The hard part of money laundering

The key to laundering money is to use the right soap.

Bars and restaurants are excellent places to do that, particularly if they have video poker machines. Put some money in the machine, play a few low bid games, cash back out, the money is now clean. This only works for relatively small amounts of money, it would be a real bitch to try to clean a million dollars this way. But nobody is really auditing the books to track whether a business is profitable or not. Have you watched The Soprano’s? Bada Bing.

And really this applies to many other business’. The IRS cannot keep up with auditing small, or even large business’, not enough manpower. Some people assume that everything is watched, but it is not.

Money laundering is only a real problem at the higher levels with large amounts of money. When it involves large amounts of money that are in banks or other financial intuitions, that is a problem because transactions are reported. Large amounts of cash are a problem. This is why the US government keeps redesigning paper money, like hundred dollar bills, on a fairly regular basis. I expect that Benjamin’s to be redesigned soon. Perhaps to honor some other historical figure who has been passed over, but that is not the real reason.

Which brings us back to the IRS and nobody really watching. Because they can’t keep up. They may eventually find something to put up a red flag about, the the people involved have moved on. Small people and business’ get caught, large companies rarely do.


I clearly didn’t think my scenario all the way through. Maybe in my head I conflated it with a nightclub.

Yes. I mean, I was always personally content as long as I could empty several duffel bags full of cash onto the bed and roll and splash around in the piles of filthy, filthy money, but the bosses didn’t see it the same way.

I thought Michigan had legal medical and recreational cannabis. What makes these shops illegal?

The growers and sellers dont pay taxes to the state. These got really going and opened up once the law passed and the States dragged letting shops open for a year.

If I had to guess this guy makes an extra $150K a year that he needs to launder. Not so much that a bar couldn’t pipe thru as sales.

The IRS isn’t watching businesses that are reporting TOO MUCH income. That’s not their job. That’s the sort of thing a criminal prosecutor would look at if they are looking for evidence of an illegal enterprise. If you’re not on their radar for something else, nobody is going to question why your car wash makes twice as much as the one across the street.

I’ve always thought a church would be the ideal business for money laundering.

If you’re at the point where you need to worry about laundering large amounts of cash, you’re at the point where you should be planning long-term. Buy a whole lot of laundromats through fronts, and then gradually increase the reported revenue over the course of a few years. Anyone looking for trends will simply see the local business economies undergoing respectable growth.

But then, this doesn’t account for higher-priced “add on” services. Lots of laundromats near me offer things like wash&fold services, and pick up and delivery, which add significantly to cost of each load, but which couldn’t easily be tracked merely by doing the math on how many loads you could wash in a day. Again, just gradually increase the sales of such harder to track services, and you could add a significant amount to your reported sales with very little effort.

The biggest thing is going to be to not get noticed. If the FBI or whoever is sufficiently interested in you, they’re going to find some way to go through your books, and your books are either going to be suspiciously short of detail, or contain telltales. But that’s if they’re interested in you. If nobody ever thinks to look, nobody will see anything.

I guess that there is a big difference between big and small when it comes to laundering cash.

The people who import the shit by the tonne will have it sussed. I imagine they can also export cash by the tonne to countries where scrutiny is not a problem.

The retailer, working from a flat with runners to deliver the goods, and the runners themselves have more trouble. I only know from news reports, but it seems that whenever one of these scrotes gets arrested, they have huge amounts of cash in their possession and a ridiculous collection of watches, gadgets and jewellery, much never even unpacked.

I thought that laundering money in casinos would be more about the bettors doing it than the owners. Something like betting 50K on the Packers at one casino and 50K on the Bears at a different place. Sure, you lose some money when the house takes their cut, but then you can say you earned your money betting on a game.

Maybe I’m horribly naive but my understanding is that the point of money laundering isn’t to evade taxes per se. Once the government has a reasonable suspicion that you are, e.g., financing terrorism or making millions of dollars a year from being a captain the Mafia, then you’re pretty much going to be investigated through the full array of normal means (wiretaps, surveillance, informants) to build a criminal case against you. Sure, there are a few examples of Al Capone phenomena where tax charges were the only thing that can be proven, but I think the main idea of laundering money through your car wash is more to try to prevent anyone from figuring out that you are actually a drug kingpin for as long as possible. Once the authorities know about it, they’re going to be digging up people who can testify to the hits you’ve ordered and following you around with long-range cameras and microphones, not weighing the liquor bottles at your bar to figure out if you’re juicing the books.

Failing to record all your cash transactions in order to underpay taxes isn’t “money laundering” - you’re not disguising the source of your funds in order to hide the fact that you are acquiring or using them illegally - it’s just not paying taxes.

For small timers its about being able to show a legal source of income. Income that you paid taxes on while running a business. An extra $20- $100K after taxes goes a long way.

An accountant once told me about some car insurance company (not one of the big national ones) laundering cartel money. But I didn’t understand the mechanics, and searching online just returns lots of articles about general insurance fraud. I believe it involved setting up fake policies and paying out fake claims, but I’d like to find something written about it.

I’ve heard estimates that money laundering costs between 1/3 and 1/2 the face value before you get it into some reasonably untainted and deniable state, whether that is by fudging through a gambling joint or staggered bets, feeding it in one Canadian coin a time into your crooked detergent dispenser or via nefarious banking practices.

It will probably get even more lossy very quickly. One thing Covid did very well was to rapidly make people used to not paying cash. Cash businesses will shrink in number and be under constant pressure to switch over, which then takes them a long way to financial transparency and traceability.

But attention will probably still focus in the next decade on the Apples and Googles of the world, and their arrangements to avoid tax. Catching avoided corporate tax is seen as the low hanging fruit that all governments reckon they can chase for an easy win.

The New York Times has an article today about how the international art market is used for money laundering. It says, “Billions of dollars of art changes hands every year with little or no public scrutiny. Buyers typically have no idea where the work they are purchasing is coming from. Sellers are similarly in the dark about where a work is going. And none of the purchasing requires the filing of paperwork that would allow regulators to easily track art sales or profits, a distinct difference from the way the government can review the transfer of other substantial assets, like stocks or real estate.”

I don’t think there is a “hard part.” It seems ridiculously easy, from observing two obvious money laundering operations close to my house.

One is thankfully gone, after many years. The other is still going strong.

Both are extremely good properties. The one that is left would probably sell for well north of €1 million. They’re never open, ever. And by never, I mean not ever. They burn down about once a year, so I presume they collect insurance money on that. They usually have the place full of flat screen TVs, probably for that purpose.

I asked a guy I know on the council about them once, he said the council are well aware they launder money but to prove it you need police detectives to team up with the revenue service accountants and put a whole team on going after them and they simply don’t have the man power. I said I could prove it in two minutes by looking over their books - they are literally never open! It would be trivially easy and they aren’t even trying. But I guess I’m not a team of police detectives combined with the revenue service :wink:

So I think there isn’t a hard part. Just say you sell coffee or shisha or beer, what ever. Then you don’t. Simple. I suppose you have to be a somewhat uninteresting criminal for the police + revenue service not to care enough, and that’s the most important thing.

The car wash turned out to be inadequate, though. There was a key “how much is enough” scene where Skyler took Walt to a storage locker and showed him a huge pile of money, saying (very loosely quoting from memory) “this is more money than we can launder in 100 years through the car wash. So I had to stash it here where it’ll just molder away and be eaten by silverfish”.

How do you know they’re not paying any taxes?

I didn’t even get a reciept. The legal sellers are very upfront about how much sales tax and adult use tax you pay. Line by line. I dont go there anymore but I have seen they are still operating and know people who go there.