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Money Laundering
Old 01-09-2018, 06:34 PM   #1
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Money Laundering

I understand the classic type of money laundering in which, say, a drug dealer starts a legitimate cash-intense business, and adds his illegal cash to that business, changing the money from dirty to clean.

But here are my questions about another type of money laundering:

Create an offshore company to accept foreign [illicit] money and use that company to purchase American property. Then take a loan out against that property. The loan enables the person to have full access to the money without having paid taxes or disclosed the source of the income.


So, you take out a loan, but you still have to pay it back, right? And how can you use the property as collateral without revealing that you own it?
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Old 01-09-2018, 06:46 PM   #2
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Supposedly that is what Mr. Manafort and his partner is in trouble for, however, depending on who you talk/listen to, his money was foreign, but not illegal.
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Old 01-09-2018, 06:55 PM   #3
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So, you take out a loan, but you still have to pay it back, right? And how can you use the property as collateral without revealing that you own it?
I'd imagine a shell company would solve the ownership issue. I'd assume this would be major property purchase, like a hotel, casino or large development where a few million could be only part of a much larger pot and not be quickly missed.
No, you don't pay it back. Sort of a reverse Ponzi scheme, you make minor payments for a bit and then eventually just fade away with a few mil. And if the property eventually goes south (see 2008) so be it.
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Old 01-09-2018, 07:05 PM   #4
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When do we get to suggest names for the new book you are writing?

Btw - isn’t that what crypto currency is for?
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Old 01-10-2018, 04:51 AM   #5
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Btw - isn’t that what crypto currency is for?
No - crypto currencies are not suited for this. Since they have public ledgers. There is no public register of who owns the accounts - but if the police find out which account a criminal has it's very easy to find the transactions.

I have read about several cases where criminals got punished after the police used the public crypto ledgers to connect criminals together after finding all their transacrions online.
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Old 01-10-2018, 08:50 AM   #6
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Any particular reason you're asking?
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Old 01-10-2018, 09:07 AM   #7
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I don't know about foreign real estate, but in Denver DD and her hubby put in full price offers on several condos and did not get the contract because "someone" put in an all cash offer. Pot dealers cannot do business with banks so they have to do something with that money. Once they own the property then can rent it and then in a reasonable time sell it. The proceeds would then be clean. I think the skyrocketing housing prices in Denver are partially driven by the pot industry.
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Old 01-10-2018, 09:22 AM   #8
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Any particular reason you're asking?
Just want to understand the news, that's all. Really.

Here's another method I don't quite get:
If you can't wait to reappear the money gradually, and the amount involved isn't too big, you can always use a simple casino scam. Go to a casino and buy some chips. Do a little low-risk gambling. (For example, bet each chip, one at a time, on red. Do that 20 or 30 times and you'll have about the same amount you started with.) Get a few more chips and repeat. Play a few different games (blackjack, craps, slots). Ideally, go to several different casinos and repeat the whole process there. Eventually, cash in all your chips and go home with a story about how you won a bunch of money at roulette. Pay taxes on your winnings.

Okay, so after lots of gambling you've broken even. You cash in your chips, and then just tall people that you won, say, $50,000 at the casino? If you won that much, the casino would report it to the IRS, so it could be shown that you were lying. Yes?
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Old 01-10-2018, 09:25 AM   #9
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By allowing the loans, the banks in the US are acknowledging/accepting that the real estate is held by a foreign company and they must also be acknowledging that the person taking the loan has control over that foreign company.

So if I opened an LLC in Ukraine and had that LLC purchase shares in a US-based REIT, would the bank loan ME money? I doubt it, because they couldn't compel a sale of a specific property if I didn't pay my loan.

Say I live in a house with a big mortgage. Also say my uncle in Ukraine dies and leaves me money that would get taxed severely if I brought it into a US bank (I don't even know if that would happen, but I bet it would). What's to stop me from selling the house I live in to a Ukrainian LLC (that I set up with the sole purpose of holding the house)? I sign a lease for $1 per month between me personally and the LLC to make it official. Even without any loan involvement, I'm suddenly without a mortgage payment. Since it was a very rich uncle, I also buy a 50' catamaran, and the LLC pays the birthing and maintenance...and I get paid to make sure it's ready to sail.

The only problem is that, like that thumb drive with the bitcoin, I can't find the rich uncle from Ukraine!
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Old 01-10-2018, 09:25 AM   #10
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When do we get to suggest names for the new book you are writing?
I'm thinking: Fire and Fury. I'll have to see if there are any books by that name.
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Old 01-10-2018, 09:30 AM   #11
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I don't know about foreign real estate, but in Denver DD and her hubby put in full price offers on several condos and did not get the contract because "someone" put in an all cash offer. Pot dealers cannot do business with banks so they have to do something with that money. Once they own the property then can rent it and then in a reasonable time sell it. The proceeds would then be clean. I think the skyrocketing housing prices in Denver are partially driven by the pot industry.
What you say may be totally accurate. But it is up to the HOA covenants to be written so owners cannot purchase intelligence for rental which would quickly reduce property values for other owners.

And with legitimate pot growers come bootleggers that are growing illegal pot and not paying taxes on inventories. I would expect to see more than a few dead bodies of those dealing in this commodity.
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Old 01-10-2018, 09:35 AM   #12
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Okay, so after lots of gambling you've broken even. You cash in your chips, and then just tall people that you won, say, $50,000 at the casino? If you won that much, the casino would report it to the IRS, so it could be shown that you were lying. Yes?
The presumption is that you played table games which does not require the casino to report to the IRS. I think law enforcement would see through this if you did it more than once, though.
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Old 01-10-2018, 09:48 AM   #13
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How would this work unless the Casino was in on it too?
To stay with the roulette example, you bet $38, expected return in $35. The only taxes due are the casinos $3 profit.
You can tell people you won but the IRS isn't going to be fooled.

Cash business and commingling would probably be the hardest for the IRS to find. When I was a kid there was a gentleman that sat at the end of the bar of a restaurant all day with a ledger book. He owned a coin op laundry.
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Old 01-10-2018, 09:52 AM   #14
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Isn't this why Vegas was created by the mob?
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Old 01-10-2018, 10:02 AM   #15
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You can tell people you won but the IRS isn't going to be fooled.
Telling people is not germane to the laundering process. Apparently, casinos are not required to attempt to assess winnings for people playing table games. The IRS will be happy to take money of "tax-honest gamblers" of table games. But other law enforcement will probably raise an eyebrow if they get their hands on the tax return.
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Old 01-10-2018, 10:08 AM   #16
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The purchase of high priced Real Estate in a Luxury Tower using all Cash and paying way above Asking Price would seem to indicate some complicity with the Owner of the Luxury Tower.

That couldn't happen, could it ??
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Old 01-10-2018, 10:39 AM   #17
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I'm thinking: Fire and Fury. I'll have to see if there are any books by that name.
You're late.



https://www.washingtonpost.com/news/...t-complaining/


Randall Hansen happened to be in Washington for a conference on Friday as Michael Wolff’s new*explosive book, “Fire and Fury: Inside the Trump White House,” was taking the city by storm.

“I was perking up a bit,”*said*Hansen, the interim director at the*Munk School of Global Affairs*at the University of Toronto. But his interest in the book had less to do with the political controversy it*sparked and more to do with its title.

That’s because almost a decade ago, Hansen wrote a book about a different kind of “fire and fury.” Hansen’s*“Fire and Fury: The Allied Bombing of Germany, 1942-1945,”*released in 2009, earned national acclaim in Canada for its examination of*civilian German suffering during World War II.
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Old 01-10-2018, 11:04 AM   #18
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Ha!

Hansen's Kindle book is ranked 7,420 in the Kindle store, which means he's now selling about twenty-one books per day. He sold very few before that.

Probably gets a lot of returns, though.

Keeping my fingers crossed that someone will write a nonfiction bestseller called Democracy's Thief.
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Old 01-10-2018, 12:04 PM   #19
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I'm thinking: Fire and Fury. I'll have to see if there are any books by that name.
It would be a better book than the most recent one if you actually interviewed cabinet members.

During my w@rking days, there was a putt putt golf course on my travels to the mine. I never saw anybody ever there in 14 years, and I rotated shifts every two weeks. Never, nada, zilch, nunya. The place was always manicured, fresh paint, and trimmed. Nearest town 15 miles, population, 4100.

Somebody was laundering money there, and I doubt it was the people in the trailer on the back of the lot.
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Old 01-11-2018, 01:01 PM   #20
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After reading the 31 pages of the Manafort indictment on Politico, I see I have a ways to go. It lists Vendor S for Housekeeping in New York. That would be nice but some of my clothespins are empty.
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