It’s a scene familiar to anyone who’s seen Scarface, the 1983 classic starring Al Pacino as a Cuban drug dealer who makes it big in the cocaine business.
Tony Montana (Pacino) is holding curt in his Florida estate. His visitor is a WASP-ish banker.
Bankers as a rule don’t make house calls. But Tony is no ordinary customer–his men literally haul bags full of bills into the bank when making deposits.
Except that now the banker has some unpleasant news for Tony:
“We’re not a wholesale operation. We’re a legitimate bank. The more cash you give me……the harder it is for me to rinse.
“The fact is I can’t take any more of your money unless I raise the rates on you.”
TONY: You gonna raise…
BANKER: I gotta do it.
BANKER: The IRS is coming…
TONY: Don’t give me that shit! Let’s talk. I’m talking. I go low, you go high. I know the game. This is business talk.
BANKER: Let me explain something. The IRS is coming down heavy on South Florida. There was a Time magazine story that didn’t help.
There’s a recession. I got stockholders I got to be responsible for. I got to do it, Tony.
Tony Montana’s personal banker gives him some bad news
TONY: We’ll go somewhere else. That’s it.
BANKER: There’s no place else to go.
TONY: Fuck you, man! Fuck you! I’ll fly the cash myself to the Bahamas.
BANKER: Once maybe. Then what? You’ll trust some monkey in a Bahamian bank with millions of your hard-earned dollars?
Come on, Tony. Don’t be a schmuck. Who else can you trust? That’s why you pay us what you do. You trust us.
Stay with us. You’re a well-liked customer. You’re in good hands with us.
(At this point, movie audiences burst into laughter. The line, “You’re in good hands with us” seemed directly lifted from the slogan used by Allstate Insurance: “You’re in good hands with Allstate.”)
Now, fast forward to 2014.
A Reuters news story dated May 21, 2014 noted that investigators from the Federal Securities and Exchange Commission (SEC) were probing Charles Schwab and Bank of America Corporations Merrill Lynch brokerage.
The SEC wants to determine if these brokerages violated anti-money laundering rules that require financial institutions to know their customers.
Broker-dealers are required to establish, document and identify customers and verify their identities in compliance with the Bank Secrecy Act.
In 2012, David Cohen, the U.S. Treasury Undersecretary for Terrorism and Financial Intelligence David Cohen, ordered regulators to guarantee that financial institutions are identifying the true beneficial owners of their accounts.
The reason: Drug cartels and terrorist groups have become highly creative in hiding and transferring their illegal funds.
According to sources close to the investigation, Charles Schwab and Merrill accepted shell companies and persons with phony addresses as clients.
In both cases, some of the accounts were eventually linked to drug cartels. Some of those accounts held hundreds of thousands of dollars; others held millions.
A Texas rancher and Charles Schwab client transferred money to a holding company that was actually a shell company.
Most of the Schwab clients being investigated lived near the Mexican border. Some were linked to Mexican drug cartels.
No further stories could be found on the Internet to update the progress of these investigations.
In fact, the government should have assumed long ago that brokerage companies were engaging in such behavior.
As Niccolo Machiavelli warned in The Discourses, his landmark book on how to preserve freedom within a republic:
All those who have written upon civil institutions demonstrate…that whoever desires to found a state and give it laws, must start with assuming that all men are bad and ever ready to display their vicious nature, whenever they may find occasion for it.
If their evil disposition remains concealed for a time, it must be attributed to some unknown reason; and we must assume that it lacked occasion to show itself.
But time, which has been said to be the father of all truth, does not fail to bring it to light.
Whenever the creating of wealth becomes an end in itself, all other ends are sacrificed to this.
Greed begins in the neurochemistry of the brain. A neurotransmitter called dopamine fuels our greed. The higher the dopamine levels in the brain, the greater the pleasure we experience.
Harvard researcher Hans Breiter has found, via magnetic resonance imaging studies, that the craving for money activates the same regions of the brain as the lust for sex, cocaine or any other pleasure-inducer.
Federal investigators need to view large concentrations of wealth as sources for at least potential corruption.
And they should ruthlessly–and routinely–investigate those sources, whether in the vaults of the Mafia or of major financial institutions.