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8 arrested in case of fake US Treasury bonds

ROME - Italian police arrested eight people yesterday on charges related to the seizure of $6 trillion in fake US Treasury bonds, in a mysterious scam that stretched from Hong Kong to Switzerland to the southern Italian region of Basilicata.

The value of the seized bonds is in the neighborhood of half of the entire US public debt of $15.36 trillion, but they were never intended to be passed off as real securities. Rather than counterfeit, they were what law enforcement officials call fictitious, printed in 6,000 units of $1 billion each - a unit that does not exist - the bond equivalent of $3 bills, US officials said.

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In a statement yesterday, the US Embassy in Rome said its specialists had examined the bonds, which were dated 1934, and determined they were fictitious and reportedly part of a scam intended to defraud Swiss banks. There is no evidence the bonds were ever used for that purpose.

Italian police arrested eight people across Italy on fraud and related charges as part of a broader investigation into organized crime in the southern Basilicata region.

They said they had found the bonds - along with a fake copy of the Treaty of Versailles, signed by European powers at the end of World War I - in special compartments in metal crates in a Swiss vault, which Swiss authorities had sent them last fall following a request for cooperation.