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Italian Police Seize $6 Trillion of Fake U.S. Treasury Bonds

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Italian police on Friday announced they had seized about $6 trillion worth of fake U.S. Treasury bonds, worth roughly a third of the entire U.S. national debt that, if released into the worldwide financial system, could potentially have caused serious disruptions.  Police arrested eight Italians accused of international fraud and other financial crimes.

The operation, coordinated by prosecutors from the southern Italian city of Potenza, was carried out by Italian, Swiss and U.S. authorities after a year-long investigation, Reuters reports, citing an Italian police source.

“It began as an investigation into mafia loan-sharking, but gradually expanded as prosecutors used telephone and computer intercepts to unearth evidence of illegal activity surrounding Treasury bonds,” the news service reports. “The fake securities, worth more than a third of U.S. national debt, were seized in January from a Swiss trust company where they were held in three large trunks.”

Potenza’s prosecutor Giovanni Colangelo said an international network “in many countries” was behind the forgeries. More concerning was a report on the Italian daily Corriere della Sera’s website that said the criminal network was believed to be interested in acquiring plutonium, citing sources at the prosecutors’ office.

Reuters sais police videos showed images of the trunks, with “Federal Reserve System, Treaty of Versailles” stamped on the side in large, golden letters.

Bond certificates marked “Chicago, Illinois, Federal Reserve Bank” and other securities, some for one billion dollars, were also shown.

Prosecutors said the forgers had hoped to use the fake bonds as collateral to secure loans.

The eight men arrested are accused of counterfeiting bonds, credit card forgery, and loan-sharking in the Italian regions of Lombardy, Piedmont, Lazio and Basilicata, according to the report.