

The regime in Washington publicly requested the extradition of Abbas from Yugoslavia, but U.S. officials did not pursue their request with any particular enthusiasm, and Abu Abbas remained a free man. Abbas later ended up in Iraq (then an American ally) but still he was not arrested.

Some years later, Ari Ben Menashe, a former top Israeli military intelligence official, among others, alleged that the Achille Lauro hijacking and other terrorist attacks had been paid for by Israeli intelligence as part of an ongoing propaganda campaign aimed at gaining sympathy for Israel’s sometimes brutal war against the Palestinians. Meanwhile, a large cast of Israeli officials and arms dealers were involved with Monzer al-Kassar in the Iran-Contra dealings.

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Some have cast doubt on Ari Ben Menashe’s claims regarding the Achille Lauro, but there is no doubt the Israeli government was at the time funding and even arming some of the terrorist outfits that were part of Monzer al-Kassar’s crime and terrorism syndicate. The Israelis sponsored these terrorist outfits (most of them PLO splinter groups) believing (correctly as it turned out) that the more radical terrorists would harass and suck support away from Yasser Arafat and the mainstream PLO, which the Israeli government regarded as Enemy Number One.

For the same reasons, the Israelis (and their allies in Washington) sponsored the Muslim Brotherhood, and in 1988, they began to sponsor Hamas, which had been founded that year by the Brotherhood. Both the Muslim Brotherhood and Hamas, of course, had stated that their most important mission was to eliminate the state of Israel, but Israel anticipated (correctly, as it turned out) that the Brotherhood and Hamas would not only steal support from the PLO, but also destabilize countries (e.g. Egypt, Tunisia, Libya, Syria, Jordan) that Israel considered to be enemy states.

Presently, Israel is expressing concern that the Muslim Brotherhood has seized power in some of those countries, but Israel’s prior support for the Brotherhood and Hamas is not surprising, and many analysts suggest that there was more to it than just a desire to derail the PLO and enemy states. Indeed, there is much to give credence to reports that right-wing Israeli politicians and the more radical Palestinian terrorist organizations agree that maintaining the status quo of low-intensity conflict is not just politically advantageous, but also financially lucrative for both Israeli politicians and the Palestinian terrorists.

One reason to believe this might be the case is related to the emergence of powerful Russian organized crime syndicates that accompanied the collapse of the Soviet Union, beginning in the late 1980s. Many leaders of these Russian organized criminals set up shop in Israel and obtained Israeli citizenship, and as detailed in diplomatic cables made public by Wikileaks, the major Russian organized crime syndicates quickly became among the largest funders of the same Israeli politicians who have provoked conflicts in Palestine and Lebanon. Those Russian crime syndicates were (and are) also important partners (involved in all of the lines of business already discussed) of the Palestinian terrorist outfits, including those that were part of Monzer al-Kassar’s organized crime operation.

The Russian mobsters are, in addition, big players in Israel’s flourishing “homeland security” industry, which profits from selling services that purport to provide Israel with protection from those same terrorists. The homeland security businesses (and many other businesses, including narco-trafficking and financial crime), of course, benefit from the continuing state of low-intensity conflict and chaos in Palestine and neighboring Lebanon. They also benefit so long as the Israeli government remains focused on conflict, rather than cracking down on organized crime.

Beginning in the 1980s, Monzer al-Kassar himself had developed relationships with Israeli intelligence, and this relationship might similarly have been as much about business as politics. Among other ventures, Monzer al-Kassar brokered deals (financed by BCCI) that saw Israeli intelligence selling weapons to Iran at the same time when he was leading BCCI efforts to provide a full suite of services to Palestinian terrorist organizations that were ostensibly fighting Israel.

Owing to Monzer al-Kassar, BCCI had a particularly strong relationship with Abu Nidal, who was the most murderous of all the terrorists operating at that time. Over the course of few years in the 1980s, Abu Nidal’s terrorist organization killed more than 900 innocent people (some of them Americans) in more than 20 separate terrorist attacks. During some of that time, Abu Nidal was working out of an office at BCCI headquarters in London.

Abu Nidal’s most in-depth biographer, Patrick Seale, has written that Abu Nidal had, for a time, been employed by the Mossad (Israel’s intelligence service), and that some of his terrorist attacks had been paid for by the Israelis. Indeed, by all accounts, Abu Nidal was a mercenary willing to hire himself out to the highest bidder. During the 1980s, Abu Nidal was paid by Syrian intelligence to help the Syrian government crush a rebellion that was led by the Muslim Brotherhood, and a few years later, Abu Nidal, who had been mentored by leading Muslim Brotherhood clerics, was among the terrorists who had joined the Islamist International, the outfit that was founded by Muslim Brotherhood leader Hasan al-Turabi, and whose chairman was Osama bin laden.

In subsequent years, Syria’s government became a key sponsor of the Muslim Brotherhood and Hamas (which of course was founded by the Muslim Brotherhood), though, of course, the Muslim Brotherhood and Hamas are now once again (with the support of the U.S. government and its allies, including Israel) fighting to overthrow the Syrian government.

During the late 1980s, many of the top leaders of Hamas were involved with the BCCI enterprise, and during most of the 1980s and 1990s, many of them resided in the United States. For example, Mousa Abu Marzook, political chief of Hamas (and a key figure in the Islamist International) resided in Texas, and operated quite openly there even though earnest FBI agents had linked him to the 1993 bombing of the World Trade Center. In 1996, the FBI briefly arrested Marzook, but he was immediately released at the request of the Israeli government, which issued a statement saying that Marzook was “important to the peace process.”

The truth was that those earnest FBI agents had learned in 1993 that Marzook and other Hamas leaders in the United States had undertaken a major initiative to sabotage the peace process, and more specifically to undermine the 1993 Oslo Peace Accords that the Israeli government had signed with the PLO. Many Israeli politicians were similarly displeased with the Oslo Accords because they believed the Accords granted too much legitimacy to Yasser Arafat, the PLO leader. In other words, many Israeli politicians shared the ambition to sabotage the peace process. Meanwhile, of course, the Israeli government, or at least one faction of the Israeli government, was providing support in the form of money and even weapons to Hamas, hoping that a stronger Hamas would undermine Arafat’s authority.

Presently, Marzook resides in Qatar (one of Washington’s closest allies), where he not only has the full protection of the Qatari ruling family, but is also helping the Qataris (and Washington) support the activities of the “Arab Spring” rebels in Syria. However, back in 1996, Marzook was more friendly with the Syrian government, and at that time, Washington also had friendly relations with Syria. After he was released by the FBI in 1996, Marzook moved to Syria, where (at the request of Washington) the Syrian government provided him with full protection.

As of 2000, the director of the House Task Force on Terrorism was reporting that Marzook was among those who, along with Osama bin Laden and other key figure in the Islamist International were plotting to perpetrate a “spectacular” terrorist attack inside the United States. At the time, of course, Marzook and other key figures in the Islamist International had already been linked to the 1993 bombing of the World Trade Center. One of them was the Blind Sheikh (co-founder of Faisal Islamic Finance, formerly BCCI’s most important affiliate). Others were terrorists who were part of Monzer al-Kassar’s organized crime syndicate, the most notable among them being Abu Nidal.

Abu Nidal had dispatched one his deputies, Mohammed Ajaj, to participate in the 1993 World Trade Center bombing, after which the distinguished journalist Robert Friedman reported in the Village Voice that Ajaj was, at that time, an agent of the Israeli intelligence service. Also linked to the 1993 World Trade Center bombing was a fellow named Mohammed Salameh, and the International Herald Tribune reported that the telephone number and apartment address used by Salameh were registered in the name of one Josie Hadas, who had been identified as an agent of the Mossad. This is not to say that Israel was necessarily involved in the 1993 WTC bombing, but it is to say that numerous terrorists were on the payroll of not only the Israeli government, but also the U.S. government (which was, at the time, funding not just Monzer al-Kassar, but also Abu Nidal and the Blind Sheikh).

Some years later, in 2000, Abu Nidal was reported to be among those who were, along with Osama bin Laden and others in the Islamist International, plotting to perpetrate a “spectacular” terrorist attack inside the United States. After a spectacular terrorist attack occurred on September 11, 2001, some major news organizations reported that Abu Nidal had been operating an Al Qaeda training camp in Iraq in cahoots with Iraqi leader Saddam Hussein. According to these reports, Abu Nidal had personally overseen the training of Mohammed Atta, identified by U.S. officials as the terrorist who piloted the first airplane that had crashed into the World Trade Center. We can, however, hope those reports were not true because it has since been revealed that Abu Nidal was, at the time, an employee of the United States government.

That Abu Nidal was an agent of the U.S. government was first reported by prominent British journalist Robert Fisk, whose reporting on terrorism and the Middle East should be required reading for all Americans because Fisk is one of several mainstream journalists (too few of them Americans) whose reporting is usually true. In 2009, Fisk, then writing for The Independent, a newspaper in England, reported that he, Fisk, had obtained a report from Iraq’s “Special Intelligence Unit M4” confirming that Saddam’s regime had killed Abu Nidal after discovering that Abu Nidal was employed by the U.S. government.

According to Fisk, the regime in Washington (using Kuwaiti and Egyptian intelligence as intermediaries) paid Abu Nidal to provide information to the American government about Iraq’s ties to Al Qaeda. Fisk did not specify as to the nature of the information provided by Abu Nidal, but we might assume that Abu Nidal either provided authentic information that Mohammed Atta received training in Iraq, or that he, Abu Nidal, helped fabricate this information, which U.S. officials proceeded to leak to the media in support of their contention that Saddam had ties to Al Qaeda.

A similar story was subsequently published by Janes, a respected national security journal, which revealed that Saddam Hussein’s regime sentenced Abu Nidal to death in 2002 after discovering that Abu Nidal had in his possession classified U.S. government documents outlining plans for the U.S. invasion of Iraq–leading Saddam to conclude that Abu Nidal was an American spy. Which was a reasonable assumption in light of all we know about the U.S. governments relationship with Monzer al-Kassar’s organized crime and terrorism operation, which, of course, included Abu Nidal.

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Back in 1988, Monzer al-Kassar was linked to another terrorist atrocity—the bombing of Pan Am Flight 103 over Lockerbie, Scotland. The fact that al-Kassar was linked to the Pan Am Flight 103 bombing was reported at the time by a collection of mainstream journalists, most of them in Britain, but those journalists were viciously smeared by some U.S. government officials and journalists who were bent on pinning the bombing on Libyan dictator Muammar Qadaffi.

To this day, the cowed U.S. media reports that only “conspiracy theorists” believe that anyone other than Qaddaffi was involved in the Flight 103 atrocity, but the evidence is overwhelming that terrorists who worked for Monzer al-Kassar’s organized crime syndicate were the perpetrators.

In fact, it was not just “conspiracy theorists” who believed that al-Kassar was involved in the Pan Am Flight 103 bombing. It was, among others, numerous U.S. government officials, government investigators in Germany (where the bomb was loaded on to Flight 103), lawyers for Pan Am, members of Congress, a private investigator named Juval Aviv (formerly of the Mossad, with extensive experience tracking terrorist organizations) who was hired by Pan Am to investigate the bombing, and a former Defense Intelligence Agency asset named Lester Coleman.

When Coleman blew the whistle on the true story of Flight 103, he was indicted by the DOJ on trumped up charges that he had applied for a passport using false documents, and then he was smeared relentlessly by U.S. officials and journalists who described him as a con-man and a criminal. Meanwhile, U.S. officials denied that Coleman had anything to do with the U.S. intelligence community. As a result, he was forced to flee the United States, and he became the first American ever to receive political asylum in a foreign country (Sweden).

A reporter named Steve Emerson was among those who did the most to discredit Coleman, leading some to accuse Emerson of being a government stooge. Since then Emerson has done excellent research into terrorism (some of which I have borrowed for my own stories), so I don’t think he is a stooge, but he probably got the Flight 103 story wrong. Coleman has since proven that he did, in fact, work for the Defense Intelligence Agency (and that it was CIA officials who ordered him to apply for a passport using false documentation).

Coleman’s story about Pan Am Flight 103 (laid out in book called “Trail of the Octopus”) is more than plausible, and is, in fact, now widely acknowledged to be true. Meanwhile, the official story from the U.S. government has been thoroughly discredited–and notably, the official story emanated from many of the same officials—e.g. FBI counter-terrorism chief Oliver “Buck” Revell, Robert Mueller (now director of the FBI), top FBI official Lindsey Devecchio– who were involved in covering up the Edwin Wilson and Iran-Contra affairs.

The official story was that a Libyan intelligence officer named Abdelbaset al-Megrahi (on orders from Muammar Qaddafi) planned and carried out the bombing of Flight 103. This story was based almost entirely on the claims of the FBI and MI5 (Britain’s domestic spy service) that a shop-keeper in Malta had sold clothes that were found in the same suitcase that contained the bomb. The shop-keeper, Tony Gauci, was located by the FBI, and he fingered al-Megrahi as the man who had bought the clothes.

However, several documentaries have presented evidence that the U.S. Department of Justice paid Gauci, the shop keeper, at least $1 million in exchange for his agreement to name al-Megrahi. In 2009, lawyers for al-Megrahi (who was serving a life sentence in Scotland, owing largely to information provided by the FBI and DOJ) were about to present evidence of the pay-off and additional evidence pointing to the real perpetrators, but before they were able to do so, the Scottish released al Megrahi on compassionate grounds, saying that he had advanced cancer and only weeks left to live. (Three years later, al Megrahi died of cancer, in Libya).

In addition, it has since been widely acknowledged (as Pan Am’s lawyers, Coleman, German authorities, some CIA officers, Juval Aviv, and many others argued at the time) that the Pan Am 103 atrocity was the work of terrorists who were linked to Monzer al-Kassar, and who were also important figures in a heroin trafficking ring that was overseen by al-Kassar and protected by the U.S. government.

According to former Defense Intelligence Agency officer Coleman and others, the Drug Enforcement Agency and the FBI had made arrangements at the Frankfurt Airport that allowed al Kassar’s terrorist network to smuggle heroin on to airplanes (including Flight 103) without problems from airport security. There is no evidence that the DEA itself was (as some have said) dealing in heroin. These were so-called “controlled deliveries.” In other words, the DEA and other American government agencies (including the Defense Intelligence Agency) had recruited al-Kassar’s men as agents, allowing them to smuggle heroin into the United States in exchange for their cooperation in other investigations. Once the heroin was smuggled into the U.S., the DEA monitored its distribution to learn more drug dealers who were operating in the United States.

Meanwhile, of course, the U.S. government had employed Monzer al Kassar in many other capacities.

Unfortunately, according to Coleman and many others, one of the controlled deliveries contained not only the usual narcotics, but also a bomb—namely, the bomb that blew up Flight 103. That is, U.S. government agencies had created the conditions that allowed terrorists (who were, meanwhile, working as DEA informants and were employed by the U.S. government in other capacities ) to smuggle a bomb onto an airplane. In a frantic effort to cover up the U.S. government’s negligence, the FBI’s chief of counter-terrorism and the Department of Justice persecuted just about everyone who tried to reveal the truth.

Eventually, Coleman was convicted of perjury, at which point he publicly apologized and said that he had made up some elements of the story to get attention for himself. But his conviction was overturned on appeal, and Coleman recanted his apology. The court documents outlining the reasons why the conviction was overturned were sealed. Meanwhile, a general consensus emerged that Coleman was, at a minimum, correct to say that terrorists with links to Monzer al-Kassar were responsible for the bombing, and that top officials of the U.S. government covered up the involvement of Monzer al-Kassar and associated terrorists.

We might never know the full truth about the Pan Am Flight 103 bombing, but if we are to believe the majority opinion of former national security officials who investigated the bombing, and who have since come forth to challenge the official party line, Monzer al-Kassar was hired by either the Iranian regime or Syrian intelligence to organize the terrorist attack, and the terrorists who (on Monzer al-Kassar’s orders) carried out the attack were members of either Abu Nidal’s Black September or the PFLP-GC (the latter being the outfit that had, in the late 1970s, been trained by Edwin Wilson’s operation).

Whatever the truth, the bombing of Pan Am Flight 103 and the resulting liabilities soon resulted in Pan Am declaring bankruptcy. And it might or might not be noteworthy that Monzer al-Kassar and some key figures in the larger BCCI enterprise (whom I will not name because I cannot say with certainty that they should be implicated in a terrorist atrocity, though it is perhaps a possibility worthy of further investigation by others more capable than I am) earned a handsome profit from the bankruptcy of Pan Am, and these same BCCI figures made money on the later bankruptcy of TWA airlines.

TWA was forced into bankruptcy as a result of liabilities that it accrued from a series of disasters between 1985, when a TWA airliner was hijacked (by the Hezbollah faction that took orders from Monzer al-Kassar) en route from Cairo to Athens, and 1996, when TWA Flight 800 exploded soon after taking off from New York’s JFK international airport, destination Paris. The FBI and DOJ ruled that the explosion of TWA Flight 800 was the result of mechanical failure, but the general consensus among former U.S. government investigators is that TWA Flight 800 was bombed by terrorists whose identities remain unknown.

* * * * * * * * *

In 1991, we know, Monzer al0Kassar and the other terrorists in his syndicate had joined the Islamist International, whose chairman was, of course, Osama bin Laden. The first order of business was to replace the BCCI enterprise with something even better, and, of course, Monzer al-Kassar played a key role in this effort—the effort known as “The Financial Jihad.” Monzer al-Kassar also lent his full support to the more general “Grand Jihad in eliminating and destroying Western civilization,” meanwhile establishing new business relationships with major banks and hedge funds in the United States, and committing a host of destructive financial crimes with some of Western civilization’s leading oligarchs.

As Monzer al-Kassar continued to perpetrate eminently destructive financial crimes and operate his terrorism and organized crime syndicate, he apparently remained protected by the U.S. government, which certainly did nothing to stop him until 2008, when he was arrested in Spain and extradited to the U.S., where he presently faces trial for the one crime that he did not commit. That is to say, the DOJ has charged Monzer al-Kassar only with selling weapons to the FARC (a narco-terrorist paramilitary outfit in Colombia), but he did not actually sell weapons to the FARC. He merely agreed to sell weapons to undercover DEA agents who were posing as FARC representatives.

It is nice to know that Monzer al-Kassar has been arrested and that he is no longer described as the “Prince of Marbella,” but in charging him only with the one crime that he did not commit, the DOJ seems to be covering up (or at least neglecting to publicize, much less prosecute) the many crimes (from terrorist atrocities to narco-trafficking and destructive financial crime perpetrated against the American economy) that he did commit during his long and colorful career as one of the world’s most prominent oligarchs.

In addition, it is possible that Monzer al-Kassar was finally arrested in 2008 only because of his importance to the Syrian government (he was, indeed, one of Syrian President Assad’s most important associates), and because the U.S. government had decided at that point to lend its support to the jihadi guerrillas who were then already gearing up to overthrow the Syrian government. Those jihadis, of course, are now (with U.S. support) fighting the Syrian military under the banner of an “Arab Spring” campaign for freedom and democracy.

In any event, Monzer al-Kassar accomplished much over his career, and with few exceptions, the major U.S. news organizations have yet to give him any credit for these accomplishments. One exception, as I mentioned before, was Forbes Magazine. In 2004, Forbes (without otherwise providing the details of Monzer al-Kassar interesting biography) reported that Monzer al-Kassar not only had ties to Osama bin Laden, but was involved, along with two British citizens—Jared Brook and Lincoln Fraser—with a “high flying financial outfit” called Imperial Consolidated Group.

Imperial Consolidated was involved in multiple destructive financial crimes, most of them involving pump and dump schemes and the “bust-outs” of publicly listed companies in Europe and the United States. All told, Imperial Consolidated looted at least $300 million from the Western financial system. The British miscreants were charged for their involvement in this monumental criminal enterprise, and, meanwhile, they had sued Monzer al Kassar for slander, accusing him of telling people that Imperial Consolidated had fronted arms sales to Osama bin Laden. The merits of that lawsuit remain unclear, but it is clear that Monzer al-Kassar was himself involved with Imperial Consolidated (though he has never been charged on any count other then selling weapons to undercover DEA agents).

Meanwhile (to cite just one more accomplishment), Monzer al-Kassar had long been one of the world’s leading counterfeiters of American currency. His fake U.S. $100 bills were of such high quality that they were known as “Supernotes,” and he created such vast quantities of them that they had a negative impact on the value of the U.S. dollar. As early as 1996, Kenneth Timmerman, a reporter for Time magazine and The Wall Street Journal, prepared an official document for U.S. Congressman Spencer Bacchus outlining the details of Monzer al-Kassar’s counterfeiting operation. This report was promptly deposited in a trash can somewhere in Washington.

In addition, so far as I can tell, Timmerman’s employers at Time Magazine and The Wall Street Journal did not see fit to publish any stories about Timmerman’s important findings.

To be continued…Click here to read Chapter 6

Mark Mitchell is a journalist who spent most of his career working as a correspondent for mainstream media publications before joining DeepCapture.com. He is the author of the book entitled “The Dendreon Effect: How Felons, Con-Men and Wall Street Insiders Manipulate High-Tech Stocks”.

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There is More to the SAC Capital Story

There is More to the SAC Capital Story

Around 10 years ago a small number of citizen activists began identifying SAC Capital as being a central player in a “network” of hedge funds that engaged in all manner of dubious practices.

The media ignored the citizen activists.

In 2005, Patrick Byrne, then CEO of internet retailer Overstock.com (and future reporter for  DeepCapture.com) gave a famous conference call titled “The Miscreants Ball” in which he sought to expose a “network” of miscreant hedge funds. Soon after, Patrick identified SAC Capital as being the central player in that miscreant network.

The media ridiculed Patrick.

In 2007, DeepCapture was founded, and in May 2008, we published “The Story of Deep Capture” to tell the story of how DeepCapture came into being and to expose a pack of prominent journalists who seemed to be doing the bidding for (i.e. they were “captured” by) a “network” of miscreant hedge funds, including SAC Capital.

Since then, DeepCapture has published numerous stories exposing various misdeeds that have been perpetrated by these journalists and hedge funds, including SAC Capital. Some of the journalists ignored us. Some of them ridiculed us. Some of them, such as the eminently corrupt Gary Weiss, ridiculed us and fought us at the same time.

Gandhi said: “First they ignore you, then they ridicule you, then they fight you, then you win.

Then the news broke (this week) that SAC founder Steve Cohen has received a subpoena to appear before a grand jury, possibly a prelude to an indictment of Cohen and/or his hedge fund. In addition, the media has reported that SAC Capital is the main target of the largest insider trading investigation in FBI history, and the media has even reported (at long last and accurately) that SAC Capital is part of a larger “network” of financial operators and hedge funds involved in insider trading. So, apparently, we win.

But we have not won.

We will not have won until the day when the media reports that SAC Capital and other hedge funds in its “network” are involved in activities that are more damaging to the markets than mere insider trading. For example, some of the creditors to Lehman Brothers have sued SAC Capital and two other hedge funds for allegedly perpetrating manipulative short selling that triggered the 2008 death spiral in the stock price of Lehman Brothers and the resulting collapse of that bank.

You will recall that the collapse of Lehman Brothers brought the global financial system to the brink of apocalyptic ruin.

It is not clear what the status of that lawsuit is, so we cannot yet say with certainty that SAC Capital was the culprit behind the manipulative short selling that contributed (as even the SEC noted in 2008 “Emergency Order”) to the collapse of Lehman, but there is little doubt that hedge funds in the “network” have schemed to destroy other important companies. Have a read, for example, of the following email.

= = = = =Begin Message= = = = =

Message # : 727

Message Sent: 02/22/2006 08:57:48

From: AHELLER3@bloomberg.net|ANDY HELLER|EXIS CAPITAL MANAGEM

To: JONKALIKOW@bloomberg.net|JONATHAN KALIKOW|STANFIELD CAPITAL

Subject: CNBC – FAIRFAX

Reply:

He did this one time before, and the stock went down 3 on the open, then closed up 1. the way to get this thing down is to get them where they eat, like the credit analysts and holders. we’re taking this baby down for the count. ads and I are going to toronto in 2 weeks for a group lunch. J

= = = = =End Message= = = = =

That email was authored by a top employee of Exis Capital, which is an offshoot of SAC Capital, and as you can see, it concerns a conspiracy to take “this baby down for the count.” The “ads” to attend the “group lunch” was former SAC trader Adam D. Sender, head of Exis. The “baby” to be taken “down for the count” (unsuccessfully, in the end) was Fairfax Financial, a major, publicly listed insurance and financial firm.

The emails were acquired through discovery in Fairfax’s lawsuit against a group of hedge funds, one of which was SAC Capital. Although SAC Capital was ultimately dropped from the lawsuit, SAC’s satellite funds (including Exis and an outfit called Sigma Capital) were not dropped from the suit, which is ongoing. And the discovery from that lawsuit has produced additional evidence of shenanigans at SAC Capital. See, for example, DeepCapture stories “Hedge Funds Reading Tomorrow’s Headlines Today,” and “Hedge Funds Scurry…”

It is important for the media to begin paying attention to SAC Capital’s more egregious behavior because far too many people believe that SAC has done no worse than engage in a bit of insider trading, and a lot of people regard insider trading as nothing worse than “good research.” In addition, failing to tell the full story ensures that history will repeat.

Back in 1991, when Michael Milken was sentenced to prison, the media reported that Milken’s principal crime was insider trading when, in fact, he and others in his “network” had also “busted out” (i.e. looted and destroyed) multiple savings and loan banks, some of them among the most important financial institutions in the nation. Those “bust-outs” contributed to the savings and loan crisis that began in the late 1980s, and which ultimately cost American tax-payers billions of dollars in bailouts—a portent of bigger and better things to come.

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