I’ve got one with a business model I haven’t seen mentioned yet: This was late 90s, and my friend needed a pair of ridiculous hooker heels for a costume. She found this shoe store she wanted to try, and when we got there the door was locked, with a ‘please ring bell’ sign. She did, and after a minute this sketchy-looking middle-aged guy unlocks the door, opens it just enough to stick his head out, and asks what we want. My friend explained that we were there to look at shoes (uhh, duh?), and the guy tells us that this is a “new age” shoe store. Apparently, that means he’s going to charge us $20 just to go into the store, and if she buys anything that $20 will be applied to the purchase. We looked at each other, turned around and left.
I always thought this could be a good front. They could just claim that a thousand girls came to the shop this month but didn’t buy anything, so that’s where $20,000 in cash came from, with no book-keeping needed.
There used to be a small shop in town that sold oriental rugs and fake designer handbags from China. The man behind the counter was an Iranian who could barely speak English-he never wanted to sell you anything, and when asked a price, he would quote something ridiculous. No price tags on anything. anyway, I bought a handbag for my daughter-he stuffed the cash in his pocket and gave no receipt. Never saw anybody go into the place.
I’ve posted about this place before but there is a Burger place near me that never has more than one car in front at any time day or night, just that one car. I have never seen anyone go in or out, the front door is locked and if you attempt to go in a security guard will come and unlock the door and ask what you want(are you kidding me?). He locked the door behind me, the woman at the counter said they had no burger patties just a side(this was at lunch time, I left and the door was unlocked and then locked again behind me.
That was about a year ago, the place is still there with the one car in front, I assume the security guard and the woman behind the counter are still in there.
I don’t know what is up with that place but it is something.
*My wife doesn’t understand my fascination with these places, she is like if it is obvious something shady is going down why the F would you want to bother them?
I don’t understand why a place like this would even go to the trouble to pretend to be a legitimate business if they’re not even going to make a real effort to be convincing. Why not just make it look like some sort of office with a sign like “ABC Inc.” or something without any real indication of what sort of business it might be? At least no one would wander in and want to order a hamburger.
The ones about locked doors, ringing bells, security guards, etc are definitely fronts. But they are so obvious I wonder why they haven’t been shut down yet, if they’ve been around long.
I have always thought that most of the storefront churches up and down places like Pico Avenue are “fronts” in a way, but not because the church leader is taking in huge amounts of cash somehow, and is living the high life.
Rather, I just believe that those kinds of churches really have no theological or community-based reason to exist. They are never particularly differentiated from one another, and, really there is no reason for a person to choose to start their own church when two-and-a-half blocks up the street there already is one exactly like it–(essentially Evangelical Christian, with a handful of attendees).
I’m pretty sure they are just operations that are started by people who would otherwise be unemployed, and attended by people who have little reason to choose one over another. The pastors who start these churches are not actually doing it as a front–or even disingenuously–they’re just people who don’t know how else to make a living.
That’s the Feds. It’s possible that some states may have more rigorous requirements, but I would be willing to bet that there are plenty of states which don’t.
Hah… you’d be surprised at what absurditiae church people can get really, really wound up about.
My parents went to a Baptist church up the street for a while, up to the point when in Sunday School, my dad got all consternated because they were talking about some bible passage, and Dad had a different version than another guy, and the other guy chimes in and says “Well MY bible says “WENT” not “TRAVELED”” or something equally stupid.
Dad decided that he’d had enough at that point and went back to the Church of St. Mattress. I suspect that more devout worshippers may well start their own churches over such things if it happens often enough.
It’s possible that it’s a front for a police sting operation and the people in the store were LEOs waiting for someone to come in and order the Double 8-Ball with a side of unregistered automatic weapons.
There’s a tiny Chinese restaurant next to work that always seems to be closed-no coworker has ever eaten there, we never see customers, but they’ve hung on for 4 years.
I’ve been reading this thread and can’t understand how it got this far without someone pointing this out.
You have no obligation to open a business that works with the public. There are tons of businesses out there that are not dealing with the public. Why on earth would you run a gambling operation out of a pizza shop (that didn’t really sell pizza) - vs a - I don’t know - say “ABC inc” to use your example. I have worked in office parks where we only basically did programming out of that building and help meetings. There were other companies that did business with the public. We did not - and you couldn’t get in without a badge & code. Why on earth would you put something on there that invited scrutiny.
Especially since in the search warrant application it will end up reading something like -
“123 elm street has a sign out front that say pizza delivery. I, acting in my undercover capactity, went to this shop on Jan 23, 2013. The door was locked. I knocked and someone came out and asked what I wanted. I said I was hungry and wanted a pizza. The individual told me they were out of pizza and closed the door.”
Why go through all that when you could just answer the door as ABC inc and say “we are a private company and don’t deal with the public”?
I have always understood fronts to be like the car wash on breaking bad. What good is it to have a “front” if you don’t actually pretend to run the business. There is no law that says you have to have a store. You could run it out of a PO box, but that isn’t going to fly in some case, but a store with no customers (that isn’t running a wedding/b to b business) isn’t really a good “front” as it won’t survive a cursory inspection.
I’ve seen some places like this - and none of them strike me as criminal masterminds.
Because that would defeat the purpose of a front/laundry operation.
A prostitution/gambling/drug front that doesn’t deal with the general public would have to explain why a large number of people, some of whom are known to be criminals/drug users/johns, go in there at any irregular hours. If it’s a pizza place or such, you have a plausible reason.
A money laundering business will preferably deal in the kind of operation that mainly uses cash and deals with consumers. The cash portion is obvious since that leaves less trails than alternatives. The consumer portion comes in because if, say, you try to launder money as a B2B firm, every dollar of revenue you claim to come from your business customers should have its counterpart as a business expense in the accounting paperwork and tax filing of your purported customers. That can be checked rather easily. That’s not the case when you sell pizzas to consumers.
Perhaps giving shitty service is the way they’ve found to make sure you don’t come back.
A shitty pizza parlor you don’t ever want to come back to is plausible. An ABC inc. office that answers with “We don’t deal with the general public” won’t be a plausible front, especially if police record that response.
I get what you are saying, but it still doesn’t make sense.
Yes - a business that deals in cash has a plausible excuse for bringing in lots of cash and depositing it. But where would the scrutiny come from:
The bank. Most legit businesses that have cash operations deal with a local bank. I have probably been involved with a dozen or so as an employee - and the bank was always less than a mile away. A bank has employees. That eat pizza. It seems to me you are more likely to get suspicion from having this semi - fake front - then no fake front at all. I can open up a bank account with “DataXs Pizza” and not have a store at all. Suspicious - sure, more suspicious than a supposedly cash pizza that doesn’t seem to want customers? I don’t think so, but I could be wrong.
The IRS. Again - you can open a business with little - I have opened several - and well it is easy (maybe not to do it correctly). You have code you use - I forget the name - but it is basically a business type code. You pick it - the IRS doesn’t . The IRS is only a problem if they start an Audit. This is only done in less than 1% of cases. If you have a lot of cash - the IRS doesn’t really know that until they look at your bank records. Now I haven’t been audited by the IRS, but I have by a state agency. Guess where they met me? My business. Now if they are real organized - they probably could get stuff into shape. Let’s say they do. What happens when the IRS shows up? My guess is they hear every other customer say “wow you are open, I walk by here every day and have never seen a sole in here!” I don’t think that works. I could be wrong. Maybe they don’t show up at all - which again would suggest not needing a physical store. If they have a physical store - I’m guessing many of the yelp reviews will not be great - and an agent can search this in like 2 minutes.
State agencies. In my state they have an old guy (I’m guessing he is dead now) go around and check to see if you have a sale tax permit posting. I’m guessing it is one guy since I saw the same guy in various places around the county :). My point isn’t that this guy is going to cause a problem, but there are others like him in various agencies that stop by from time to time. I’m guessing the physical store is MORE likely to raise questions than help.
Tips from neighbors/police - to me - it is much more likely that this business will raise suspicion rather than put it to rest.
Your point about the prostitution business not working as an office thing is totally valid. I happen to know a great deal about how these places work - um for research - and none of them run out of pizza shops - the only places they use as fronts are spas/massage parlors and bars. Virtually all prostitution in the US runs either on the street (guys pick up street walkers and have sex in their car) - Internet (guys meet at hotel or girl comes to his house) - Make shift apartments and spare rooms (sometimes five or more rooms will be set aside in a business or apartment) - none of the businesses that do this that I know of were open to the public. Again - there could be some going on, but I can assure you it would be very, very rare as a percentage of acts that take place.
Drug dealers also generally don’t have people coming and going usually. They deliver or meet out on the street. If the police are monitoring a place - it does not look less suspicious for me to be turned away for a pizza - while a local addict is not. The first thing they will do when investigating a place that is open to the public is send someone in under cover as a customer. If the police are monitoring either ABC or the Pizza place - they would have to be the dumbest cops in the world not to know what is going on (assuming they can ID the people as in your example). Drug dealers in most major cities do not keep the stuff on them. They don’t want to be caught with the stuff. In fact the organized ones you don’t even meet at the same place. Sometime - you don’t even give your money to the same person that you get the drugs. It depends on their level of paranoia, but the more organized they are - the less likely they are to use a system that involves meeting them at a place they store drugs.
The gambling thing is the only one of these that IMHO is plausible - and there have been cases where people have run stuff like this out of legitimate businesses. The key here being legitimate. In my mind it makes little sense to have a - say bank of video poker machines downstairs and use a store front - and to allow just some customers in. That to me seems more suspicious than something where you are not advertising to the public.
There are plenty of places - even in busy sections of manhattan that have businesses that are appointment only. You have to be buzzed in or whatever, but other than a label next to the door bell - you have no idea what they are. I can go in there and it doesn’t look suspicious. Maybe it does to the neighbors, but they have no idea if I am a customer, employee, just visiting. The fact that there is no info seems like a benefit to me. If they know it is a pizza shop - and they live close enough to notice who is coming and going - they live close enough to have tried to buy pizza. That just seems way, way more suspicious to me.
I am not saying these businesses aren’t fronts. I am saying that if they are fronts they are doing it wrong. I think the advantage to being a cash business only makes sense if the person is subjected to scrutiny. You absolutely will not get in trouble depositing tons of cash the vast majority of the time. You only tell the IRS very basic summary type info. They don’t ask for receipts or almost any supporting data. You only get that if you get audited. You only will get in trouble if you trip a flag somewhere or if someone calls and they do an investigation. Then it makes total sense. But it has to look legit. If the IRS comes to your business - it will not look legit.
Perhaps I am missing something, but the ONLY way I see this making sense is if the only thing the IRS does is start an investigation and see that you have a physical location and then say “well that’s enough for me”.
Now there are plenty of stupid criminals out there. Plenty of people who think they can ask a cop “are you a cop” and they think that they have to tell you the truth. So I guess I can buy some of the people are doing this for tax or other reasons. I just feel they really should do a better job of trying to look innocent.
Could well be an actual jeweler, rather than a good jewelry-store-operator. Most of these guys operate out of small offices in large buildings, and they work as contractors doing the actual work for large jewelry stores, but perhaps there’s not a hard and fast line – particularly if he learned his trade in an asian country.
I would image this is only because widespread fraud and money laundering is not currently an issue with churches. If this were to change, I would expect more scrutiny. As it is, I hear about pastors getting arrested all the time, so somebody is paying attention.
I almost forgot about one business that was kind of a front. My dad used to work for the guy, his name was Ted. He owned a roofing business, and used it to meet people and make clients for his illegitimate purposes: prostitution. He finally got busted a while back and was in the daily paper. I wish I had a cite for you. He offered prostitutes to both his employees and his customers. He actually did real roofing too, but I bet you anything he ran a few repair jobs for “friends” and laundered money from his prostitution or something like that. My dad was personally offered a girl or two for something like “300 an hour” if I remember my dad telling me the story correctly. He couldn’t afford it
I’m not sure to what extent his roofing business was a front for his prostitution business. I mean he really did a lot of legitimate roofing. Enough to keep my dad employed for a while, that’s for sure. But I’m betting a lot of dirty money got circulated around through that business.
That being said, if a front does a lot of legitimate business, is it really a front? Or a side operation? Or what?
I noticed a sex shop earlier that had one of those security bars at the front that’s meant to detract ram raiders. You usually only see them around here on jewellery shops.
Another of those Chinese buffets-this one is really run down. I never see anybody enter I…one day I took a peek inside-the trays looked like they had never been cleaned. in each was a small portion of dried out food-wilted veggies, and old looking meat. Either they poisoned their customers, or the place is a front.
