If you thought the current unrest in France couldn't get worse, well, it has! Five French banks have been raided by authorities with the suspicion that they participated in a tax fraud scheme. The banks that were named were Societe Generale, BNP Parabis, HSBC's Paris office, Natixis, and BNP's Exane unit. More than 150 investigators were on the scene at the headquarters' and searched for evidence that the banks were in a "with-with trading" scheme in which suspects are accused of misappropriating hundreds of millions of euros by bilking the payment of French dividend taxes.
Investigators said that this case was opened up for investigation in 2021 and they were focused on looking at tax fraud and money laundering that ocurred in the form of dividend payouts. The strategy involved shareholders transferring stocks for a short period of time to investors abroad to avoid paying taxes on the dividends. Sometimes shareholders were able to get a tax refund. Investors then sold the shares back to the original owner, and both parties pocketed the savings. The rumored amount that was being laundered out was 1B euros and the French government wants to take that money back.
German investigators from Cologne were also helping out the French and we can only suspect that these foreign parties may have been Germans. In the past there have been similar money laundering schemes made by bankers out of Germany. Past scams have defrauded citizens of billions of euros. Overall, this has occurred in many countries and it is not limited to France and Germany.
The timing of this conflict cannot be in any worse for the French as the citizens are already in riots and protests after Macron's draconian rule has seen the lives of millions of French people be a lot more miserable. The French are really upset right now about the retirement age rising from 62 to 64 which has gained a lot of resentment globally. These bank frauds have hurt the European economy too as we are entering a recession that sees the cost of living rise, and GDP slowing down. To add to this, we have seen 2 huge banks fall recently in SVB and Credit Suisse. I am curious to see how this all plays out and I wonder what else will break public news in the U.S. economy.
Link: https://www.foxnews.com/world/france-prosecutors-raid-paris-big-banks-tax-fraud-sweep
1 comment:
Hello Brandon,
There has been a recent trend where banks are beginning to go underwater, but this one shocked me. I've been aware of money laundering schemes in the consumer sector but never would I have thought of the banking sector. This article really makes me question the integrity of the banks in the United States. After all, this would cause large bank runs and bank failures if were to occur, which is likely exact what's happening to the five banks in France right now. I am curious to see If they will be bailed out by the french government, or if they will just have to suffer for their mistake.
Overall, good post.
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