The last of the big-time smugglers? 
The Times | December 23, 1981
RETOUR 

		Paris Nicholas Fraser   Pierre-Georges  Latécoère  was a successful French businessman. He made seaplanes in the 1930s and employed such pioneer aviators as Jean Mermoz and Antoine de Saint Exupery to fly his mail planes to North Africa and Latin America. (Not true.For Latin America see page in French, Aéropostale)      When he inherited some money, however, he did what a lot of prudent Frenchmen were doing in an insecure decade: he turned his inheritance into 30,000 gold coins which he hid under the floorboards of his salon. There the gold stayed, through the German occupation, the Fourth Republic, the years of Gaullism - until his son (Pierre-Jean Latécoère), fearful of the spectre of French socialism, decided last year to move the inheritance out of the country. Packed in jute-lined pouches and small metal boxes, the gold left the family chateau by hired car. At Toulouse, it was transferred to an armoured truck and driven to the airport. In Paris it was taken to a bank and divided up. From Paris, it was taken by various means across the frontier. In Frankfurt it was gathered together and placed on an other plane. In Edmonton, in Canada, it was deposited in another bank for safe keeping.  "There is a rather displeasing tradition of fiscal flight in this country", explains M Patrice Cahar, the young and energetic official whose job is to staunch the flow of capital from socialist France.  "I do not know about its origins. If one is being generous one must conclude that it has to do with the reality of the family for French people. Otherwise one has to say that the French are not very civicminded."  The money goes from France to Luxembourg or Switzerland. In the old days it was left in Switzerland, but now, like M Latecoere, many Frenchmen are taking the added precaution of secreting it further afield. France's eastern frontier stretches for 2,900 miles and has more than 550 crossing points, many only fitfully guarded. It would seem easy to cross the frontier unsearched, which is indeed what four left-wing journalists did two weeks ago, going across by car, by train, by plane and on foot, and carrying with them a substantial hoard- smaller than M Latecoere's, admittedly - in chocolate Louis d'Or. When they were on the Swiss side they unpacked their chocolates within view of the shocked customs men. "The douaniers are serious", they concluded, "but there is no such thing as a Swiss frontier."  "They didn't actually have any money", said M Bernard Faillie, who is in charge of a key section of the frontier. "So there was no atmosphere of fear and suspicion that surrounds a real transfer. That is how a douanier knows whom to suspect."  It is still early, it is cold, and M Faillie is standing at the Vallard-Thonex frontier point which carries auto- route traffic from Lyon to Geneva. People cross this frontier to work in Switzerland and they are impatient to get to their jobs. The douaniers work hard, but they stop no more than one car in 10. When they search, it is done quickly and lightly.  M Faillie is full of talk about launches, helicopters and coordinated investigations, but he has to admit that there is not much his men can do. "We are merely preventive", he says. "Confronted with the serious smuggler we can have no illusion as to our efficacy."  The French authorities get some idea of the clandestine flow of capital from periodic and rather vague reports in the Swiss press and from the number of 500 franc notes asked for in banks throughout France. There was no great panic after the election, largely because the result had been anticipated, but the flow increased suddenly in September with the rise in income tax and the stiff inheritance tax brought in by M Mitterrand's government.  People who want to get large amounts out often use professionals, passeurs as they are called by the customs men, who receive a 10 per cent commission on whatever they smuggle. The passeur is often a local man flown personally to the customs. Passeurs may work in families, fathers and sons, uncles and nephews. Some own garages and doctor hired cars to provide false compartments. "They always say it's the first time", M Faillie says. "That's the song they like best: 'Always the first time."  Money has been found in heatproof pouches attached to motors and in false compartments inside batteries. On the Paris-Brussels express, M Jean-Baptiste Brisset, an engineer, was found with more than lm francs (£100,000) inside the lining of his English raincoat. In the Ardeche, a local bank manager was apprehended on his return from a holiday in Switzerland: he had been noticed tearing up and chewing the pieces of paper on which were written the numbers of his clients' accounts.  One car was stopped at the Swiss frontier and given "a full search" because the man in the car behind seemed unusually interested in what was going on. "Our agent noticed his agitation and the fact that his car had a number plate from the Midi, where there is always a lot of money", M Faillie said. "On that occasion there was no need to interrogate the passeur about the person for whom he was acting."  But the really rich do not need passeurs. There is, for instance, the process of "private compensation", much used in the past. A man has French francs and wishes to deposit them in a Swiss bank. A middleman (probably a stockbroker or a business acquaintance) finds someone who already has money in Switzerland which he now wants to use in France.  Businessmen use padded orders or false patents; they pay more than they need for the materials they import or take out patents in Switzerland for their own products and bill their companies excessively for using them. Many small or medium sized French businesses have used such methods for years.  M Latecoere's transfer came to light when customs investigators went into the Banque de Paris et des Pays-Bas (Paribas) a year ago. They found a list of 150 of the bank's "special clients" - a cross-section of the Paris haute bourgeoisie, including lawyers, doctors and company directors - and a complete record of telex transactions between Paribas and its Swiss subsidiary.  Paribas officials, unprepared for the visit, had not thought of destroying these documents. Nor had they thought of shredding any of the papers in the Latecoere dossier - including, oddly enough, the evidence that they had without his permission sold a number of his antique gold coins, replacing them in transit with more ea Times Newspapers Limited, 1981 recent and less valuable coins.  The French government insists that soon such expedients will no longer be available to the rich, and by English or American standards, it has extraordinary powers. It can search the mail without warrant (admittedly, in principle at least, only in the presence of the recipient) and it can gain access to all bank accounts, commercial and private, with- out warrant or subpoena. Now that the French banking system has been nationalized it will be much easier for the government to make use of its powers.  "We shall be able to block many of these leaks", M Cahar says, "That will leave the traditional French methods: the car, the suitcase and the banknotes."  Where the government in the past merely confiscated what it took at the frontier, it will now make a distinction between big and small fish. Petits fraudeurs, those caught with a million francs or less, will merely have their money confiscated. As for grands fraudeurs, they will not only be liable to a 30 per cent fine over and above the amount confiscated. They may also be jailed for up to five years.  M Latecoere had to sell his coins for 29m francs to pay a fine of 36m francs, losing his entire inheritance and more. His case will be talked about wherever there is old money in mattresses or under floor- boards and whenever people speak wistfully of "keeping things from the socialists". Perhaps he will turn out to have been the last of the grands fraudeurs.  Nicholas Fraser The last of the big-time smugglers? The Times | December 23, 1981

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