They’ll probably call in Interpol for assistance.
All of the above require people who are prepared to accept large amounts of cash - ie. paper money - and hand over casino chips, houses, or whatever. Money laundering is not about tax fraud (although that may be the origin of the ‘money’) it’s about converting large amounts of paper money into bank deposits without attracting attention from law enforcement.
This is why banks will report large cash deposits and why, in most countries, governments are trying to get paper money out of the system.
If your local dope dealer allows you to tap your bank card instead of paying cash, he may well be posing as a legitimate business and your account may well show a charge for some service. If he gets arrested, he will be charged with dealing not ML, but of course, there is a link between him and you and his other customers that may turn out badly.
If a hot dog stand does the same, and your receipt says “hot dogs”, albeit expensive ones, but you actually get a small baggie as well, the same applies.
Do any law enforcement agencies proactively look at the “over $10000” deposit reports sent in by banks to fish for sketchy companies to start investigating? Are suspicious deposits alone sufficient cause to begin a criminal investigation?
That’s a good question. I don’t know, but if I was proactively looking for suspicious deposits, I’d look at the ones for $9,999.
I understand this. What I am saying is that if you own a casino and want to launder money, find an alcoholic friend, hand him $9k and have him walk into your casino and buy chips. Tell him to gamble, don’t sign up for the rewards program, lie to the ladies about how he is a super secret spy, get free drinks, and most importantly, lose it all, except for a couple of hundred dollars which he can use for a cab and a hotel room that is not here.
No ID, no paper trail. Just a video of a drunk guy walking around and gambling.
It doesn’t have to be that complicated. Putting a profitable legit business at risk to make a few bucks more laundering money makes no sense. The only hard part about money laundering is getting away with the crime generating the money needed to be laundered in the first place. I suspect the most successful money laundering fronts are really only businesses on paper.
I guess there were still businesses that paid cash in the 2000’s? Canadian banking is more advanced, I don’t think anyone does any more. The last time I had a job with an actual cheque (not direct deposit) was 2010. Even when I started working part time in 1972 we were paid by cheque. Before that, I’d caddy on weekends and that was cash - the member signed a chit and the country club pro shop paid out the cash.
that’s the second part of the laundering, explaining why you have the money. “I won it.”
Still doesn’t explain how to get $500K in cash into the system. From what I’ve read, casinos are closely regulated and monitored to prevent exactly the scenario of “Joey Fingers” and his boys each buying $5,000 worth of chips with small bills, 100 times. The feds get very interested in this obvious money-laundering scheme. Cashing out one of the video lotto cards or a pile of chips that’s too large will require some sort of report nowadays, I suspect. Plus the IRS is wandering the halls looking for people who just won big payoffs, and will record their personal details while they collect taxes; so claiming “I won it at the casino” probably won’t pass muster if the IRS has no record of a big win.
The only way this works is if the purpose is to generate losses that accrue to the casino’s books and boost their deposits. But if we’re getting into “I own a casino” territory then you will attract a completely different level of attention.
Nothing stops a bank employee from filing a Suspicious Activity Report if they figure out that the business does not seem to be the sort to generate $100K a day. Depositing $100K a day will also generate a report for transactions over $10,000. How many of these it takes to attract a deeper investigation depends on a lot of things. IIRC one of the things in the report is an explanation where the money came from, and lying on that form is most probably a crime itself also.
That’s called structuring, and is a crime in itself. Breaking up a large transaction into ones smaller than the reporting amount to avoid reports is automatically a crime. All they have to do is show you made more than $10,000 total deposits in a short time. Then they hold your money (and any other suspicious assets) until your lawyers sort it out, if they can.
I also recall reading once that there’s a second limit number which varies from day to day to catch people trying to deposit cash amounts below $10,000.
There’s the case of a Ohio(?) couple whose seasonal restaurant had deposits over $10,000 during some stretches. A bank employee told them they had to fill out some complex reports if the amount was over $10,000 so they did what she said and broke up the deposits. By the time bad publicity persuaded the Treasury to unfreeze their accounts and return their money (generally won’t keep the money if the transactions are a legit business dealing - once the press is involved) they were broke their restaurant was gone.
All these fall back to the cardinal rule - don’t attract attention! The problem with this is that then you cannot live the lifestyles of the rich and famous without a lot of well-connected underworld friends. Best you can hope is keep your head down, have a nicer car and a decent home in the burbs and no job. Go to nice restaurants regularly and pay cash. Even buy an airline ticket with cash will trigger attention from the TSA.
Also remember that if we can imagine it, the IRS and Treasury and FBI have already thought of it, and so much more.
Ok, launder money from where?
Laundering money usually involves three steps: placement, layering, and integration.
Let us say a crook has some cash from illegal activities. He also has a cash business selling Widjets. The normal cash in was say- $10000 per day. But now he wants to deposit $20000 per day, since he makes $10000 from black market Quatloo sales.
Smart thing to do is to bring the deposits up slowly- 11K one week, then 12k, two weeks later, 13k, etc, etc etc, until you get up to $20K per day. Mind you, some banks do not want to take in that kind of cash daily, and there are cash deposit fees, armored car fees, and so forth.
Now if he reports all that on the tax return from the business, it could work.
Now the Quatloo funds are Placed.
Next, he opens a shell account or two, and pays them from the Widjet account. Smart move here is to generate invoices from Clam Inc, and Cockles Inc then you have expenses for the Widjet so you do not owe so much taxes, however of course those Shell corps have to pay taxes also. For example Clam bills Widget for a gross of grosses of Widgets, this explains where you got all those widgets to sell. There are myriad ways to Place funds.
Then the Integration. He buys cars, houses, diamond rings, etc from those accounts.
This is by no means telling anyone how to do things illegally, this is commonly available info from dozens of cites, such as-
Please note- most of the time when you look at a business and think “That place is just a cover for money laundering” you are wrong. There are better and easier ways to launder money.
Water bills, electricity bills., how many machines, etc. It can be done both ways by the government- to show you did not report all your laundromat income or that you inflated your Laundromat income. Generally they look for that when they connect you to a illegal business such as black market Quatloos. They they start looking to see where you hid the funds.
The IRS has been gutted during previous administrations, but yes, it can and has.
This is not true. The IRS also investigates Money Laundering. Usually through examining Money Service Businesses (check cashers, wire service outlets), or by getting a SAR , or by a referral from another agency. Sometimes a Tax audit finds evidence even, then that if referred.
This is what I did for the Feds.
And to investigate a MSB or other financial institution, no warrant is needed. If they come under Federal reporting authority, you just walk in, show your buzzer and get the info. Title 31, USC.
A SAR is often enough to get the FBI a warrant anyway.
Right, and the Treasury investigated that, also.
No, not the bank, the business. Form 8300 , not a CTR.
Yes, that is true, that is what a SAR is for.
Nope, changing that limit takes time and effort, and can not be done quickly, not to mention we have international treaties on this.
Yes, and structuring gets you into hot water.
You are incorrect, sir. True, underpaying is most common, but the iRS also investigated Money Laundering.
Not so much the bombs, but the whole operation, training, recruiting, etc, not to mention supporting the locals so they are on your side.
All the time. See the FBI finds a big time drug dealer, who has murdered etc. They investigate, they arrest for murder, drug dealing etc. The Kingpin then kills, bribes or intimidates the witnesses. Then the original indictment for 30 counts of drug dealing, 6 counts of murder, etc is reduced to “99 counts of wire fraud and money laundering”, and maybe tax fraud. Al Capone- e.g… You can’t bribe, murder or scare numbers.
One more time- yes, they do. The IRS investigates Money Laundering for FINcen.
The FBI also does, coming at it from the criminal angel- they are doing a criminal case and find the money laundering.
I agree that like most things, terrorism is harder than it looks. (You wouldn’t believe the cost of C-4 nowadays. 
) I also agree that they launder money. But the authors in my link argued that burdensome anti-laundering statues directed at banks etc will do basically nothing to curb terrorism. Because terrorists have only a small footprint in the financial system, regardless of whether their budget is (say) $1,000 or $100,000 per year.
I assume the casino needs to report $500k of income and its source. If a bank needs to record a transaction over $10,000 can it really be that a casino can do a $500k transaction with no paper-trail?
Then the IRS can trace it back to Mr. Money Bags and ask him where he got $500k to blow at a casino in one night.
It might be hard to do but I am willing to bet the IRS or FBI can, if they really want to. I once worked with a forensic accountant. It is amazing what they can find out. Takes huge amounts of work but they can unwind crazy money schemes albeit with a lot of effort.
(Sadly, these days, I think the feds are too lazy to bother with most of it and go after easier targets.)
Yes, this is why I edited my prior comment about $500k. I assume that the casino would have to report a cash transaction of $10k or more.
So if I was a casino owner and/or money launderer which I am neither, and we are having fun in this thread about how to launder money, that is how I would do it. I would call up a friend who likes to drink and give him $9,500 in cash and ask him if he wants to have a good time on Saturday. But he has to follow these instructions. And if he does, then maybe in a few months he can repeat it.
And if the IRS or the FBI or the local police pull the video, then I didn’t do anything wrong. I didn’t get his ID because he didn’t meet the cash threshold. He is obviously over 21 years old and I don’t know where he got the money, maybe he robbed a bank, that’s not my job to figure out. I don’t interrogate my customers.
I’m guessing the DEA is involved in the majority of these cases. I think law enforcement agencies aren’t focused on the money being laundered directly. They just see large sums of money being laundered as a pointer to people who are committing very large crimes. And illegal drug dealing is probably the biggest money maker in the crime world.
I know banks have to file things called “suspicious activity reports” (SARs). If you stroll into your bank and keep depositing/withdrawing $9,999 the bank will generate a SAR and the feds will be on to you.
Again, I would be surprised if casinos were not beholden to something simiar.
But the bank knows the account holder. There is a name attached to that. In a casino, this is just some dude rolling in off the street. I don’t even know his name.
They can ask for ID. And they still have to submit a SAR.
I looked it up. Casinos are required to submit SARs too.