It is getting pretty annoying to the point some banks in the USA won’t allow anyone but the account holder to deposit as much as $20, but why all this hoopla about money laundering?
Sure if you’ve got tens of millions or billions you need to do some laundering, but your average drug dealer? Who cares!
You have a million dollars in illicit cash, why would you need to launder it?
Go on craigslist and look at the lease free offers of rooms for rent, utilities paid. Buy a cheapie car too while you are there.
BOOM pretty much anything else you can buy in cash, afraid your cash stash could be found? Turn small amounts into bitcoin through localbitcoin monthly, you meet a guy at Starbucks hand him the money and you have your bitcoin, put it on a few encrypted mini SD cards and hide them.
I have left explicit instructions with my bank to allow anyone to deposit as much money as they want in my account.
I remember when things tightened up for the War on Drugs. Now it’s tighter for the War on Terrorism. There are plenty of ways to launder money, but small exchanges don’t work well for large amounts of money to launder. If you have connections to retail businesses it wouldn’t be that difficult, but if you are suddenly in possession of large sums without a handy network like pizza restaurants to help you then it becomes more difficult. If the banks weren’t reporting large deposits there would be a lot of money laundering going on, and a significant portion of that money could be going to terrorists.
On the flip side, these are steps taken in two failed wars, and they aren’t going to stop determined criminals.
People don’t want to launder money to finance their own lifestyles. The want to launder money to finance major operations- be it armed political movements, organized crime, whatever. These funds are investments for further nefarious purposes. The US has few ways of combatting this, especially when it is overseas, but we can try to stem the flows of money.
I went through some of the same issues grude seems to be dealing with.
I wanted to add Mrs Iggy onto my bank account. The bank insisted on all sorts of documentation including certified letters from her accountant and lawyer!? WTF?
All the extraneous requirements went away once we agreed Mrs Iggy could only withdraw from the account and never make a deposit. Given she lives in a country that doesn’t even have a branch of my bank, that won’t be a problem.
The local drug dealer might be able to keep going on a cash basis, but once you are looking at the level of a regional network or an entire cartel the sums just get to be too big. There would be plane loads of cash flying south on a regular basis to keep up with the money transference. It’s just not that convenient to move around millions in cash on a routine basis.
Cocaine dealer Jon Roberts (one of the highest ranking Americans in the Medellín cocaine cartel) said laundering illegal money was harder than earning it.
And this was back when you could buy a new car with cash or with a check from a bank based in Panama. You can’t do that now. This was also pre war on drugs, pre war on terror, pre NSA surveillance state.
One interesting trick he talked about was you would pay off someone who worked in the lottery commission (in Puerto Rico at least) to alert you when someone came in with a winning ticket. When someone came in with a winning ticket you found the guy and gave him a bag of illegal cash to buy the ticket off him. Then you cash the ticket in and you have laundered your money.
<nitpick>The NSA surveillance state has been around since the 50’s. Check out Project SHAMROCK and Project MINARET, among others. Granted, the NSA has gotten a lot better at it over the decades, and the scope and volume have increased massively. But they’ve been snooping on people in one form or another for over half a century. </nitpick>
Even if one didn’t want to live large off of illicit gains, they might still want to launder the money. They may not worry about being discovered for having a lifestyle incommensurate with their ostensible income, but if the bills are marked in any way they could be found out due to the geographical pattern of their use. Granted, this applies a lot more to money from bank robberies or armored car thefts than to dealing drugs. (I’ve found conflicting information online about whether ATMs record any information about the serial numbers of the bills they dispense. It would be technologically feasible to track many bills this way, but I don’t know if they do. If so, that’s all the more reason to launder illicit money regardless of the level of lifestyle you wish to live.)
My US-based banks (I keep a savings and checking account in the US, as well as mutual funds and a Roth IRA with an investment company) have told me that I can’t desposit money into my own accounts anymore because I don’t have a US-based address. It’s infuriating as fuck. (No, I don’t have any family in the US, and really no friends/connections there any more at all).
When I queried the investment firm (a well known, international company with whom I had a good relationship for ten years before I moved), I was told vague nonsense about how I could be laundering money, that it looks suspicious ‘in these difficult times’ and that the simplest solution was to move back home to the States.
This is how the IRS nails people for income tax evation. They are very, very good at knowing what sort of lifestyle your income can buy. So if they see someone who’s declaring an income of $30,000 per year, but he drives a Mercedes and spends a thousand bucks a month on jewelery for his girlfriend, then it’s a given he has income he’s not reporting. This is why criminals launder money: to create a plausable excuse for having it.