Malaysia, United States, Sherman discussed on Business Talk with Jim Campbell


Joining us from London is Bradley hope for for the Wall Street Journal. This is really. An indication of what's going on out there. This is the craziest most unsustainable kind of schemes that I've ever come across. Because you know, we often joked about if they had just kept if they had just stayed with the first billion they would never probably gotten caught because the reason all of this has come out is because one MVP became saddled with so much debt eventually rose to almost thirteen billion dollars of debt. And and it had it had no no like savings from the country's leisure. It didn't it didn't have any disbursements from Malaysia. Like, they're like, most sovereign wealth. Funds would have would be the savings of the country from their oil sales or something. So because it was so unsustainable the whole thing just kind of came tumbling down. And then the investigation started, and that's kind of where they are. But it's just mind boggling, I mean, you'd think if you want to steal some money out of a billion, you take fifty or twenty million, but to take seven hundred million of the billion and think nobody's. Going to notice that he was like twenty seven years old when he did that deal. I think when it first started and you call him, a serial fabulous. What does that mean, by the way? Well, basically from from a young age, he was he was kind of telling stories to people that weren't really true know. So he he told friends that he he was Richard than he was when he was in news in this kind of very high end British boarding school. And he just kept telling stories I mean, in a way, he's he's kind of serial fabulous. And he's also the greatest. Stage manager he would he would kinda pull you aside and whispers, something Q, and you felt like you were getting to know the truth of something. And and only later maybe years later, you realize that he was doing that with everyone, and he was telling them each a different story. You know? So he always had this uncanny ability to figure out exactly what makes them work and to use it to he know. In large the scheme on covered up by some more time. So I think and the serial fabulous part in a way. He's just he's never really told the truth on about the steel ever, you know, throughout the whole course of it. And there's always an, and it's kind of sloppy in a way, you know, sometimes the story would change after the fact, and there would be no way that there's no way to really change the money flow. So it was almost kind of it's kind of crazy that you would even try to do that. This whole thing appear to me to be really rooted in the failure of monitoring, the global flow of funds, and you have money laundering offshore banks, not following laws. Corruptions law firms involved. You you use a figure thirty two trillion dollars of money laundering, which is bigger than the US and China's GDP's. It's just it's just rooted really in the in the failure of the system to figure out how to control these flow fund. Yeah. I mean, I would say there's there's kind of two levels the more micro level is that. The global financial system is kind of assumes that deals between countries between sovereign wealth fund. A in southern will fund B are going to be big ticket numbers. And so when the seven hundred million going this way and a billion going that way. No, no, no, don't worry. This is Malaysia the government of militias. Money's this is their sovereign wealth fund. There was kind of this assumption that that's you know, that's how things work. You know? I can imagine being the guy who seeing these clothes. It'd be pretty hard to imagine that someone just stole seven hundred million dollars in the course of like ten minutes. So so that's one level. But then the higher level. I think this year is becoming ever more clear is that for for a long time, all especially the western kind of leadership countries when it comes to the global financial system had allowed this offshore opaque system to get larger and larger and larger, and it depends on all these different pieces, you know, offshore secrecy companies banks that don't don't do proper compliance. But you know, it's an incredibly large system. And it's so big now that to turn it back. It's almost going to be a monumental task is all that money will fight the efforts attempted to turn things back. You know, even I'm not sure if you see follow this case in Europe called Danske Bank, the Danish Bank. They had this tiny Estonian branch that over the course of nine years saw two hundred billion dollars flow through it. They now think is probably all suspicious. Most of it from Russia. So there's like tiny branch was doing that. You can imagine. What what else is going on out there? What is Larry? Larry layering in these airing overhearing. Sorry, sorry. Leering is is I mean, basically a lot of the a lot of money laundering techniques are just meant to make it harder for people who are maybe not even very well paid compliance people to press a button that says suspicious. Layering is just it's just it's just efforts to disguise the origin of funds. So just having a company owned by a company owned by a company. So that if you wanna if you wanna try to follow it and get lost you find this company is owned by a BVI company, and and that's been turned on by Seychelles company, and it goes on and on even slows down law enforcement to if you follow that money. They have to file you know, like a legal request in each jurisdiction. And some of those restrictions are just not very friendly because those kind of requests, so they can they can really slow down a lot of the of the law enforcement actions against people like this. I was surprised also that there's a lot of laws in place for anti money laundering through banks and stuff and reporting. But there's a thing called interest on lawyer trust that is not part of that reporting requirements so top law firms can actually serve as money laundering out. Well, I would say it's not clear that for example, in this case Sherman throwing didn't know what was going on. They didn't know where the money came from. But it's it's it's an A like gaping huge hole in the US financial system that basically the way it works is. He's law firms originally crazy special accounts that were meant to let's say you have to send over let's say you're going to buy a hotel or by something huge. You send us money over its held in this account at the law firm and the interest on that would go to this kind of charitable cause. She's the all the law firms, they contribute to paying for people to have a free lawyer if they can't afford one that was the idea, but it turns out it's also just like a huge money laundering tool in some cases. And because what it does let let's say that you're some sort of counterparty in the US and somebody from Malaysia. They wanna buy something you get the money from Sherman in sterling you don't get there's no way to follow that money before that. So it makes basically eliminates the ability for anyone to do any diligence on the on the buyer, and these these pooled account just they're extremely dangerous. And I think it's obviously an abuse of of what they were meant to set up four. But that's what you find so often money laundering is that something that has this innocuous purpose. Like even the idea of a trust. Trust was I think I was reading somewhere. It was. It was created during the time of the crusades in England when people were leaving to go to war, and they didn't know what was going to become of their their assets. So they create trust. This is talk with Jim Campbell all talking all business. Sixty minutes of radio with leading figures from the world of business along with the business of politics and sports right here on biz talk radio network..

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