BONDS SEIZURE SHOWS "DIRTY MONEY" IS BIG BUSINESS

LONDON (Reuters) - The seizure of suspected U.S. bonds worth $6 billion (3.8
billion pounds) from an international drug-trafficking gang suggests how
extensive and sophisticated the global money laundering business has become,
experts say.

It hardly matters whether the bonds are genuine or fake, they added. Either
way, their discovery shows that organised criminals wield the kind of financial
power that many legitimate companies can only dream of.

"If these bonds are real, it means that otherwise legitimate brokers,
accountants, lawyers and businessman have helped this gang turn their drug
money from cash into bonds, either knowingly or unknowingly," said Jeffrey
Robinson, author of several books on financial crime, on Friday.

"If the bonds are counterfeit, it means there's a gang producing these things
in such quantities that they're going to undermine the legitimate financial
markets with phoney paper."

The suspected bonds were seized in raids in and around London in the past two
months as part of Operation Hobart, which also involved officers from Colombia
and Ecuador.

Nine people were arrested in Britain and have been charged with drugs offences.
A further four were held in Latin America.

British police also seized 55,000 ecstasy tablets, a small amount of cocaine
and cannabis, ecstasy powder and around 15 kg (33 lb) of amphetamine paste. The
gang also owned assets valued by the police at around seven million pounds.

While the drugs seizure is relatively small, the amount of bonds found is
staggering.

The amount is more than the annual gross domestic product of Barbados, and if
the money were viewed as profit, it would put the gang up there with some of
the biggest companies in the world.

By comparison, oil giant Exxon Mobil made a net profit of $11.5 billion last
year, making it the world's most profitable company, while Microsoft made $10
billion.

It is still unclear, however, if the bonds are genuine or what kind of paper
they are. Britain's National Crime Squad, which is conducting the operation,
says it is checking their authenticity.

"We can't comment on this case but in our experience, when bonds are found like
this they tend to be forged," said a spokeswoman for the National Criminal
Intelligence Service (NCIS), which oversees the fight against organised crime.

"However, any kind of high value financial product is always a potential target
for money launderers."

The NCIS has seen a steady increase in the number of recorded suspicious
financial transactions in Britain from around 12,500 annually a decade ago to
over 20,000 now.

Robinson, author of "The Laundrymen -- Inside The World's Third Largest
Business", estimates the amount of "dirty" money floating around the world's
financial system at between $500-700 billion. He says his figures are based in
part on World Bank and International Monetary Fund data.

"Ninety percent of that is from drug trafficking," he said.

He says police and governments need to target the financial institutions which,
either knowingly or unwittingly, allow drug traffickers to "wash" their money.

"Business people who are otherwise legitimate have had their hands on this
money," he said. "We need to know who they are, if they knew it was drug money
and, if they didn't know, whether they should have known."