from Hacker News

How the government set up a fake bank to launder drug money (2012)

by mdeck_ on 6/8/21, 12:29 PM with 97 comments

  • by reedjosh on 6/8/21, 3:38 PM

    Everyone is surprised to find the government does shady stuff, but many of these operations are even acknowledged like Iran-Contra where the government sold arms to the embargoed Khomeini government to generate black money to fund the Contras.

    > Senior administration officials secretly facilitated the sale of arms to the Khomeini government of the Islamic Republic of Iran, which was the subject of an arms embargo.[2] The administration hoped to use the proceeds of the arms sale to fund the Contras in Nicaragua.

    https://en.wikipedia.org/wiki/Iran%E2%80%93Contra_affair

    It's also discussed that the CIA does similar things with poppies to generate black money to fund regime changey activities.

    Here's one such article which is a weird source, but points to more mainstream sources for evidence.

    https://www.thelibertybeacon.com/a-conspiracy-theory-that-be...

  • by saul_goodman on 6/8/21, 2:07 PM

    Let's see, so they didn't nab any of the big players in the operation. So effectively they helped the biggest players by making it harder for the small to mid-tier drug cartels do conduct business. Sure, way to put the squeeze on the cartels there...

    A tangent to this is the way we conduct drug enforcement in the US. It's much better for police departments to wait until after the dealers make money to catch them so they can seize the cash as part of the crime. This dis-incentivises the actual prevention of the spread of illegal drugs. The entire system is corrupt and there's little to no incentive for the authority to behave in the spirit of the laws they enforce - to raise public health by eliminating the personal health and social problems that drug addition creates.

  • by ptsneves on 6/8/21, 1:22 PM

    I always wonder how this is legal in the U.S.A? Creating a fake bank in another country sounds like committing fraud in another country. At worst it can be they would be charged with money laundering themselves.

    What is the line of what is acceptable at entrapment in the United States? What stops any agency from creating permanent fake banks for example?

    I am glad drug lords get busted. I hate them, but I think if there is no line, then we do not need any kind of law. Just declare drug traffickers as not human and exterminate them. I do not think the outcome would be good.

  • by fnord77 on 6/8/21, 12:52 PM

  • by pxlt on 6/8/21, 8:12 PM

    Similar to this story that broke today, where the FBI secretly ran an 'encrypted' messaging network as a two-year sting operation

    https://www.theverge.com/2021/6/8/22524307/anom-encrypted-me...

  • by ttul on 6/8/21, 1:55 PM

    Today’s version would be a crypto exchange with its own USD stable coin.

  • by ChrisArchitect on 6/8/21, 9:47 PM

  • by trhway on 6/8/21, 9:13 PM

    Government provides an encrypted platform, a bank for money laundering, ... the supply chain has long been CIA side hustle. Basically private drug criminals are really federal contractors by now.

  • by strathmeyer on 6/8/21, 3:32 PM

    Three short paragraphs? Do we have to install the app or something?