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It appears that Hurricane Sandy has uncovered--and perhaps destroyed--billions of dollars worth of hidden, untaxed assets held at the DTCC on behalf of some of the biggest banks. Now that they are uncovered, how does a thief claim his loot without implicating himself?
Billions in Bearer Bonds could be lost due to Hurricane Sandy
It’s the biggest mystery on Wall Street.
Hurricane Sandy floodwaters inundated a 10,000-square-foot underground vault downtown, soaking 1.3 million bond and stock certificates — including bearer bonds that function like cash — and putting them in danger of turning to mush.
A contractor working for the vault owner, the Depository Trust and Clearing Corp., is feverishly working to restore the paper....
Even a contractor who bid on the cleanup and recovery job — the notes were drenched in diesel- and sewage-tinged water that filled 55 Water Street’s three sub-basements — clammed up when asked about the damage.
“It’s nobody’s business,” he said. “The public doesn’t need to know what’s in that vault. It’s between them and their customers.”....
“There are three vaults,” a hardhat said outside the building. “I wasn’t in the vault where the bonds are. Security is very tight down there. I know they were all under water. Billions of dollars’ worth, soaked. I know they are trying to pack them up.”
Bearer bonds are paper certificates, usually issued by governments, that are redeemable after a prescribed term. The bearer submits an attached coupon to receive payment. Because they are typically unregistered and can be used like cash, they were commonly used by those wishing to hide, and not pay taxes on, assets. They were banned in 1982.
But the value of the threatened notes under 55 Water St. remains unknown to all but the innermost circle of Wall Street bankers.
One source said $70 billion in bearer bonds were in jeopardy.