Italian police reportedly seized nearly $6 trillion worth of fake U.S. Treasury bonds and other securities in Switzerland and arrested eight Italians in connection with international fraud and financial crimes.
The investigation began went Italian authorities began looking into a mafia loan sharking scheme. However, telephone and computer intercepts eventually led them to a slew of illegal activities surrounding Treasury bonds, reported Reuters. It took Italian, Swiss and U.S. authorities working in conjunction with one another nearly a year of investigations until the alleged criminal were apprehended.
The fake bonds and securities, said to be about a third of the U.S. debt, was seized last month from a Swiss trust company. The forgeries were an attempt to defraud several Swiss banks, said the U.S. Embassy in Rome according to Reuters.
Giovanni Colangelo, Italian prosecutor from the city of Potenza who helped coordinate the investigation, said that an international network, which had a hand in many countries, was behind the ploy. The organization was also attempting to acquire plutonium, reported Reuters.
Police footage showed there were several images of trunks containing the phrase Federal Reserve System, Treaty of Versailles, stamped with large golden letters. Bond certificates were with Chicago, Illinois, Federal Reserve Bank.
U.S. bond traders jokingly reacted to the news.
If there's that much less supply now, Treasuries should be rallying, said Kevin Flanagan, fixed-income strategist at Morgan Stanley, according to Reuters.
The individuals were arrested are accused of counterfeiting bonds, forging credit cards and loan-sharking in Lombardy, Piedmont, Lazio and Basilicata. Prosecutors said that the forgers wanted to use the phony bonds as collateral to secure loans.