Dave Simpson operated a trading company out of Torrance, California, brokering contracts between Taiwanese electronics manufacturers and American importers. He did that so well that he earned a significant amount of money in a few, short years. Not trusting US banks, he put most of his hard-earned fortune in a bank based in the Cayman Islands. He did not try to conceal this fact from the IRS, disclosing the existence of his foreign bank account on his 1040 tax-form. By being a law-abiding citizen he ought to have protected himself, right? Wrong. A couple of years into the relationship with his Cayman Island bankers, his bank became involved in a drug-money laundering scandal. All assets deposited in the US by this bank were frozen by the US Government, pending outcome of an investigation of where the money had originated, ie which accounts contained “dope money“.
The investigation dragged on for four years with a final outcome not expected for another five or six years. Result: when his company needed cash, Simpson was unable to access his personal assets in order to save the company, not to mention paying his mortgage. His business went bust and the bank foreclosed on his house, evicting him onto the streets. He is theoretically a millionaire, yet he cannot gain access to his savings because the United States government has decided that it has a very serious beef with some Colombian drug lords who just happened to use the same bankers. Tough luck – for Simpson.
Similar fates befell Iranian citizens in the aftermath of the fall of the late Shah when the US government ordered all “Iranian-owned” private assets frozen in retaliation when a mob of Iranian students seized the US embassy in Tehran and held American citizens as hostages for 444 days.
Similarly, expatriate Kuwaiti citizens found their private bank accounts in most countries blocked until further notice when Iraq invaded Kuwait in an attempt to take over the country and its assets, both domestic and foreign-held. During World War П, the US seized all French, Swiss and British private accounts.
In all instances, private individuals were unjustly penalized by having their bank accounts frozen and their credit cards cancelled. Kuwaitis recently wound up depending on handouts from Kuwaiti embassies to tide them over. A ‘regrettable’ result of a Big Brother state striking back at its enemies, real or perceived. But also something that those affected could have done much to prevent had they taken future dangers and upheavals into account instead of relying on the status quo to remain unchanged. The worst part is that United States federal agents never had a near-good case for freezing “Kuwaiti assets” across the board to prevent Saddam Hussein and his henchmen from looting and pillaging private Kuwaiti bank accounts abroad. Most of the American Kuwaiti accounts seized were owned by Kuwaitis living in New York or London.