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  #51  
Old 06-25-2016, 11:25 AM
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Let's say you just want to live a moderate upscale lifestyle - you "make" $290,000 a year. That means you have to buy and then deposit in Mexico 100 of these $2900 MO's each year.

First, you must explain where this money came from on your tax return - gift, earned (why?) or asset withdrawal.

But you don't have a $10M deposit in the Mexican bank so it can't be withdrawal - plus, you MUST report large foreign asset holdings. The Mexican bank will cooperate with the feds (they have no choice) and will report that the money comes from those money order deposits, which the feds trace back to bought a bank near your home.
I was assuming you're a Mexican national, working for the cartels. No taxes, no reporting from the bank.
  #52  
Old 06-26-2016, 11:21 PM
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I was assuming you're a Mexican national, working for the cartels. No taxes, no reporting from the bank.
You seem to assume quite a lot about México. Our accounts are monitored and we have strict reporting regulations and if our deposits are larger than we declare on our tax forms we will be audited by SAT, our IRS.
  #53  
Old 06-27-2016, 12:16 AM
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How effective is the "I went to Vegas and won a lot at the tables" justification?


So far, we've got bars, restaurants, vending machines as good fronts. What else tends to be popular?

I note that those businesses tend to 1) deal with the public in lots of small transactions, 2) sell common objects rather than services, 3) often have high markup on the goods sold. Am I missing anything else?
I've often heard that the art world is hugely mixed up in money laundering. Art is basically the ultimate in arbitrary and nonsensical value. If I buy a bar of gold, for instance, the authorities can easily check whether the price I claimed matches the market value for the product. Art is entirely in the eye of the beholder. A person might pay literally millions for any stupid bullshit if they think it is artistic, or it comes from a famous artist, or it was owned by a famous person at some point. There is no objective measure for what a certain piece "should" cost, so the authorities have no way to assess what price is legitimate.

(And not to rag on artists, but I've seen some pieces of art that I would pay someone to throw away get sold for tens of millions of dollars. So I can see why it would be attractive to money launderers.)
  #54  
Old 06-27-2016, 01:07 AM
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I've often heard that the art world is hugely mixed up in money laundering. Art is basically the ultimate in arbitrary and nonsensical value. If I buy a bar of gold, for instance, the authorities can easily check whether the price I claimed matches the market value for the product. Art is entirely in the eye of the beholder. A person might pay literally millions for any stupid bullshit if they think it is artistic, or it comes from a famous artist, or it was owned by a famous person at some point. There is no objective measure for what a certain piece "should" cost, so the authorities have no way to assess what price is legitimate.

(And not to rag on artists, but I've seen some pieces of art that I would pay someone to throw away get sold for tens of millions of dollars. So I can see why it would be attractive to money launderers.)
But art and consulting are ways to pay bribes, or pass someone money. The person who wants to pay you presumably has a pile of legitimate money in the banking system already. (BTW IIRC congress and senate members are not allowed to get consulting fees and even their speaking fees are strictly controlled?)

The problem with illegal activities (bookmaking, drugs, protection racket, armoured car heist, whatever) is that you end up with the proverbial pallet of cash bills. This is what money laundering is for - convert this into seeming legal income in a bank account. If you can dream up a way, so has the IRS. Most methods are hard to do on a regular basis and will attract attention, and/or require an army of dupes and possibly a compliant financial institution, because somewhere you have to deposit thousands of dollars a month into a bank. This might work if you're the Mexican cartel and can threaten low-level employees, but even then, any institution south of the US border consistently moving large sums of US dollar bills is going to attract the attention of two federal governments. At that point, they don't have to prove money laundering - they just follow and seize all suspicious money - freeze bank accounts - until a proper accounting can be done by the involved parties.

If you remember the series Weeds, they ran a bakery as a front for a while. However, it would have suffered from the same problem as the linked article - there was nowhere near enough customer traffic to justify the income. And of course, Hollywood thrillers notwithstanding, it's very rare that the police do not eventually learn the people behind even a medium level drug distribution - everyone talks, they just need evidence to get them. Once they have a target, they start digging and "where's the money?" is the first question. Fortunately, in a comedy, that is an irrelevant detail.
  #55  
Old 06-27-2016, 01:18 AM
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I read somewhere that the Secret Service and the DEA have a program to track serial numbers of all larger bills - 50's and 100's. They monitor where they last intersected a US bank. So if suddenly, say, regular amounts of $100 bills from one city - say, Chicago or Minneapolis or Buffalo - start appearing in shipments returning from a specific bank in Mexico, that will give them a starting point. Since a lot of businesses tend to deposit their receipts nightly, bills - especially larger denominations - probably circulate in and out of banks regularly. Plus, in the age of plastic, cash deposits for most businesses are probably way down.

The DEA has identified "cut off the money" as a prime means of attacking organized crime. yes, the lower-level pawns can survive on cash, pay $3,000/month rent for an apartment cash, pay your $1,000 car payment cash, pay your bar and restaurant bills cash, nothing close to $10,000 - but still, it's hard to buy a Ferrari or a big mansion with cash.
  #56  
Old 06-27-2016, 12:05 PM
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I read somewhere that the Secret Service and the DEA have a program to track serial numbers of all larger bills - 50's and 100's. They monitor where they last intersected a US bank. So if suddenly, say, regular amounts of $100 bills from one city - say, Chicago or Minneapolis or Buffalo - start appearing in shipments returning from a specific bank in Mexico, that will give them a starting point. Since a lot of businesses tend to deposit their receipts nightly, bills - especially larger denominations - probably circulate in and out of banks regularly. Plus, in the age of plastic, cash deposits for most businesses are probably way down.

The DEA has identified "cut off the money" as a prime means of attacking organized crime. yes, the lower-level pawns can survive on cash, pay $3,000/month rent for an apartment cash, pay your $1,000 car payment cash, pay your bar and restaurant bills cash, nothing close to $10,000 - but still, it's hard to buy a Ferrari or a big mansion with cash.
So, if you aim to live like this (http://cdn.traileraddict.com/content...985-poster.jpg ) 2 or 3 orders of magnitude milder, you should be fine?


If someone decides to retire once he has a pallet of cash and live on that, would he have problems? Would investing in the stock market attract attention by itself?

Is the problem for most criminals that once they have 1 pallet of cash, they want another and another and that paying rent/mortgage on a good-but-not-luxurious place and car and paying ordinary bills isn't enough for them, it has to be a villa and some sports cars?
  #57  
Old 06-27-2016, 02:09 PM
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most stock market investments, you buy stock through a broker. Rarely are brokers paid in cash - that would attract attention. They hold the stock for you, issue the necessary forms for income tax purposes (losses, capital gains, etc.) So there are two problems right there - attracting attention by paying in cash, or wandering into a bank to pay top up your account to pay your broker; and explaining to the IRS where you got the cash to invest in the first place. The faster your trickle in that pallet of money, the harder it is to hide it. If you have 50 bank accounts - well, IIRC you need your social Security number to open them, so that too might attract the attention of the IRS.

it may be a comedy, but Brewsters is the opposite of money laundering. The guy has a legit source of cash so the one problem he does not have to worry about is the IRS.

The problem still is - how do you afford a lifestyle without attracting the attention of the IRS? If you buy a Ferrari for cash, the dealer will tell their bank who gave them the cash when they deposit it, and it will be reported. Buy a car on credit and make time payments? Why would they give you credit if you have no visible income?
  #58  
Old 06-27-2016, 03:24 PM
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There was an old Burt Reynolds movie where he played a professional burglar. He had two methods of cleaning his money, both of which seem reasonable- first, he makes and sells scrap metal art from a roadside stand- which is perfect, because he can keep minimal records and who's to say what someone paid or even who bought it? Second, he visits the track, ignores his losses and declares his winnings as gambling income.

Also, there was an NPR story several years ago about an FBI agent who went undercover posing as a money launderer. He recounts being contacted by a drug dealer who wanted to launder a million dollars. The problem was that the money was in one dollar bills, and filling most of his basement. He said he told the man to kill himself, because that money couldn't be spent and couldn't be cleaned.
  #59  
Old 06-27-2016, 04:07 PM
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You seem to assume quite a lot about México. Our accounts are monitored and we have strict reporting regulations and if our deposits are larger than we declare on our tax forms we will be audited by SAT, our IRS.
And many of your bank employees are either in the pay of the cartels or will do anything they demand due to fear of finding the families heads in a bag.

Same with your Judges, Elected Officials and LEOs.

And, can we really blame them for the later? That's pretty scary.



http://www.bbc.com/news/world-latin-america-35865948
Transparency International's most recent corruption perceptions index lists Mexico, at 95th, as the most crooked of all countries in the OECD club of industrialised nations.

http://www.huffingtonpost.com/news/mexico-corruption/


https://news.vice.com/article/mexico...on-are-failing
  #60  
Old 06-27-2016, 04:09 PM
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The problem still is - how do you afford a lifestyle without attracting the attention of the IRS? If you buy a Ferrari for cash, the dealer will tell their bank who gave them the cash when they deposit it, and it will be reported. Buy a car on credit and make time payments? Why would they give you credit if you have no visible income?
It's funny, when I was working there in CA, there was one cute little car that sold for just under $10K. It was really popular among all the Dealers as they could buy it with cash.
  #61  
Old 06-27-2016, 04:12 PM
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The main problem, of course, is that as soon as you start feeding cash to the banks in any large quantity, they will file a report. The banks (and bank managers) are paranoid about being accused of complicity in money laundering; so better to file a report and let the Treasury decide if you're worth investigating. After all, it costs the bank nothing. Unless you have a very plausible source for your income that will assuage the bank manager, you will be flagged.

Selling art might pass as a valid form of income. However, how many people pay, say, $250 cash for a chunk of art, instead cheque or credit card? How many pieces do you have to sell to make a comfortable living? Does that level of income pass the smell test? If the feds get suspicious, then can stake out the stand and see what the business really is like.
  #62  
Old 06-27-2016, 04:20 PM
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If you're the Mexican cartel, you have no problem laundering money. You can run entire chains of fictitious enterprises and generate all the car repair or bakery or Pizza or fast food businesses you want; there will be no shortage of peons to fill the ranks of the fake businesses, or to be the managers. The money will roll in; and you pay the help at south-of-the-border wages.

The problem is, what do you do if you are a solo freelancer or a small-time operator, and are situated in a medium-sized US town?
  #63  
Old 06-27-2016, 04:41 PM
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How effective is the "I went to Vegas and won a lot at the tables" justification?
It's been an issue over here. There are Fixed Odds betting machines which can take £100 (cash) a draw, and people have been using them to launder money.
  #64  
Old 06-27-2016, 05:24 PM
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It seems to me that, in order to successfully slip the ill-gotten cash into your legitimate profits in a convincing manner, your legitimate profits would have to dwarf your illegitimate profits, so why bother with the illegal stuff? If you can run a business that's successful enough to hide the cash from selling drugs or whatever, then why take the chance of also selling drugs?

If you can't run a successful enough legitimate business then you can't launder the money. If you can, then you don't have to launder any money. What am I missing? Do people sell drugs, run bookmaking operations, or whatever, simply to increase their bar profits 10% or 20%?

Last edited by davidm; 06-27-2016 at 05:24 PM.
  #65  
Old 06-27-2016, 05:51 PM
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It seems to me that, in order to successfully slip the ill-gotten cash into your legitimate profits in a convincing manner, your legitimate profits would have to dwarf your illegitimate profits, so why bother with the illegal stuff? If you can run a business that's successful enough to hide the cash from selling drugs or whatever, then why take the chance of also selling drugs?
Nah, in real life money laundering enterprises are pretty-much always deriving the vast majority of their revenue from illicit activities. The goal is to do it in such a way that the revenues reported from such a business are not orders of magnitude out of line for what a legitimate business of that sort might earn.

But any such enterprise will become obvious with just a little scrutiny. You just can't justify fake transactions, even with perfect paperwork, if the cops stake out your place and say you had three customers in two weeks.

So the idea is to fly under the radar as much as possible.
  #66  
Old 06-27-2016, 06:16 PM
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It seems to me that, in order to successfully slip the ill-gotten cash into your legitimate profits in a convincing manner, your legitimate profits would have to dwarf your illegitimate profits, so why bother with the illegal stuff? If you can run a business that's successful enough to hide the cash from selling drugs or whatever, then why take the chance of also selling drugs?

If you can't run a successful enough legitimate business then you can't launder the money. If you can, then you don't have to launder any money. What am I missing? Do people sell drugs, run bookmaking operations, or whatever, simply to increase their bar profits 10% or 20%?
A bar that takes in, say, $1000 a night might just barely cover overhead expenses (rent, utilities, salaries, licenses, furniture). Once all the overhead is covered, any extra money only needs to cover variable costs to make a profit.

So, if all a bar takes in is $1000 a night, it might just break even. If it takes in $2000 a night, it might make an $800 profit.
  #67  
Old 06-27-2016, 07:22 PM
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Okay. So they have to inflate their profits quite a bit, which is how they can end up being caught.

You really have to stay way under the radar and attract no attention at all. Either that or pay off the locals, which I suspect is one way they get away with it.

Last edited by davidm; 06-27-2016 at 07:23 PM.
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Old 06-27-2016, 07:33 PM
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Back in the early 1970s I worked at a drive-in theater where money was laundered. A company bought the place and started paying more for the food and candy. I thought that was strange. Then one winter night I had sold about 50 tickets. Later that night I noticed that the manager marked down 105 tickets sold. WTF? I figured him the type to mark down 40 and take a cut for himself. He swore me to silence and told me about the money laundering. Said that I could get killed if I blabbed. Then the higher prices for the candy and food started to make sense. That company was also part of the scheme.
  #69  
Old 06-27-2016, 08:30 PM
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Like many criminal enterprises, the lazy and stupid go quickly. I know of several ways to clean some fairly large amounts of money that from an IRS standpoint are almost impossible to track, and easily explain away large volumes of small bills. It would also be a solid 50 hour a week job to scrub 10-20k a week gross.

I discussed it with my mom (who has worked in IRS criminal investigations) according to her there is no reason to believe that my methods would trip anything on their radar. It might not survive a full blown 6 month stakeout, but it would take massive investigative resources to pin down and bust.
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Old 06-27-2016, 08:44 PM
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If you can't run a successful enough legitimate business then you can't launder the money. If you can, then you don't have to launder any money. What am I missing? Do people sell drugs, run bookmaking operations, or whatever, simply to increase their bar profits 10% or 20%?
Even a very small businesses like mine can have $12-$15k a month. If with a little bookeeping magic i could put another $2-$3k a month in my pocket? While having a few extra subcontractors and or a fake employee.

Last edited by drachillix; 06-27-2016 at 08:46 PM.
  #71  
Old 06-27-2016, 09:17 PM
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The IRS has extensive and accurate financial profiles about the way most legitimately run businesses (of all kinds) operate. They will tolerate some horsing around when dealing with cash business like convenience stores etc. but there are limits and if you get greedy and step over the line they will pounce.

As others have noted it's very difficult to throw a lot of cash around even in bite sized chunks without eventually getting noticed. A part of this is just common sense. Why is person X always paying bill Y in person in messy cash bills that most people pay with less hassle with checks, credit cards or automatic bill pay from their bank accounts? If you have people doing things that are counter-intuitive or illogical it eventually gets noticed. If you have businesses that usually generate $5000 a week in sales doing 25000 a week it gets noticed.

You might ask "How would anyone know?" In many cash businesses an experienced owner can look at the sales of an individual item (say convenience store and gallons of milk sold) and tell you with 95% accuracy what the net profit of the store should be. Things follow logical patterns. It's not a mystery. The IRS also has this info.

People are hiding cash income all the time the IRS is basically in the position of deciding where it wants to focus for the greatest return. They value their time just like you value yours.
  #72  
Old 06-27-2016, 09:19 PM
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Small scale, but a guy I grew up with paid the owner of a bar $1600 per week, in cash. He got a check for $800, and business cards that said he was the manager. As far as I know, he never got caught. He died 30 years later, broke, on disability.
  #73  
Old 06-27-2016, 09:20 PM
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Like many criminal enterprises, the lazy and stupid go quickly. I know of several ways to clean some fairly large amounts of money that from an IRS standpoint are almost impossible to track, and easily explain away large volumes of small bills. It would also be a solid 50 hour a week job to scrub 10-20k a week gross.

I discussed it with my mom (who has worked in IRS criminal investigations) according to her there is no reason to believe that my methods would trip anything on their radar. It might not survive a full blown 6 month stakeout, but it would take massive investigative resources to pin down and bust.
Maybe, depends on how you spent it. Hookers and blow- until you got arrested, very hard to spot.

But cars and real property? It's easy to do a Source & App or a Cash T and show a shortcoming on that much gross income. $1000 a week and they'd likely never spot you. 20K? That's $240K a year. Now if your gross was $1MM, it'd be not that hard to hide.

However, criminals are lazy and Easy Money runs thru your fingers like water. You would never limit yourself to what was hard to spot. You'd figure (Hey I got away with it this far, so double that would work... and double that.... and so forth.
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Old 06-27-2016, 09:25 PM
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Like many criminal enterprises, the lazy and stupid go quickly. I know of several ways to clean some fairly large amounts of money that from an IRS standpoint are almost impossible to track, and easily explain away large volumes of small bills. It would also be a solid 50 hour a week job to scrub 10-20k a week gross.

I discussed it with my mom (who has worked in IRS criminal investigations) according to her there is no reason to believe that my methods would trip anything on their radar. It might not survive a full blown 6 month stakeout, but it would take massive investigative resources to pin down and bust.
As long as you don't get noticed this is possible but a lot of tax criminals who are being low key are turned by business competitors who know their numbers or procedures aren't right, and just want them out of the way. There are lots of people ready to tattle on you if you are competing for clients with other legit business. You pay for all your goods in cash the delivery guy will probably mention this to your competition just in conversation. Then he thinks about it decides it's hinky and eventually you're screwed.

Last edited by astro; 06-27-2016 at 09:30 PM.
  #75  
Old 06-27-2016, 09:31 PM
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How effective is the "I went to Vegas and won a lot at the tables" justification?
I think the opposite is more effective. Owning a casino lets you claim large amounts of income from unverifiable sources.

You own a casino where your legitimate customers are paying in $1,000,000 a week. You throw in another $500,000 a week. You're not a restaurant or a bar that has to account for the inventory you used. You just claim the customers you had bet more than usual. The IRS isn't keeping track of the customers who are losing money.
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Old 06-27-2016, 09:34 PM
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As long as you don't get noticed this is possible but a lot of tax criminals who are being low key are turned by business competitors who know their numbers or procedures aren't right, and just want them out of the way. There are lots of people ready to tattle on you if you are competing for clients with other legit business. You pay for all your goods in cash the delivery guy will probably mention this to your competition just in conversation. Then he thinks about it decides it's hinky and eventually you're screwed.
Or your ex-wife or ex-GF. Or your confederate who needs a deal, badly.
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Old 06-27-2016, 11:41 PM
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Lets distinguish between a contractor or some such businessman skimming some cash off the top or doing jobs under the table. This is just tax evasion. Money laundering is when you acquire a wad of cash pretty much illegally and need to make it look like real income. A good tax evader will of course leave enough legitimate income to account for the basics or fake business expenses. A person with an illegal cash income - say, drug dealer, chop shop operator, etc. - needs to find a way to make the income look legit.

As has been beaten to death already - you can trickle cash into a legitimate enterprise and inflate the receipt, provided you don't overdo it - and as long as the feds are not interested in deeply scrutinizing you.

Unless your business is international jewel thief and you only do one job a year, you would either be working overtime doing both your criminal and front jobs, or would have to involve someone else (or several someones) to run the front for you - and they also want to be paid to accept some risk, thus significantly increasing your cost.

the only thing that might save you or postpone the inevitable is priorities - that the IRS is probably more interested in guys with $50M overseas than some guy who appears to be laundering $150,000 - unless you make it real easy for them.
  #78  
Old 06-28-2016, 11:02 AM
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A few years ago, I rented a house from an older couple, who liked to be paid with a cashier's check. So, once a month I went to my bank to get the check, and the bank made it very difficult. I had to sign repeatedly, show multiple IDs, et cetera.

I guess they were suspicious (although of course it was 100 percent legit)
  #79  
Old 06-28-2016, 09:09 PM
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And many of your bank employees are either in the pay of the cartels or will do anything they demand due to fear of finding the families heads in a bag.

Same with your Judges, Elected Officials and LEOs.

And, can we really blame them for the later? That's pretty scary.



http://www.bbc.com/news/world-latin-america-35865948
Transparency International's most recent corruption perceptions index lists Mexico, at 95th, as the most crooked of all countries in the OECD club of industrialised nations.

http://www.huffingtonpost.com/news/mexico-corruption/


https://news.vice.com/article/mexico...on-are-failing
Try again. Do you think these people are acting out of fear of the cartels? Or just greed?

https://www.theguardian.com/world/20...ico-drug-gangs

http://www.huffingtonpost.com/avinas...b_4619464.html

https://www.bloomberg.com/view/artic...pass-from-u-s-
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Old 06-28-2016, 10:25 PM
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Try again. Do you think these people are acting out of fear of the cartels? Or just greed?

Try again for what? You are trying to deny Mexico is deeply corrupt?
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Old 06-29-2016, 07:40 AM
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Try again for what? You are trying to deny Mexico is deeply corrupt?
I am not saying that at all. How could you come up with that? I am saying you know nothing outside of your internet stories about Mexico. There is far more cartel money laundered in the US than there is here. And the only reason that the US isn't lower on the corruption index is because your own politicians have legislated legalized bribery.

How many of your politicians' votes are controlled by large corporations or groups like the NRA? And they will not adopt campaign finance reform. It is all about money and not the best interests of your country. How many become high paid lobbyists when they leave politics?
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Old 06-29-2016, 12:01 PM
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... There is far more cartel money laundered in the US than there is here. And the only reason that the US isn't lower on the corruption index is because your own politicians have legislated legalized bribery.

...
Don't be silly. We learn all we know about Mexico from Hollywood thrillers.

But seriously - of course the laundering is going to happen in the USA. Most of the cash from "retail" sales happens in the USA. Moving large sums of cash to a foreign country just doubles the risk - first you have to smuggle product into the USA, then you have to smuggle money out. Easier to do laundering in the local cities where the retail cash is collected. Besides, when you're talking about that level of cash flow - a foreign bank consistently accepting large amounts of US cash will inevitably trigger alarms; a US bank, less so. Better to appear to be a rich Mexican company that invests in bars and pizza places in the USA.
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Old 06-29-2016, 12:03 PM
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I am not saying that at all. How could you come up with that? I am saying you know nothing outside of your internet stories about Mexico.
Nothing? Only 20 years with the Feds and 10 years in private Industry. I am a certified expert in the field.
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Old 06-29-2016, 01:27 PM
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Nothing? Only 20 years with the Feds and 10 years in private Industry. I am a certified expert in the field.
What field would that be?
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Old 06-29-2016, 01:43 PM
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What field would that be?
Money Laundering.
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Old 06-29-2016, 02:52 PM
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Money Laundering.
Strange, your posts seem to contradict that.

Last edited by CBEscapee; 06-29-2016 at 02:56 PM.
  #87  
Old 06-29-2016, 03:52 PM
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Money laundering through bars, nail salons, and Lasertag arenas are all rounding errors compared to China's trillion dollar (estimated) yearly outflow.

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The Chinese company wanted us to represent it in a completely fake arbitration that it would lose so that it could then send $3.5 million to its own U.S. company so that — no doubt — in turn that US company could buy a house somewhere in the United States.
This article details just one of the thousands of ways the Chinese riches are getting their yuan the hell outta Dodge (and driving up housing prices in the process).
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Old 06-29-2016, 04:27 PM
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I'm still trying to get past all that Stoli being poured down the drain.


mmm
  #89  
Old 06-29-2016, 10:21 PM
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You basically got it, but the point you're missing is that the launderer is the bartender. Criminals buy or start cash-intensive businesses precisely so they can use them to launder ill-gotten gains and make them appear legitimate.

If you want to level up, you also buy the liquor store. Then you can start generating phantom bottles for your phantom shots.
Until you get audited by some wise-ass forensic accountant. Mr. Friedo. You have sales records for 5 cases of Captain Morgan but receipts for purchasing only 1 case? Where are you getting your counterfeit untaxed liquor?

While you could spoof up some extra receipts as well, you still have to make a money trail to match them and if you're already under investigation, they're going to compare your purchase receipts to your vendor's sales receipts.
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Old 06-30-2016, 01:00 AM
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I'm still trying to get past all that Stoli being poured down the drain.


mmm
There are people working for the county and the state whose jobs and promotions are dependent are policing and catching bar owners and entrepreneurs trying to skim like this. Plus you have everyone who ever worked for you and noticed how sketchy your operations are compared to the other places they worked. They get nabbed for anything serious unrelated to your business you're going to be delivered up on a platter. Being on the down low is very difficult when there are other human beings involved at any point in the process. And as Dr Deth said "Or your ex-wife or ex-GF. Or your confederate who needs a deal, badly."

Also just as a heads up the IRS and State know that at least 50%+ of bars and other non-franchise single owner enterprises are playing declared income games somewhere. They don't have to call in CSI to crack the case. They really are just deciding if it's worth their time to pursue x vs y. It's fish in a barrel.

Last edited by astro; 06-30-2016 at 01:02 AM.
  #91  
Old 06-30-2016, 07:45 AM
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Money laundering through bars, nail salons, and Lasertag arenas are all rounding errors compared to China's trillion dollar (estimated) yearly outflow.


This article details just one of the thousands of ways the Chinese riches are getting their yuan the hell outta Dodge (and driving up housing prices in the process).
Again, this is more like hiding bribery - the money is already legitimately bits in an electronic banking system - it's just a matter of finding an excuse why it is entitled to move from A to B.

The real trick to money laundering is taking illegal "retail" proceeds - very large piles of cash - and turning it into seeming legitimate bits in a bank's computer. Somewhere, somehow, someone has to take cash and put it into a bank without triggering alarm bells.

As I said, I've seen articles suggesting that between commissions and tricks like pouring good liquor down the drain, the net loss to turn cash legit can cost up to 50% of its value or more. The greedier you get, the more likely you will be noticed. Then it's only a question of whether you seem big enough to be worth the time for the IRS... or if someone else (DEA, FBI?) wants to get you.
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Old 06-30-2016, 11:19 AM
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Besides Capone, are there a lot of big criminals who got caught because of money laundering?

Did the police prefer taking that approach to get at the Mafia?
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Old 06-30-2016, 11:25 AM
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Until you get audited by some wise-ass forensic accountant. Mr. Friedo. You have sales records for 5 cases of Captain Morgan but receipts for purchasing only 1 case? Where are you getting your counterfeit untaxed liquor?
Sure. Any laundering scheme will not withstand a little bit of scrutiny, no matter how clever you are at faking your records. Even if the forensic accountant can't bust you, the mopes staking out your bar and counting the actual number of customers going in will.

So like I mentioned, the goal is to fly under the radar as much as possible. But criminals are often greedy, and things start attracting attention.
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Old 06-30-2016, 01:33 PM
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Besides Capone, are there a lot of big criminals who got caught because of money laundering?

Did the police prefer taking that approach to get at the Mafia?
Yes, indeed and "25 counts of wire fraud and money laundering" is a common thing to see.
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Old 06-30-2016, 01:58 PM
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Sure. Any laundering scheme will not withstand a little bit of scrutiny, no matter how clever you are at faking your records. Even if the forensic accountant can't bust you, the mopes staking out your bar and counting the actual number of customers going in will.

So like I mentioned, the goal is to fly under the radar as much as possible. But criminals are often greedy, and things start attracting attention.
Precisely. There are experienced owners of similar businesses who can just look at your customer traffic for a few hours over the course of a few days and tell you very accurately within a few percent what your gross and nets should be for the year. You think the IRS can't do the same thing? Beyond a certain threshold laundering is obvious. If the IRS knows that other pizza joints of x sq ft area in your county or city have between X and y sales (and they have this info) and yours are a bit high you can probably slide. You start claiming 2X or 3X sales over similar sized places they will want to know more. Laundering small chunks is a lot of work and a fair amount of risk and requires having a group of workers in your confidence.
  #96  
Old 06-30-2016, 02:02 PM
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Nothing? Only 20 years with the Feds and 10 years in private Industry. I am a certified expert in the field.
Which organization provided your certification? What, exactly, is the title of your certification?

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Originally Posted by DrDeth View Post
It's funny, when I was working there in CA, there was one cute little car that sold for just under $10K. It was really popular among all the Dealers as they could buy it with cash.
Was this before or after your 30 years of experience in money laundering?
  #97  
Old 06-30-2016, 02:19 PM
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What about businesses that sell online services (as opposed to physical goods). You don't have to show evidence of inventory, other than maybe bandwidth usage, which would be easy to fake. How do porn sites, for example, make a profit selling something that's widely available for free?

I suppose though, that it would be difficult to fake large numbers of small sales. Maybe it could be done if they accept Bitcoin.
  #98  
Old 06-30-2016, 02:27 PM
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Which organization provided your certification? What, exactly, is the title of your certification?


Was this before or after your 30 years of experience in money laundering?
ACAMs

During.
  #99  
Old 06-30-2016, 02:33 PM
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The main problem, of course, is that as soon as you start feeding cash to the banks in any large quantity, they will file a report. The banks (and bank managers) are paranoid about being accused of complicity in money laundering; so better to file a report and let the Treasury decide if you're worth investigating. After all, it costs the bank nothing. Unless you have a very plausible source for your income that will assuage the bank manager, you will be flagged.
Nope. The paranoia about complicity means the bank files a report, regardless of what they think or even know. There's no bigger nightmare than getting dragged into a case because a manager or employee didn't report something because nice old Mr. D'Agostino was a good customer or you passed by their shop and saw how busy they were so didn't think anything of it. "Report everything and let the Feds sort it out" is the mantra. Failing to report a SARs-worthy transaction is one of the quickest routes to termination.
  #100  
Old 06-30-2016, 02:36 PM
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Nope. The paranoia about complicity means the bank files a report, regardless of what they think or even know. There's no bigger nightmare than getting dragged into a case because a manager or employee didn't report something because nice old Mr. D'Agostino was a good customer or you passed by their shop and saw how busy they were so didn't think anything of it. "Report everything and let the Feds sort it out" is the mantra. Failing to report a SARs-worthy transaction is one of the quickest routes to termination.
Yep. "CYA SARs" are a big problem, brought on by inexperienced regulators.
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