It is Difficult to Accept Injustice

It is so very difficult to accept injustice, especially when it has been a deliberate injustice from the authorities of a country like Denmark.

Injustices do take place all over the world; however, this injustice did not take place in Russia, China or Chile but in my home country: Denmark. Denmark is a well-respected democratic country but Bagmandspolitiet (the Special Prosecution) epitomises the abuse of a system, which happens when politicians give power to ordinary people and civil servants – such power will always be misused sooner or later.

A friend of mine, Anthony Marreco (now deceased), who was the co-founder of Amnesty International and the youngest prosecutor at the Nurnberg Trial, taught me a lot about injustice in every corner of the world. He later engaged me with Amnesty International’s work for some years after the event in Denmark.

I was fortunate enough to work for several years with Tony (Anthony Marreco) in London on other issues, but I am well aware of the terrible injustices which take place all over the world every day. However, other injustices do not excuse the injustices which happened to me. To have been subjected to such serious injustice is one of the worst pains for any human being to suffer through.

The fact that fewer injustices take place in Denmark (in proportion to the population) than in most other countries does not rectify the injustices which do take place.

Some countries have the greatness to admit when injustices are discovered, such as the United Kingdom, but it takes on average 17 years before the system have to admit the truth. Unfortunately, there is a lot of injustices in the criminal justice system in the United Kingdom.

The Guildford Four and the Maguire Seven were the collective names of two groups whose convictions in English courts in 1975 and 1976. Both groups’ convictions were eventually declared “unsafe and unsatisfactory after 15-16 years”. The Birmingham Six were six men who, in 1975, were each sentenced to life imprisonment following their false convictions for the Birmingham pub bombings. Their convictions were declared unsafe and unsatisfactory and quashed by the Court of Appeal on 14 March 1991. Unfortunately, I do not believe that Denmark has such strength. Denmark is a small society which prides itself on being better than others, a place where injustices do not exist.

Last May it will 30 years since the Judgement against Denmark and this January, it was 40 years since my arrest, for alleged tax evasion and the closing of my companies. Further, this year it will be the 70th anniversary of the European Convention on Human Rights. Drafted in 1950 by the then newly formed Council of Europe, the convention entered into force on 3 September 1953.

Information  (A political and economic independent newspaper in Denmark). The leader refers to me as “H.”

“H has not been treated with any decency, respect or proper justice. He was kept incarcerated in solitary confinement for eleven months as well as being kept incarcerated on remand for nearly three years. They, the authorities, destroyed his business with the charge of serious tax evasion; a trumped-up charge, which could not stand up in court and was not based on any real evidence at all.

Due to the police action on the first day, they (The Special Prosecution) created a situation of total financial ruin for him and many of his clients. This today, is the ground on which the prosecution has created its charges against him. Through those three years which have passed the different authorities in many different ways have pulled the legs away from his defence, in flagrant contempt for the words of the law” 

I still remained incarcerated in pre-trial detention for another one year and five months after this editorial in the highly respected ‘Independent Danish Newspaper Information’. I continued to receive pre-trial punishment and was held as a hostage to justice; innocent until proven guilty! Moreover, in pre-trial solitary confinement, I remained vulnerable against the unjustifiable parasitic strains of the Danish tabloid press.

I Was Struck Down

I was struck down – the way in which a young healthy tree is chopped down – in the prime of my life; persecuted by the Danish authorities and subjected to one thousand four hundred and ninety-two days of restrictive incarceration and pre-trial punishment. What’s worse is that I received a life sentence, preventing me from working in banking and financial services for the rest of my life. The worst still was living with a ruined family and the deep, mental effects and psychological scars from my solitary confinement and long restrictive incarceration.

I was arrested on Politically-Motivated Trumped Up Allegations

The Danish authorities arrested me on politically-motivated allegations that retroactively and unfairly asserted that I had violated the Danish tax laws. These allegations never become a charge or indictment, since they were based on lies and falsehood.

I did eventually leave my pre-trial detention and solitary confinement, but the terrible experience has not left me. This is the reality.

Denmark has handed me a life sentence by stealing such important years in my life and criminalised my person.

Five days after my arrest for alleged tax evasion, the Danish state television showed a special forty-minute program which was most prejudicial and effectively sealed mine and my companies future; justice had gone out the window with a total disregard for my legal rights. This television program was even repeated five days later just to make sure everybody in Denmark had seen it and the Danish authorities actions had become a fait accompli!

Already after ten months in pre-trial solitary confinement and long before my indictment and being formally charged, I made a proclamation to the Danish public in a press release, which the court then disallowed me to publish.

“I declare that the most flagrant violations of the Danish constitutional rights and lawful interests that have been allowed in relation to my case, including the trial by the media, already at this stage rule out the possibility of a fair examination and trial of the case in court on the strength of the fact that the aggregate of these violations makes impossible the normal administration of justice in this case, including ensuring the right to a fair trial prescribed by Art. 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms.”

The European Court of Human Rights agreed with me and later found Denmark guilty of Article 6: not providing me with a fair trial. Unfortunately, this was almost another nine years later; nine years too late after so much injustice against my family and I.

Living with injustice –

Sure, you know life is not fair and sometimes circumstances feel so unfair it’s difficult for you to let go. However, persistent anger and feelings of injustice—directed toward yourself, and have a steep price tag: they rob you of happiness at the moment and have negative impacts on your health. I knew that these emotions have a negative impact on health. Anger causes increased tension in the body and this, in turn, increases pain. Anger is associated with increased inflammation in the body and this can worsen pain and overall health.

Feelings of anger and injustice can keep you focused on what’s wrong and who is to blame for it. My worst pain remaining throughout the last 39 years came from the solitary confinement, not the anger as to the injustices by the Danish state.

There is injustice throughout the world ranging from the oppression of cultural and religious groups, widespread economic and social inequality,  violence against women, and unequal access to medical care, legal protection, and education. Just think about the large social injustices faced by those living with impairments and disabilities around the world. For me to complain about the injustices against me, seem somewhat little in the world of injustices.

What happened to me should be seen in relation to the fact that it was created entirely by the action of the Danish authorities; it was planned and deliberate with no consideration to what happened to the people involved. The Special Prosecution, Bagmandspolitiet, used harassment that its subtle nature meant that it was able to be plausibly denied.

What gave me the most weight in deciding to enter cyberspace was the great number of lies which surrounded my case on the Internet as well as the lies that surrounded the case of closing down healthy operating financial companies in 1980.

Lies which were compounded would ultimately crush the truth and cover up something which should have been exposed a long time ago.

Thousands of newspaper articles were published in Denmark at the time, (I listed more than one thousand five hundred newspaper articles to the European Commission of Human Rights, ECHR in 1983), mostly made up of stories with sensational headings, malicious lies and innuendoes; all very pre-judicial in my case. This was orchestrated by the Special Prosecution in their pursuit of covering up their injustices against my family, clients of the companies, the staff, and the companies themselves and me.

The Danish media ultimately created irrevocable harm to my family and me as you cannot get those lies and innuendoes back from the mind of the public. The media, at the time, totally controlled public opinion and the “truth” by creating their own stories, which become the truth in the public mind.

My defence lawyers, many clients and I had always hoped that the truth would be printed one day; but no such luck.  After more than thirty-seven years, the whole event in Denmark has been swept under the carpet as something the authorities did not wish to go into or revisit; neither did the media which participated actively in the injustices.

Denmark, which always claimed to be a decent democratic country, – “a real virtuous nation, better than the rest of the world’s countries”  and claiming to always adhere to the highest standard, certainly found itself “convicted” at the European Court of Human Rights because they did not provide me with a fair trial. A fair trial is the foundation of justice.

The Judgement Did Not Go Down Well in Denmark

This judgement against Denmark is the first case that Denmark lost, however, it did not, as expected, go down well with the Danish authorities, the academic faculties of law in Denmark and the media. The media did not really cover the judgement or this victory for me, only a few articles were published.

Many people in Denmark, (including jurists and academics), have, through the years, asked me to write about my case. Even some respected journalists have offered to help. Nevertheless, the events were too depressing and stressful for me to go back to even in writing.  It was a nightmare; a horror story which even today I bare very deep scars from, mental and physical scars from the 309 days long solitary confinement. Consequently, I am left telling my story today after all those years.

I had still hoped that one day, someone in a senior position in the Danish bureaucracy would have spoken out and told the truth. But that was never to be, at least until now.

The flood of lies, misinformation, misrepresentation, distortion and outright falsehood about the case and the events at the time have made it necessary to put the record straight before I leave this world.

What gave me the most weight in deciding to enter cyberspace was the great number of lies, which surrounded my case on the Internet, as well as the lies that surrounded the case of closing down healthy operating financial companies in 1980.

Lies, which were compounded, would ultimately crush the truth and cover up something, which should have been exposed a long time ago.

Thousands of newspaper articles were published in Denmark at the time, (I listed more than one thousand five hundred newspaper articles to the European Commission of Human Rights, ECHR in 1983), mostly made up of stories with sensational headings, malicious lies and innuendoes; all very pre-judicial in my case. This was orchestrated by the Special Prosecution in their pursuit of covering up their injustices against my family, clients of the companies, the staff, and the companies themselves and me.

The Danish Institute of Human Rights did not exist when I was under torture in Denmark, it came much later, after my win at the European Commission of Human Rights and Denmark become concerned about Human Rights in their own backyard, although, the Danish newspapers mostly ignored my case.

Despite, the fact, that I won the first case against Denmark at the European Court of Human Rights, and a judgement by the full 17 member’s Court, if you search (https://www.humanrights.dk) for my name in their extensive online library, one will not find any result, neither by my name or my case at the ECHR.  The institute operates with a budget well in excess of 130 million D.Kroner. Obviously, they are totally obedient to their paymaster, and the last thing they want to show the world is to show the truth as to torture, political and judiciary corruption in Denmark in 1980s. 

Even when reading the Danish Wikipedia as to solitary confinement in Denmark, Isolationsfængsling,  they have in the last years removed my case, and no reference to the fact that I went on a 55 days hunger strike, in order to get out of the solitary confinement.

This is also the facts as to pre-trial detention, Varetægtsfængsling,  changes have been made and the references to my case are wrong.

Even the Danish State Radio and Television, have “lost” practically all the radio and television archives related to me and my case, according to one of my grandchildren. No wonder Isi Foeghel, who was part of the Danish team at the Court of Human Rights when my case was heard, later become chairman of the Danish State Radio.  Interestingly, Isi Foeghel had himself been involved in a financial scandal, after serving as minister of tax.

The Danish media ultimately created irrevocable harm to my family and me as you cannot get those lies and innuendoes back from the mind of the public. The media, at the time, totally controlled public opinion and the “truth” by creating their own stories, which become the truth in the public mind. Most people now understand the overwhelming power of the media.

My defence lawyers, many clients and I had always hoped that the truth would be printed one day; but no such luck.  After more than thirty-eight years, the whole event in Denmark has been swept under the carpet as something the authorities did not wish to go into or revisit; neither did the media, which participated actively in the injustices.

I hope that this website and my blog, despite the many years which have passed, will bring more truth about my case and what really happened at the time to the surface. Perhaps even a Danish ‘WikiLeaks’? (Too much to hope for!) Moreover, because of the evolution of the financial market and the media reporting, the average investor in Denmark is so much more informed.

“Hauschildt you have been selected –and judged!”

In early July 1980, after I had spent more than five months in pre-trial solitary confinement, my defence attorney, Jørgen Jacobsen, came to me and said:

“I know that you have not spoken to anyone for weeks and now I am going on holiday, therefore I wanted to see you. What I am going to tell you now – I cannot do anything about. I am deeply sorry, nevertheless I still want to tell you. What I am telling you I have been told from the most reliable source and I do not see anything which can prevent all this from happening.

Hauschildt, you have been selected – and judged. You were selected because you are a ‘foreign Dane’ with no political affiliation or power. You work in a business which deals daily with Swiss, New York and London banks – with the movement of money in a financial market most people in Denmark do not know and cannot participate in. You controlled your business and did not employ many people, not like a factory owner.

Your clients can even use black money to buy gold and silver over the counter without registration, outside the control of the tax people. You are a bourgeois, when you drink beer you need a glass, Danes drink off the bottle. You even need a knife and fork to eat a sandwich (open Danish sandwich).

The popular press like to write about people like you, your children are at private boarding school. Yes, you are an ideal candidate for Bagmandspolitiet.

It does not matter that you have not done anything criminal; they will find a way to justify all of this since they have no other choice. After all, your business is now closed and you are here in solitary confinement for the fifth month. All the “stories” in the tabloid press cannot get you back out of the public mind. A picture has been painted of you and your companies – you have been judged.”

After five months in solitary confinement, the person that was telling me all of this information was not anyone, but advocate Jørgen Jacobsen.  He was considered one of the best and most experienced defence attorneys in Denmark at the time. He was a freedom fighter during the Second World War and started his law practice in 1951. Although he had always appreciated the better things in life, he was a member of the Danish Communist Party for many years.

Are You Hauschildt?

In February 2006, I sat in the British Airways hospitality lounge in Heathrow Airport enjoying a light snack and a glass of champagne together with my life-partner. Our flight to Nice had been called but we decided to have another glass of champagne since we always went late to the plane.

Just as a stewardess came to us to ask us to board since we had a long walk to the plane, a man came over to me and said: “Sorry” in English, and then asked in Danish “Er De Hauschildt?” (Are you Hauschildt?). In answering yes to the question, the man continued to tell me that his wife recognised me, but he was not quite sure. Since my partner started to pull me away to go to the plane, he said to me: “My wife wants me to tell you that some of us in the Ministry did not like what we did to you.” (nogle af os i ministeriet kunne ikke lide hvad vi gjorde i mod Dem). Hearing this, I immediately asked for his name and card. He lightly shook his head and said: “Even on a senior civil servants pension I have to go quietly through the doors” (gå stille med dørene). At that moment I started walking away since my partner had left for the aeroplane and we did have a long walk to the boarding gate.

During my walk to the plane, I thought that he may not have necessary referred to the Ministry of Justice, in fact, it could have been the Ministry of Finance or the Ministry of Trade and Industry, not to forget the Ministry of Foreign Affairs.

On the plane, I told my partner what had happened, despite that she always told me to “let sleeping dogs lie” she said that I should produce something on the Internet. To publish a website and to at least put out the truth about what had happened and the injustices, hoping that someone would possibly come forward with the truth. We tried to continue our beautiful life but this would prove to be impossible due to a lot of other developments in the years to follow.

In the past few years, I have faced the death of my life-partner, my soul mate-in-life. I am also getting a lot older and am coming to the end of the road in my journey through life.  Lately, I have walked the long hard road of sorrow deep in the valley of despair.

I was fortunate enough in life to have had much love, what’s more, enjoyed true love for many years after the terrible events in Denmark. Love is the most important thing in life.

Life for me today has come to a stage where almost everything – all external expectations, all pride, all fear for embarrassment or failure – falls away in the face of death, leaving what is truly important.

I have never been the same human being again since being in solitary confinement for three hundred and nine days. This solitary confinement affected me very badly; after more than thirty years I still suffer badly on most days from this torture. My life stopped during that solitary confinement and consequently, I have since lived my life as a totally different person.

The fact is that the investors and the general public in Denmark are far more informed about the financial markets, including people working for the authorities and in the banks, and this would in itself make my case impossible today.

The general public and even wealthy individuals in Denmark did not know much about the international financial market in 1980 and their sophistication with regards to trading. This allowed the Special Prosecution to make up mysterious and clouded allegations about my companies operations. Moreover, the Danish media, with their malicious lies, took advantage of public ignorance with regards to investing and their knowledge with regards to the international financial market and sold them sensational stories – as always.

Pioneer of Investing in Precious Metal

As a pioneer of investing in precious metal for more than fifty years, I have indeed always been well aware that this type of investment did not suit the tax happy politician and civil servants since the investor acquired transportable assets out of reach of taxation. Therefore, under communism and in many dictatorships, holding precious metal was strictly illegal and even punishable, as it was in China and Russia, with the death penalty imposed.

As to taxation, we now live in a time where fiscal authorities in Germany and other European countries have been paying criminals for stealing data from Swiss and Liechtenstein banks in order to find out whom of their citizens have not paid tax. Germany even provided these criminals with new identities.

When Countries Act as Criminals

When countries act unlawfully as criminals, (which they have always done when the truth is told, just read WikiLeaks) the citizen should take note, especially when we are fortunate enough to live in Europe or the Western world.

The question is: should the government be allowed to do unlawful acts and consequently be allowed to cover this up?

All governments and their departments do commit acts which are against the current laws of the land. They also seem to be able to cover up such acts, by “adjusting the law” by making new laws and directives – always able to cover their tracks. However, all these politically elected and public civil servants believe that they have the legitimacy to decide what is best, even when they take unlawful actions.

We allow government and civil servants this right to “do what is best for us” like they have the moral and legitimate right, not forgetting the intelligence and know-how to take such actions.

In my own experience, we do allow this; I ran a “democratic” elected organisation and know that when something comes up, you just deal with it. The last thing you do is to ask hundreds or thousands of people, you will simply not be able to act. If you have made a mistake, one tries to sweep it under the carpet or justify it by changing “the rules”.

No doubt that the Danish government was “allowed” to decide that they had to take action against something which part would affect the established banks, the National Banks directives and currency rules at the time. Moreover, this was a legitimate way for people to hide their black money and possibly take these assets abroad without the control of the authorities since all the rules were not defined at the time.

Furthermore, since the fiscal authorities had not seen the consequence of tax laws with regards to investing in commodities and currencies, they had to show that the arm of the law and tax man reaches out to every corner, draws in the land.  Hundreds of tax investigations and successful cases came about as a result of the closing SCE and my arrest.

I have no difficulty in accepting the above information; my difficulty is partly personal (for all the suffering my family and I had to endure) and also on behalf of all the investors which lost out as a result of the authorities’ unlawful action.

Firstly, authorities “should” try and play by the rules, which is after all, what they themselves are responsible for. Secondly, when injustices have been done and exposed, at some point the government should admit to such errors and call a spade a spade. Practically always, authorities do not have the spine to do so, partly because it will always mean that they have to admit to their own mistakes made by individual civil servants. With their power domain, they do not tolerate this, since it will almost always affect their reputation, the spirit of the system and collegial loyalty.

Worst of all, for the politician, their electability is at stake – so they cover-up, and in most cases succeed, unless the opposition finds out. Just take the Tamil case in Denmark, what really happened to the top civil servants from the Ministry of Justice who had acted unlawfully and criminally – I am sure they enjoy their fat pensions today?

I told the court that I would go on a hunger strike in August 1980; I wanted to release a statement to the press. Judge Claus Larsen did not want this to happen. Part of this statement informed the public about a meeting in the Danish Law Society in the spring of 1980, where the chief for Bagmandspolitiet, Finn Meilby, proudly told an exclusive audience of a few lawyers that Bagmandspolitiet used the same methods against SCE as the police did in Chicago in the 1930’s case (wiretapping, disinformation and agent provocateurs).

The head of the US Supreme Court Chief Judges Louis Brandeis said about such methods: “If the state uses illegal and unlawful methods, it allows the citizens to be contemptuous of the law and take the law into their own hands”.

The Responsibility of the Free Press

The free media should be a guarantor for the citizen for exposing obvious injustices and wrongdoings by government and their civil servants. This responsibility of the “free” press should not be taken lightly.

The Danish media failed miserably with this responsibility in my case. Instead of seeing it through the authorities’ eye with true concerted intention, they went along as a lap dog and swallowed all the lies and misinformation that Bagmandspolitiet created to justify their actions.

Moreover, the tabloid press livened up all the “stories” from false gold bars to black-market trading – all which committed them editorially to make a pre-judicial public trial; rubbing me with the right to be treated as guilty until proven guilty or innocent. According to Article 6 of the European Convention, the Danish media violated my right to a fair unprejudiced trial.

The European Court of Human Rights held an open court hearing on the 26 September 1988 on my case, in front of the full court of judges from all member countries. The German, French, Belgian and Dutch television stations were there, but not the Danish State Television which had been used by the Danish authorities to create this trial by the media.

Today the court never include all member countries, when I had my case in front of the European Court of Human Rights, there was only 17 member countries, now the ECHR include near 50 members.

Recent Events

Other events made me take note such as the previous year’s impact after the “Icelandic Banking Saga” of Kaupthing Bank and IceSave, Lehman Brothers and the Bear Stern Bank bankruptcies. Lately, the criminal charges against Goldman Sachs and several Hedge Funds for insider trading exposed what really happens “behind” the scenes in banking and the financial world. The clever people try to outsmart the lesser, something which has always taken place and is nothing new.

Even the respected JP Morgan bank was recently fined £33 million by the U.K. Financial Services Authority for basic compliance failures. These compliance failures meant that the bank had not protected twenty-three billion dollars’ worth of clients’ money by segregating it from its own funds over a seven-year period.  One may ask where the auditors were as well as all the lawyers to monitor the accounts!

Santander Bank in the UK was fined £32.8m for serious failings in its probate and bereavement process. Santander’s probate and bereavement process contained weaknesses resulted in it failing to effectively follow-up on communications with deceased customer representatives which increased the likelihood of probate and bereavement cases not being closed.

The bank would stall and remain incomplete, meaning that funds would not be transferred to those who were entitled to them despite Santander being informed that a customer had died; and certain funds belonging to deceased customers would not be identified and transferred to those who were entitled to them who were unaware of the existence of those funds. In some cases, funds were held for many years contributing to beneficiaries being deprived of the use of them for a considerable amount of time.

When I received instructions in the mid-1960s from a major Swiss private bank, what to do when a client died and what the bank would do, make it so difficult, by a certain procedure to prevent anyone to get the money.  A death or government investigation offered the greatest opportunity to make money for the banks. At the time, most account holders had not appointed beneficiaries, as they had a numbered account, therefore, the bank ultimately ended up with all the money.

The Culture of Greed

The recent debate in Denmark about all the money which has been made by the banks on people’s pension funds through the many years, confirms my point. The banks are there to make money first and foremost from other people’s money – that is their business.Is there a place for morality on Wall Street any more?

Professor Niall Ferguson doesn’t think so, at least since Siegmund Warburg died in 1982. Ferguson believes that regulation won’t clean up the Street but that bankers need to be taught morals. For those who don’t know, Siegmund Warburg founded investment bank S.G. Warburg & Co. after WWII and ran the firm through the 1970s. The firm was eventually sold to UBS in the mid-’90s, and Warburg was famous for “relationship banking”.

I somewhat disagree with Ferguson’s view, he forgets that the City of London was founded by the money from the slave trade and sugar plantations, even Lloyds of London. Moral and the City do not go together.

Right now, Wall Street seems pretty far away from Warburg’s ideal of high moral standards and ethics. Bank CEO openly jokes about the culture of greed, with Goldman Sachs Blankfein’s “doing God’s work” comment and John Mack’s admission that “We cannot control ourselves.” These are the guys at the top. What I’m curious about is where morality fits into the lower levels of banking. Is it possible to work in the culture of greed and still consider yourself a “moral” person?

I will be the first to admit that when I got started, all I thought about was the money. Well, that’s not exactly true, it was about security for my family. I also fancied myself something of a market wizard, so I pictured myself shepherding huge sums of money and capriciously micromanaging every aspect of my unfortunate underlings’ lives.

I certainly wouldn’t say I was a “moral” person, but neither was I “immoral”. It would be more accurate to say that I was “amoral”. I didn’t go out of my way to screw anybody (with a few notable exceptions), but I did make a number of client-related decisions based on how much money I would make. That said, we had an advantage back then over bankers and traders today: we actually made more money when our clients made.

One of the best film reflecting the whole industry is Margin Call.  Margin Call is a 2011 American drama film written and directed by J. C. Chandor in his feature directorial debut. The principal story takes place over a 24-hour period at a large Wall Street investment bank during the initial stages of the financial crisis of 2007-8.

I am proud that two of my sons have seemed fit to walk away from such greed, by leaving completely banking and the financial services. Both made such decision after for years seeing people being a rip-off.

Today, with the structure of management fees, 2 & 20, and the various other fee-generating machinations of the banks, clients no longer have to make money for bankers to reap huge bonuses. Back in the day, if your clients lost their collective asses you had a terrible year. Today, hedge funds can drop by 50% in a year and even close up shop, but the manager is still going to rake 2% (or more in a lot of cases).

Banks today routinely short the same assets they’re recommending their clients purchase, they front-run their clients’ orders, and they blatantly (and proudly) mislead rating agencies and long-term customers just to make a buck. As Professor Ferguson says, the guiding principle is no longer “Are we doing the right thing?” but “Can we get away with this?”

Having seen the greed of other profession ranging from lawyers to auditing houses and possibly worst, the medical and pharmaceutical industry, I am not making any judgement. At my time of life, you have seen it all.

So I’m not curious about how these guys square it with yourselves. Do you tell yourself that you’re just a tiny cog in a giant machine, that you’re just following orders? Or are you more like I was and just don’t really think about it, trying to maximize your personal return? Is morality even a consideration in finance? And how do you feel about the characterization of bankers as sleazy lowlifes?

The good and bad person

I have for years been telling the following story: I want to buy a property and ring to find out the details, I speak to the son of the owner and he tells me that the property cost 700,000. I go to the property and speak to the owner, a nice old lady.  Because, I want the property and be kind to her, I offer her 1 million for the property, which she very happy accept. She tells everybody that a nice man purchased her property for much more money then she asked, even her son tells everybody how good I am doing this.

A few months later, after I have received planning permission to build 35 apartment, I resell the property for 10 million. She reads about this proposed development and that I have sold the property for ten million. Now, the old lady tells everybody I am a fraudster and defrauded her for 9 million.

Banks Pay out More than $300bn in US fines

Banks have been fined a staggering $300 billion-plus since the financial crisis, according to a tally released in February 2018.

Most of these fines have been assessed for misleading investors about the underlying quality of the mortgages they packaged into bonds during the housing bubble. Selling practically worthless bonds to their clients and investors. Under normal circumstances, bankers would end up in prison, but this has not been the case.

Why have so few bankers gone to jail?

The American financial history has generally unfolded as a series of booms followed by busts followed by crackdowns. After the crash of 1929, the Pecora Hearings seized upon public outrage, and the head of the New York Stock Exchange landed in prison. After the savings-and-loan scandals of the 1980s, 1,100 people were prosecuted, including top executives at many of the largest failed banks.

In the ’90s and early aughts, when the bursting of the Nasdaq bubble revealed widespread corporate accounting scandals, top executives from WorldCom, Enron, Qwest and Tyco, among others, went to prison. The credit crisis of 2008 dwarfed those busts, and it was only to be expected that a similar round of crackdowns would ensue.

The meltdown of Savings & Loans institutions in America in the 1980s resulted in that more than 1,100 bankers were convicted for their misdeeds. However, this has not been the case with the 2008 financial crisis, when the world’s financial system was brought to its knees and had to be bailed out by taxpayers at a cost of billions.

Millions of people lost their jobs or suffered from lower living standards because of the recession brought on by the financial collapse. Yet almost no bankers have faced legal sanctions for their part in precipitating the crisis. In Britain, which had to bail out three of its biggest banks, not one senior banker has gone on trial over the failure of a bank.

Still, the fact that the only top banker to go to jail for his role in the crisis was neither a mortgage executive (who created toxic products) nor the C.E.O. of a bank (who peddled them) is something of a paradox, but it’s one that reflects the many paradoxes that got us here in the first place.

Money-laundering Violations by Danske Bank

Danske Bank, Denmark’s biggest lender, has been caught funnelling billions of euros of dodgy cash from Russia and elsewhere to unknown destinations. I will get surprised if any of the Danske Bank’s directors will go to jail, despite, the bank is at the centre of possibly the world’s biggest money-laundering scandal.

During the eight years from then until 2015, an astonishing €200bn of non-resident money – mostly from Russia, Ukraine, Azerbaijan, Moldova and other ex-Soviet states – flowed through the branch, according to a report commissioned by the bank from law firm Bruun & Hjejle.  The investigators have so far examined 6,200 of the 15,000 non-resident accounts opened during the period, and say the “vast majority” of them are suspicious.

Even the Russia’s central bank warned Danske that the branch was being used for nefarious transactions – either tax evasion or money laundering to the tune of billions of roubles a month. This warning was ignored, as Danske Bank made good money from these transactions.

In 2008 Danske cancelled plans (of course) to move its Baltic subsidiaries onto the bank’s main IT platform, meaning – incredibly – that the Tallinn branch did not deploy the same anti-laundering checks as the head office in Copenhagen. No wonder when you make loads of money, according to Financial Times, the return on allocated capital for Danske’s non-resident business in Estonia was an eye-watering 402 per cent compared with 7 per cent for the bank as a whole in 2007.

Yes, the fact that no-one took action might be explained by the fact that the Estonian branch was generating 11% of Danske’s total profits while accounting for 0.5% of the bank’s assets (and the fact that non-residents accounted for up to 99% of the Estonian profits).

The non-resident business continued to flourish even after JP Morgan withdrew as Danske Bank Estonia’s correspondent bank for dollars in 2013, concerned it was being used to channel dodgy funds.

It was only in 2014 that Danske’s senior management began to wind down the business after a whistleblower – who has been named by the Danish press as Howard Wilkinson, the British former head of Danske’s trading business in the Baltics – alerted them to the use of the branch for alleged money laundering by a London-registered limited liability partnership (LLP).

What exactly is money laundering?

It’s a generic term that describes any process by which criminals can disguise, move or spend their ill-gotten gains by transforming “dirty” money into legitimate “clean” assets. Estimates from the likes of the UN and IMF suggest the amount of money laundered each year is in the region of 3%-5% of global GDP.

A very basic form of money laundering is simply to take a bagful of cash to another jurisdiction and deposit it in a bank. A step up from that might be for a mafia-type organised crime gang to run a “legitimate” cash-intensive business (a car-wash, a casino, a restaurant, say) as a front through which it can channel and launder cash. More sophisticated laundering uses financial products for the same ends.

Danske Bank isn’t the only bank to be caught out. Last month the Dutch bank ING was fined €775m over a laundering scandal. Last year Deutsche Bank paid a total of $630m to US and UK regulators over “mirror trades” through its Moscow branch, which was allegedly used to launder $10bn out of Russia. Analysts at Jyske Bank have predicted a global fine of as much as $8bn for Danske if wrongdoing is proven, says the FT.

I recall back in the 60s and 70s that all multinational companies and banks used the mirror trades to transfer profits from one place to another, nothing new.

Since the financial crisis, banks have paid more than $300bn in fines for wrongdoing, but Oliver Bullough, whose recent book Moneyland explores how kleptocrats have exploited Western financial and legal systems, thinks the problem may be the tip of an iceberg, he tells the FT.

“We only know about Danske because Wilkinson stuck his head above the parapet, but how many other banks in the Baltics were doing exactly the same thing?”

Janteloven Still Reign in Denmark

Denmark still seems to kill off the people who have put their heads above the mass and show the greatness of creativity in specific businesses. People such as Klaus Riskjær, Jan Bonde Nielsen, Brask-Thomsen, Mogens Glistrup, Kay Wilhelmsen, Jeppe, Morten, Søren V. Petersen and so many others are an example of the “Danish” way to treat people who have talent over and above the average person. “De skal kanølfles” (they must be punished) that is Janteloven. What is interesting about all the above-mentioned people is that they have all been through the grinder of Bagmandspolitiet, some were crushed, some granulated and a few came out as powder.

In writing the above, I have to point out that I have not followed people or the developments in Denmark during the last twenty-seven years and so I do not know the many people who may also have been through the grinder of Bagmandspolitiet. Although I do believe that many must have been guilty, I am more concerned about the not so guilty people and worst, where they were directly subjected to injustices by Bagmandspolitiet’s misuse and abuse of power.

I see that two other companies that Denmark should be proud of are Novo Nordisk and Grundfos. They also had to suffer the humiliation of Bagmandspolitiet as did Kay Wilhelmsen, Midtbank, Hafnia, VKR and Carl Bro who all at least won against Bagmandspolitiet. They were lucky that they did not have to endure being arrested, locked up in solitary confinement and presented live on the prime time television news screen as well as a more than four years pre-trial punishment.

The so-called Jyde brother’s case had to be dropped because of my judgment against Denmark at the Court of Human Rights. I know that the brothers received millions in compensation for their pre-trial detention; although nothing can compensate such an ordeal. Worse still, this money was taken by the liquidators of their estates – there is no justice. I should like to hear from the brothers as to their experience and ordeal.

The Jante Law Prosecution and Police

Bagmandspolitiet should be called The Jante Law Prosecution and Police. After all, they were the creation of the Social Democratic Party who epitomised Janteloven, now in government again. As described in other places on this website, I am sure that so many of Bagmandspolitiet staff spend all day working by scanning newspapers and magazines and today, the Internet, looking for their next prey. They act when someone appears to be successful and have made money; we must punish these achievers.

Interestingly, there seem to be a political consensus in Denmark as to Bagmandspolitiets need for more resources, see “Skærpet jagt på banditter i habitter” (Increased hunt on criminals in suits) Berlingske Tidende 25 January 2011. Sadly the socialist is back in power promoting mediocrity.

Some of the Press still working at the sewer level

More than thirty-one years ago I did forbade my staff to have the popular tabloid press around in my offices. Sadly I see that this press still makes a living in today’s Denmark on peoples’ miseries without editorial morality and ethics regulations. This is not just a Danish phenomenon, but I am afraid it is the case in most of the Western world.

We have recently witnessed that a British tabloid newspaper had, for years, been using unlawful telephone recordings which taped the conversations of hundreds of people. More broadly, both in Denmark and U.K., tabloid newspapers and police departments routinely rely on one another: The tabloids want good stories and the police want good coverage.

Recently the highly respected journalist and Pulitzer Prize winner Carl Bernstein (Watergate) spoke out about the tabloid press and said that the tabloid press works at the sewer level and pollute by bringing everything into the gutter. The tabloid intrusion has no accountability and is corrupt and criminal. 

I Served More Than an 8 Years Sentence in My Pre-trial Restrictive Detention, including 309 days in solitary 

During the more than four years in my pre-trial detention, my wife and I never had any privacy. My family had to be without me for four Christmases’ and Easters, as well as all of our birthdays: my sons’, my wife’s, my mother’s and indeed my own from the thirty-ninth to my forty-second birthday.

I was never allowed any home visits and despite been given a final sentence of five years, (the Bagmandspolitiet asked the Court for a 12 years sentence), I served more than an eight years sentence as I was kept as a pre-trial prisoner with all the restrictions and for months I was not able to see my wife, sons and my very ill mother and stepfather.

What made it so much harder was that every day I expected that I would be released and that the real truth would come out and something would happen. The truth never did come out and I, therefore, had to live every day with great disappointment and a sense of hopelessness. To lose hope is terrible, hope is so important to us. My prolonged uncertainty had a disorganising effect on me; I had considerable anxiety and was psychiatrically unstable, which still affects me badly today.

The Danish Authorities did not want me to appeal to the lower court’s verdict and even put pressure on me by keeping me incarcerated during the so-called appeal (there was no appeal process only a rubber-stamping of the lower court’s trial). I would have been released seven months earlier if I had accepted the lower court’s unjust verdict.

As to my case at the High Court, I had, as an advocate, Folmer Reindel who told the press that I had a choice of being hanged or burned.I was locked-up on pre-trial detention for one thousand four hundred and ninety-two days with three hundred and nine days spent in solitary confinement. I never, according to the Danish Prison Authority “Kriminalforsorgen”, was a prisoner – e.g. serving a sentence for a criminal offence, I had only been on remand in pre-trial custody.

White Had to be Black

Because of the action by Bagmandspolitiet in Denmark, the Swedish Prosecution had to instigate a case in Sweden against my Swedish company: Scandinavian Capital Exchange AB. Already in June 1982, the Swedish prosecution had concluded that the company and I had no case to answer, as I had acted legally within the law.

In order to make a case, the Swedish Prosecution asked two respected law professors in Sweden to look at SCE’s Deferred Delivery Contract’s terms of condition. One of the law professors was the highly respected Professor Per Edwin Wallen from Lund’s University. The Swedish SCE contract was an exact copy of the Danish contract that SCE used in Denmark just translated into Swedish and approved by Swedish lawyers.

The two Swedish law professors concluded the following with regards to the standard conditions of SCE’s Deferred Delivery Contract with regards to the companies’ obligation to purchase precious metal: “That such obligation did not exist and that MH as the companies Managing Director had acted in accordance with the contractual agreement entered into with the clients.” In other words, I as the Managing Director did not have any obligation to buy or hedge our sale of silver, platinum and gold.

Something is Rotten in the State of Denmark

That “Something is rotten in the state of Denmark” surely was obvious, at least it should have been for everyone. Bagmandspolitiet charged me with fraud and that such legal obligation existed. So where there was a clear legal contract which did not provide any obligation on me as the companies managing director to buy or hedge according to the sale of the companies, Bagmandspolitiet was able to just blatantly disregard this and get both courts, judge Claus Larsen in the lower court and later the High Court judges, to follow and rubberstamp their abuse of power.

Both Judge Claus Larsen and the high court judges took the opposite view to the Swedish law professor’s legal opinions and judged that such obligations did exist, reading the same contract – they had to – in order to justify everything.

Without this liability in the contract with our clients, the Special Prosecution had no case against me. They simply had no other choice. White had to be black, just think of the consequences if I was declared not guilty. This could simply not be tolerated by the authorities after more than four years in restrictive pre-trial detention and solitary confinement.

Hundreds of investors had lost large amounts due entirely to the actions of the Danish authorities. My whole case cost tens of millions for the Danish taxpayers with members of Bagmandspolitiet travelling all over the world.

The fact that Bagmandspolitiet and the Danish authorities had no choice as to their “interpretation” of the companies (SCE) standard business terms with regards to these deferred margin sales of precious metal and that that interpretation had had nothing to do with the law, was abundantly clear.

When I instructed our business terms to be legally drafted a few years earlier, it was a pre-requisite that SCE did not have a legal obligation to hedge or buy at any time, since this would have prevented us from making a big profit when the opportunity came. Such an opportunity did come along in the months before and after my arrest.

It is a fact that SCE acted as principal in all transaction with clients and had at no time any obligation to balance its books (match the sale by buying), nor buy precious metal or any other commodities according to the sales on margin. Neither did we have any obligations with regards to our stock. We did have an obligation to deliver such purchases when the clients gave us notice and we then had up to six weeks to deliver after the clients had paid all the outstanding amounts (principal, interest and sales tax).

All the clients who had left precious metals with the companies (uncollected) could, by giving us forty-eight hours’, notice collect their precious metal or coins.

Most precious metal and commodity companies are, at any given time, short or long in the market. This is really how they make money; selling high and buying low. Knowing that the market in precious metals would crash, no professional trader would go in and buy with the view of selling at a higher price.

When a commodity like precious metal doubles and trebles in price, dealers will always await a reaction (the so-called technical reaction) before they would consider going into the market and buying. After September 1979, most professional traders expected such reaction – and quite rightly. The floor brokers at Comex (New York Commodity Exchange) were short by more than seven thousand contracts of silver when I was arrested. These floor brokers had the power to change the rules of the game to their advantage; which they did.

With regards to the lies that SCE (the companies) were giving advice to clients, telling them when to buy and sell in the month prior to my arrest, is a total lie. We stopped sending out our SCE Market Report many months before the raid on the companies since we did not want to show any subjective advice. We let the media do the talking, after all, the media (from television to newspapers), showed images of investors all over the world standing in long lines trying to buy gold and silver. The media did the selling for us and we just had to sit back and take orders from keen buyers who were greedy to buy gold, platinum and silver. I did not order what Goldman Sachs did, sell investments to our clients, when we were selling the same investment. Goldman Sachs was a bank, we acted as a trading company issuing contracts as principals.

When I was interviewed by radio or on television I was careful not to tell people to buy precious metal, only making references to the many experts that had predicted higher prices in precious metals – which were, after all, a fact.

As to bankers giving advice, we have seen recently that respected investment banks, as mentioned above, such as Goldman Sachs told their clients to buy something when they, in fact, themselves were selling it; nothing wrong in that. However, we do not expect that from a so-called prominent bank.

Investment consideration can also relate to time if you want to take a short or long term view. Many times I have sold something, even though I believe the price will go up in the long-term, with the view to buy it cheaper in the short-term. Moreover, no one has a crystal ball; this is how the investment industry operates.

My defence lawyer Korsø-Jensen, a respected business lawyer, said to the Court:

“All the clients losses were created by the closing of the companies and the actions by the Special Prosecution, they are responsible for all the clients economical suffering thereafter.”                        (Børsen 18th June 1981).

Until Bagmandspolitiet closed the companies and my pre-trial punishment in solitary confinement, the companies had fulfilled all their obligations. Moreover, my companies and I were all solvents.

To have been subjected to such serious injustice is one of the worst pains for any human being to suffer through.

“The Danish National Bank, the Ministry of Trade, the Company Register and Copenhagen tax authorities all conspired against Hauschildt and the companies whilst using the involvement of the Ministry of Justice, the Special Prosecution and court as henchmen”

– Advocate Folmer Reindel to the City Court

The fact that fewer injustices take place in Denmark (in proportion to the population) than in most other countries does not rectify the injustices which do take place.

Some countries have the greatness to admit when injustices are discovered, such as the United Kingdom, with the Guilford Four, the Maguire Seven, the Bridgewater Three and the Birmingham Six. Some of these people had spent more than 18 years in prison before their injustice was quashed by the court of appeal.

Unfortunately, I do not believe that Denmark has such strength and greatness. Denmark is a small society which prides itself on being better than others, a place where injustices do not exist.

Life for me today has come to a stage where almost everything – all external expectations, all pride, all fear for embarrassment or failure – falls away in the face of death, leaving what is truly important. I have never been the same human being again since being in solitary confinement for three hundred and nine days.

This solitary confinement affected me very badly; after more than thirty-nine years I still suffer badly on most days from this torture. My life stopped during that solitary confinement and consequently, I have since lived my life as a totally different person.