# The hard part of money laundering **URL:** \ **Category:** Factual Questions\ **Created:** [June 19, 2021, 11:10pm UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654 "2021-06-19T23:10:00Z")\ **Posts on this page:** 20\ **Page:** 19
**Author:** ![Hatchie](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hatchie/32/3983_2.png) [@Hatchie](https://boards.straightdope.com/u/Hatchie)\ **Post date:** [July 12, 2021, 6:27pm UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/362 "2021-07-12T18:27:46Z")
Really? So they’re not so safe after all. Ironically, does that mean that if, say, a meteor destroys the building, the lost contents of those allegedly safe boxes won’t be compensated for (unless you sue), while depositors’ accounts are insured thus recoverable? ---
**Author:** ![Francis\_Vaughan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/francis_vaughan/32/3093_2.png) [@Francis\_Vaughan](https://boards.straightdope.com/u/Francis_Vaughan)\ **Post date:** [July 12, 2021, 8:21pm UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/363 "2021-07-12T20:21:52Z")
A safety deposit box is really just a business sideline for a bank. It isn’t part of the bank’s main operations. In particular, if you deposit money as cash in one, it isn’t available to the bank to use for its operations. The entire point of government guarantees of bank deposits is to keep fractional reserve banking reliable and trustworthy. Putting cash into a deposit box is not participating in this system, so there is no reason to guarantee it. People put all manner of things in safety deposit boxes. Things of almost any value. Banks are not going to provide insurance for the contents of a box they have no knowledge of the contents of and which may have any conceivable value. Part of the deal is usually that the bank has no idea what is in the box. ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [July 12, 2021, 10:18pm UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/364 "2021-07-12T22:18:15Z")
No, it means the bank doesn’t insure the contents and you should have the contents covered under your homeowners or renters insurance if they have monetary value. If you keep jewelry in a safe deposit box the insurance premiums are less than if you kept it at home. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [July 13, 2021, 12:01am UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/365 "2021-07-13T00:01:49Z")
> [@EnolaStraight](#): > > How about a GoFundMe page? > > Any number of anonymous individuals could channel through cyberspace any amount of monies to pay for your…whatever. It’s been a while but that was actually a [plot element in Breaking Bad](https://breakingbad.fandom.com/wiki/SaveWalterWhite.com); Walter White’s teenage son created a webpage to solicit donations for Walter’s cancer treatment, and then the page was used to launder some of the drug proceeds. ---
**Author:** ![bob\_2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bob_2/32/3341_2.png) [@bob\_2](https://boards.straightdope.com/u/bob_2)\ **Post date:** [July 13, 2021, 7:28am UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/366 "2021-07-13T07:28:46Z")
Meanwhile in London: > **The Met Police has seized a record £180m worth of cryptocurrency linked to international money laundering in London.** > > The seizure is the largest of its kind in the UK - beating the pervious record set when the Met confiscated £114m of cryptocurrency on 24 June. > > A 39-year-old woman, arrested on suspicion of money laundering on 24 June, has been interviewed over the new seizure. > > She has since been bailed. > > The Met’s economic crime command made the seizure after following up intelligence received about the transfer of criminal assets. The investigation is continuing. > > Transactions made using cryptocurrencies can provide more anonymity to senders and recipients of money. > > The Met did not say which cryptocurrencies they seized. ---
**Author:** ![Whack-a-Mole](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/whack-a-mole/32/141_2.png) [@Whack-a-Mole](https://boards.straightdope.com/u/Whack-a-Mole)\ **Post date:** [July 13, 2021, 9:24am UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/367 "2021-07-13T09:24:00Z")
Link to the story above ^^ > **[Met Police seize record £180m of cryptocurrency in London](https://www.bbc.com/news/uk-england-london-57816644)** > > The seizure is the largest of its kind in the UK - beating the previous record set just weeks ago. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [July 13, 2021, 4:07pm UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/368 "2021-07-13T16:07:52Z")
Yes, exactly. But a bank does not actually hold it’s depositors money right there in the branch. It has been lent out, invested, etc. This is why all those films where “good” bad guys steal the banks money in revenge are silly- the little bit of cash in the bank is not really the banks so much as the depositors and it is all insured anyway. So, at best you annoy the FDIC. You do not really hurt the bank. > [@Dewey\_Finn](#): > > It’s been a while but that was actually a [plot element in Breaking Bad](https://breakingbad.fandom.com/wiki/SaveWalterWhite.com); Walter White’s teenage son created a webpage to solicit donations for Walter’s cancer treatment, and then the page was used to launder some of the drug proceeds. Yeah, that’s not really how Money Laundering works. **Placement** is the hard part, putting _cash_ into the system, and GoFundme does not involve cash. I suppose it could be used for **layering** but there are much better ways to do that. ---
**Author:** ![Melbourne](https://avatars.discourse-cdn.com/v4/letter/m/b5e925/32.png) [@Melbourne](https://boards.straightdope.com/u/Melbourne)\ **Post date:** [July 14, 2021, 12:09am UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/369 "2021-07-14T00:09:06Z")
> [@DrDeth](#): > > defines _currency_ as coin and paper \*money. The language is unusual, I wonder if ‘paper money’ includes more than USA federal notes? Foreign currency, private company notes, etc, whatever. For other currency controls, the two divisions are normally ‘country of origin notes’, and ‘negotiable instruments’. either or both of which may be controlled. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [July 14, 2021, 12:18am UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/370 "2021-07-14T00:18:20Z")
Yep. _If foreign currency is involved as part of the transaction, use the current business day’s exchange rate to determine the total amount in U.S. currency to enter._ [https://www.fincen.gov/resources/statutes-regulations/guidance/frequently-asked-questions-concerning-completion-part-ii](https://www.fincen.gov/resources/statutes-regulations/guidance/frequently-asked-questions-concerning-completion-part-ii) ---
**Author:** ![md-2000](https://avatars.discourse-cdn.com/v4/letter/m/9d8465/32.png) [@md-2000](https://boards.straightdope.com/u/md-2000)\ **Post date:** [July 14, 2021, 12:23am UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/371 "2021-07-14T00:23:36Z")
> [@Hatchie](#): > > Really? So they’re not so safe after all. > Ironically, does that mean that if, say, a meteor destroys the building, the lost contents of those allegedly safe boxes won’t be compensated for (unless you sue), while depositors’ accounts are insured thus recoverable? Our financial advisor mentioned to us that our accounts with the bank that invest in Mutual Funds and similar investments are likewise not covered by the Canada Deposit Insurance Corporation - if financial shenanigans or bankruptcy of the fiduciaries loses me my money, I’m not insured, even though the accounts are with the bank. Just cash (or rather, electron) deposits are covered. (To the maximum limit of the CDIC, $100,000 per person I think it is.) I assume the same applies in the USA with the FDIC. OTOH, if the fund actually owns the assets it claims, it would be hard for anything other than a total market crash or serious fund manager larceny to lose that money. ---
**Author:** ![Melbourne](https://avatars.discourse-cdn.com/v4/letter/m/b5e925/32.png) [@Melbourne](https://boards.straightdope.com/u/Melbourne)\ **Post date:** [July 14, 2021, 2:59am UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/372 "2021-07-14T02:59:04Z")
Following that link, I see that cash transaction reports are for cash transactions. There is a tangled web of other reports that must be filed for things that are not ‘cash’ by narrow definition. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [July 14, 2021, 4:44am UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/373 "2021-07-14T04:44:36Z")
Not so much. When i was consulting for a large brokerage company, Million $+ wires were commonplace. The SAR serves for suspicious transactions. ---
**Author:** ![Whack-a-Mole](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/whack-a-mole/32/141_2.png) [@Whack-a-Mole](https://boards.straightdope.com/u/Whack-a-Mole)\ **Post date:** [July 14, 2021, 5:43am UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/374 "2021-07-14T05:43:09Z")
And yet the SARs often were ignored: > The [banks](https://www.rollingstone.com/t/banks/)’ laundering transactions were so brazen that the NSA probably could have spotted them from space. Breuer admitted that drug dealers would sometimes come to HSBC’s Mexican branches and “deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows.” > **[Outrageous HSBC Settlement Proves the Drug War Is a Joke](https://www.rollingstone.com/politics/politics-news/outrageous-hsbc-settlement-proves-the-drug-war-is-a-joke-230696/)** > > If you're suspected of drug involvement, U.S. takes your house; HSBC admits to laundering cartel billions, loses five weeks' income and execs have to partially defer bonuses. And then… > **[Obama Pick for AG Let HSBC Off the Hook](https://observer.com/2014/11/obama-pick-for-ag-let-hsbc-off-the-hook/)** > > In 2012, Attorney General nominee Loretta Lynch was a main actor in the decision not to criminally prosecute HSBC. Seems if you are moving thousands you will get busted. Move millions and…eh… ---
**Author:** ![Thing.Fish](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/thing.fish/32/9168_2.png) [@Thing.Fish](https://boards.straightdope.com/u/Thing.Fish)\ **Post date:** [July 14, 2021, 6:22am UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/375 "2021-07-14T06:22:57Z")
I used to have a landlady who lived upstairs in a two-flat. She didn’t have a very high-powered job, but she always seemed to be making a lot of expensive home improvements. We wondered if it could be a money laundering thing…she has some illegal cash income which she uses to hire shady contractors who will work under the table to make home improvements. Do that for a few years and then sell the place, which is now worth much more than you bought it for. Obviously this would only work for relatively small amounts of money, and like all of these schemes would fall apart if Johnny Law ever decided to take a really close look at her for some reason. But with those caveats it seemed like a plausible scheme. ---
**Author:** ![Melbourne](https://avatars.discourse-cdn.com/v4/letter/m/b5e925/32.png) [@Melbourne](https://boards.straightdope.com/u/Melbourne)\ **Post date:** [July 14, 2021, 8:04am UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/376 "2021-07-14T08:04:17Z")
> [@DrDeth](#): > > Million $+ wires were commonplace. But it seemed to me that “Million $+ wires were commonplace” would be handled separately by the “money transmission” requirements, rather than the “Suspicious Activity” requirements. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [July 14, 2021, 3:11pm UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/377 "2021-07-14T15:11:28Z")
HSBC _wasn’t_ filing the correct SARs, that is the issue. ---
**Author:** ![md-2000](https://avatars.discourse-cdn.com/v4/letter/m/9d8465/32.png) [@md-2000](https://boards.straightdope.com/u/md-2000)\ **Post date:** [July 15, 2021, 6:23am UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/378 "2021-07-15T06:23:12Z")
The question is - why did someone(s) at HSBC think that was a good idea? Back to the usual legal issue, it’s not difficult to get caught, and you can’t guarantee that you don’t become some DA’s poster boy for bad behaviour. Not every AG is going to let you off the hook. I presume Lynch’s decision would probably be related to some form of turning over the books to the feds so they can go after all the people who took advantage of the service. Plus… assorted state’s evidence testimony. That could end up being more risky to life and limb that trying not to get caught. Having to decide if a lifetime looking over your shoulder is preferable to a lifetime in jail sounds like no fun. But then, crime is rarely based on carefully considered long term planning. ---
**Author:** ![Melbourne](https://avatars.discourse-cdn.com/v4/letter/m/b5e925/32.png) [@Melbourne](https://boards.straightdope.com/u/Melbourne)\ **Post date:** [July 20, 2021, 6:31am UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/379 "2021-07-20T06:31:08Z")
> [@md-2000](#): > > The question is - why did someone(s) at HSBC I haven’t paid any attention to HSBC. Zero. So a complete tangent: around here a bank (NAB) got into trouble for not filing the Australian SAR because they were big enough that they just didn’t notice. The bank ran dozens of different business units, for both marketing and historical reasons, generating millions of activity reports, and it was all automatically and mechanically channeled through their SARS reporting software — except for those business units that they thought were being automatically and mechanically included, which weren’t. I shake my head and roll my eyes whenever someone says “it’s not difficult, it’s just software”. ---
**Author:** ![Whack-a-Mole](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/whack-a-mole/32/141_2.png) [@Whack-a-Mole](https://boards.straightdope.com/u/Whack-a-Mole)\ **Post date:** [July 20, 2021, 6:48am UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/380 "2021-07-20T06:48:51Z")
> [@md-2000](#): > > The question is - why did someone(s) at HSBC think that was a good idea? Back to the usual legal issue, it’s not difficult to get caught, and you can’t guarantee that you don’t become some DA’s poster boy for bad behaviour. If you read my linked article above HSBC was brazenly breaking the law. There was no subtle anything about it: > This bears repeating: in order to more efficiently move as much illegal money as possible into the “legitimate” banking institution HSBC, drug dealers specifically designed boxes to fit through the bank’s teller windows. Tony Montana’s henchmen marching dufflebags of cash into the fictional “American City Bank” in Miami was actually _more_ subtle than what the cartels were doing when they washed their cash through one of Britain’s most storied financial institutions. [SOURCE](https://www.rollingstone.com/politics/politics-news/outrageous-hsbc-settlement-proves-the-drug-war-is-a-joke-230696/) The US AG let HSBC go. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [July 20, 2021, 4:01pm UTC](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654/381 "2021-07-20T16:01:06Z")
> [@Whack-a-Mole](#): > > The US AG let HSBC go. Well, not quite. [https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-9-billion-u-s-fine-in-money-laundering-case-idUSBRE8BA05M20121211](https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-9-billion-u-s-fine-in-money-laundering-case-idUSBRE8BA05M20121211) _# HSBC to pay $1.9 billion U.S. fine in money-laundering case_ > **[Homepage - Good Jobs First](https://violationtracker.goodjobsfirst.org/parent/hsbc)** > > Good Jobs First promotes corporate and government accountability in economic development, especially around the use of public subsidies. > **[HSBC Holdings Plc. and HSBC Bank USA N.A. Admit to Anti-Money Laundering and...](https://www.justice.gov/opa/pr/hsbc-holdings-plc-and-hsbc-bank-usa-na-admit-anti-money-laundering-and-sanctions-violations)** > > HSBC Holdings plc (HSBC Group) – a United Kingdom corporation headquartered in London – and HSBC Bank USA N.A. (HSBC Bank USA) (together, HSBC) – a federally chartered banking corporation headquartered in McLean, Va. – have agreed to forfeit $1.256... \*A four-count felony criminal information was filed today in federal court in the Eastern District of New York charging HSBC with willfully failing to maintain an effective anti-money laundering (AML) program, willfully failing to conduct due diligence on its foreign correspondent affiliates, violating IEEPA and violating TWEA. HSBC has waived federal indictment, agreed to the filing of the information, and has accepted responsibility for its criminal conduct and that of its employees. \* - ``` * ``` _“HSBC is being held accountable for stunning failures of oversight – and worse – that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries,” said Assistant Attorney General Breuer. “The record of dysfunction that prevailed at HSBC for many years was astonishing. Today, HSBC is paying a heavy price for its conduct, and, under the terms of today’s agreement, if the bank fails to comply with the agreement in any way, we reserve the right to fully prosecute it.”_ _“Today we announce the filing of criminal charges against HSBC, one of the largest financial institutions in the world,” said U.S. Attorney Lynch. “HSBC’s blatant failure to implement proper anti-money laundering controls facilitated the laundering of at least $881 million in drug proceeds through the U.S. financial system. HSBC’s willful flouting of U.S. sanctions laws and regulations resulted in the processing of hundreds of millions of dollars in OFAC-prohibited transactions. Today’s historic agreement, which imposes the largest penalty in any BSA prosecution to date, makes it clear that all corporate citizens, no matter how large, must be held accountable for their actions.”_ **But they ain’t the only ones:** _HSBC’s settlement comes a day after rival British bank Standard Chartered Plc agreed to a $327 million settlement with U.S. law enforcement agencies for sanctions violations, a pact that follows a $340 million settlement the bank reached with the New York bank regulator in August._ _Such settlements have become commonplace. In what had been the largest settlement until this week, ING Bank NV in June agreed to pay $619 million to settle U.S. government allegations that it violated sanctions against countries including Cuba and Iran._ _In the United States, J.P. Morgan Chase & Co, Wachovia Corp and Citigroup Inc have been cited for anti-money laundering lapses or sanctions violations._ [Previous page](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654.md?page=18) [Next page](https://boards.straightdope.com/t/the-hard-part-of-money-laundering/944654.md?page=20)