Microkhan by Brendan I. Koerner

They’re Not Just Plot Devices Anymore

August 11th, 2009 · No Comments

BearerBond
Last night, we got in a brief discussion with a pal regarding the Hollywood history of bearer bonds. These arcane financial instruments played a key role in at least two cinematic classics from our younger years: Beverly Hills Cop, in which Eddie Murphy’s pal foolishly steals some “German bearer bonds” from a drug dealer, and Die Hard, where they were hidden deep within the Nakatomi Building. But save for a few instances of fakery, we’ve seldom heard of bearer bonds outside of filmdom.

It seems, however, that’s only because we haven’t been tracking recent developments in Latin American finance. Bearer bonds are moving like hotcakes down there, especially in countries like Panama where capitalism retains its Wild West flavor. And given the anonymous nature of the bonds, it’s hardly unexpected that they’ve become an underworld darling:

Federal prosecutors have initiated forfeiture proceedings against 14 Mexican bond certificates dating back to 1930 that they say are now wrapped up in a complex money laundering scheme.

The debt certificates—worth up to an estimated $22 million—were seized in two separate incidents in April at Hidalgo-Reynosa International Bridge and the Falfurrias checkpoint…

Bearer bonds are frequently issued by companies in Latin America as a way to raise money but have become an increasingly used tool in the money laundering game.

Unlike other securities transfers, which financial regulators monitor closely, the sale of bearer bonds are conducted anonymously and the certificates can be redeemed almost like an IOU—making them an attractive conduit for those looking to hide large sums of money earned through illicit means, said John Heasley, general counsel for the Texas Banker’s Association.

“They’re almost as good as cash,” he said.

Once again, Hans Gruber is proven to be a criminal ahead of his time.

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