Money Laundering

[brewer12345]

Al, if I were a criminal and wanted to launder money I probably would not bother doing any of these complicated schemes. I would simply find a US bank that had lax anti-money laundering controls and use them. HSBC got into big (BIG) trouble for this about 5 years ago. The US and other regulators seem to have stepped up monitoring and enforcement of the AML rules, but there are so many banks that there are almost certainly smaller institutions with gaping holes in their systems. No doubt the criminal element shares tips on which banks are useful idiots.


Another way to do this would be to find a life insurer that is in some trouble. Offer to buy a large fixed annuity and get the company to be greedy enough for the huge deposits that they do not ask too many questions about the source of funds. A little while later you surrender the policy and have them either send the money to a bank account you control or in the case of some of the insurers you make use of the quasi-checking account that they offer.


No reason to reinvent the wheel if you can just find a chink in the armor.

 

[tinlizzy]

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.

This is similar to how the Teamsters siphon off money from their pensions - "bad" real estate investments.

Inflated appraisals at the time of purchase, loans for improvements using the property as collateral, a failed venture because of cost over-runs, finally selling the property to friends or relatives for pennies on the dollar right before the grand opening. Isn't that the set-up?

 

[TromboneAl]

When do we get to suggest names for the new book you are writing?

Funny, it was just curiosity before, but now I'm working on a book idea that will involve money laundering. Here's a paragraph from a WaPo article that helped me understand:

So in the simplest terms ... you’re going to buy a piece of property with the illegal funds, hang on to it — or have rental income from it, so that rental income is legitimate — and eventually when you sell the real estate, you get your proceeds out of it and by all accounts it appears to be a legitimate transaction.
​

Btw - isn’t that what crypto currency is for?

From https://www.thedailybeast.com/from-teddy-bears-to-trump-towers-heres-how-money-laundering-works

Although cryptocurrency transactions are recorded, they can be anonymized via a “tumbler,” a service that alters the owner’s identity by swapping the tokens with those of other people seeking obscurity. This one has regulators and lawmakers nervous.​

 

[audreyh1]

Funny, it was just curiosity before, but now I'm working on a book idea that will involve money laundering. Here's a paragraph from a WaPo article that helped me understand:

So in the simplest terms ... you’re going to buy a piece of property with the illegal funds, hang on to it — or have rental income from it, so that rental income is legitimate — and eventually when you sell the real estate, you get your proceeds out of it and by all accounts it appears to be a legitimate transaction.
​

From https://www.thedailybeast.com/from-teddy-bears-to-trump-towers-heres-how-money-laundering-works

I think that’s what people around here do. Dance halls or other “event” venues seem popular. A lot of them around and they don’t seem to get used that much.

 

[Hermit]

Funny, it was just curiosity before, but now I'm working on a book idea that will involve money laundering. Here's a paragraph from a WaPo article that helped me understand:

So in the simplest terms ... you’re going to buy a piece of property with the illegal funds, hang on to it — or have rental income from it, so that rental income is legitimate — and eventually when you sell the real estate, you get your proceeds out of it and by all accounts it appears to be a legitimate transaction.
​

...

I'm pretty sure purchasing property by those in the pot business here in Colorado are doing just this. The number of full price cash offers DD and her hubby were competing with when trying to purchase their first house last summer was amazing. Pot entrepreneurs cannot use federal banks.

 

[skipro33]

Maybe I should start a new thread to ask my question, but I figure I'd try here first;

Banks cannot handle dope money lest they fall foul of federal rules about money laundering. In California (as well as other states, but I live and pay taxes in California), pot is now legal. However, pot businesses can not use banks, have to use cash. Including paying their state taxes. So, if a pot business can't use a bank without breaking money laundering laws, then how come California puts the taxes collected from the sale of pot into federal banks and not be breaking federal money laundering laws? Simply stated, It is illegal to deposit money collected from the sale of marijuana into federal banks. How can California deposit the sales tax from the sale of marijuana then? It's money collected from the sale of marijuana after all. Seems to me the FBI, DEA, DOJ or some federal agency could freeze every bank account that has California tax money, or better, confiscate it, and charge the officials who are depositing the funds made from the sale of marijuana with money laundering.

Financial transactions involving a marijuana-related business involve funds derived from activity prohibited under federal law. I believe taxes collected on the sale of such a business would be considered funds derived from the prohibited activity.

 

[haha]

I'm pretty sure purchasing property by those in the pot business here in Colorado are doing just this. The number of full price cash offers DD and her hubby were competing with when trying to purchase their first house last summer was amazing. Pot entrepreneurs cannot use federal banks.

Why does money from a legal marijuana store need laundering. It is already clean.

Ha

 

[Just_Steve]

Why does money from a legal marijuana store need laundering. It is already clean.

Ha

Not according to the FEDS.

 

[DAYDREAMER]

Off topic a bit, but I've always had the feeling that Dicks Sporting Goods, Hobby Lobby, Bed Bath&Beyond, and other big box stores are part of a laundering scheme. You go into their stores, and there are no customers. Something is going on behind the scenes to keep those operations going!

 

[MRG]

Maybe I should start a new thread to ask my question, but I figure I'd try here first;

Banks cannot handle dope money lest they fall foul of federal rules about money laundering.

I don't know the answer to your entire question but I'll share my experiences.

Banks often handle "dope money". The number of dispensaries that take CC, would surprise many. Not an ATM, every dispensary I've seen has one or more✌. I'm saying you purchase your Cannibis with a CC.

Sure, after a while they figure out where the money comes from and shut it down. The dispensary moves to the next bank as Acme Enterprise #2.

I love it when Fidelity gives 2% back on Cannibis.

 

[Meadbh]

It looks like we are not going to run into the cannabis banking problem in Canada, because the planned legislation is federal.

https://www.theglobeandmail.com/rep...industry-banks-on-bmo-and-td/article36504415/

However, there was recently a case where a cannabis entrepreneur had her bank account closed, because cannabis isn’t legal yet.

Pot activist Jodie Emery 'distressed' after Royal Bank closes her account - Toronto - CBC News

 

[travelover]

Off topic a bit, but I've always had the feeling that Dicks Sporting Goods, Hobby Lobby, Bed Bath&Beyond, and other big box stores are part of a laundering scheme. You go into their stores, and there are no customers. Something is going on behind the scenes to keep those operations going!

Add Sears and Kmart stores to that.

 

[COcheesehead]

Off topic a bit, but I've always had the feeling that Dicks Sporting Goods, Hobby Lobby, Bed Bath&Beyond, and other big box stores are part of a laundering scheme. You go into their stores, and there are no customers. Something is going on behind the scenes to keep those operations going!

It could be the real estate angle. Similar to what McDonalds does with owning the land the store sits on. The store just has to cash flow enough to cover the real estate expense. The owners of the land/building get the “store” to pay the mortgage. They get the equity in the RE.

 

[Winemaker]

Off topic a bit, but I've always had the feeling that Dicks Sporting Goods, Hobby Lobby, Bed Bath&Beyond, and other big box stores are part of a laundering scheme. You go into their stores, and there are no customers. Something is going on behind the scenes to keep those operations going!

These stores are packed to the gills around here in SW PA. Now Hobby Lobby is not open on Sunday around here, but then again neither is Chik-fil-A. Now after last weeks news, Dick's will lose a lot of business around here, as well as it's subsidiary Field and Stream.

 

[jollystomper]

Funny, it was just curiosity before, but now I'm working on a book idea that will involve money laundering. Here's a paragraph from a WaPo article that helped me understand:

So in the simplest terms ... you’re going to buy a piece of property with the illegal funds, hang on to it — or have rental income from it, so that rental income is legitimate — and eventually when you sell the real estate, you get your proceeds out of it and by all accounts it appears to be a legitimate transaction.
​

One of my brothers almost got sucked into this about 25 years ago. He had a banking background and had just gone into real estate when some shady "acquaintances" from our youth ran into him when he was back home visiting our parents. They found out what he was doing, and asked him to help them invest in real estate deals in his local area and they were offering to pay him more than the commission rate. When he asked what the source of the funds were, they told him "it's better that you don't know". He decided to gracefully decline their request.

 

[Taxman59]

I worked in Trust company compliance, and the state examiner told a story from his time working at a bank. He was told a prospect wanted to meet with him on the prospects boat to discuss opening a multi million dollar account. When he got to the boat, he was plied with wine and then shown 2 large duffel bags of cash. the prospect said he didn't know how much was in the bag, but wanted the banker to deposit it and let him know the amount. The banker said he backed his way off the boat and left quickly.

 

[TromboneAl]

I worked in Trust company compliance, and the state examiner told a story from his time working at a bank. He was told a prospect wanted to meet with him on the prospects boat to discuss opening a multi million dollar account. When he got to the boat, he was plied with wine and then shown 2 large duffel bags of cash. the prospect said he didn't know how much was in the bag, but wanted the banker to deposit it and let him know the amount. The banker said he backed his way off the boat and left quickly.

Funny and informative. Imagine if the guy at the bank was in debt up to his eyeballs, about to lose his home, etc.

 

[TromboneAl]

My current thinking on this book idea is that the bad guy (a politician) has set up an exceedingly complicated set of shell companies to implement his money laundering strategy.

The good guy is a super-accountant. He unravels money trail, then takes advantage of the complicated system to break the chain (or with some cryptocurrency hacking?). As a result, the criminality is exposed, and perhaps the good guy will end up getting some of the money.

 

[Hermit]

I worked in Trust company compliance, and the state examiner told a story from his time working at a bank. He was told a prospect wanted to meet with him on the prospects boat to discuss opening a multi million dollar account. When he got to the boat, he was plied with wine and then shown 2 large duffel bags of cash. the prospect said he didn't know how much was in the bag, but wanted the banker to deposit it and let him know the amount. The banker said he backed his way off the boat and left quickly.

The guy with the boat should'a plied him with women too!

 

[sengsational]

And recorded it as leverage on him.

 

[jollystomper]

Funny and informative. Imagine if the guy at the bank was in debt up to his eyeballs, about to lose his home, etc.

That is also a potential book plot for money laundering. guy at the bank skims money off, goes into cahoots with political with rest of money to launder, other bad guys whom the guy on the boat got the money from start coming after the money from the "bad" angle while the super-accountant comes from the good guy angle, who will get to the truth first and implement their own respective brand of justice?

 

[FI_RElater]

I think they use “Gain” and not “Tide”

 

[jw72]

CNBC just did a segment about "weeding out pot money" new rules for casinos. Casinos can not be in business with pot companies, but can have pot conventions. They said very hard to stop buying chips, gambling a little and turning the chips back in and depositing it.

 

[TromboneAl]

Funny and informative. Imagine if the guy at the bank was in debt up to his eyeballs, about to lose his home, etc.

I was going to leave this part off, not wanting to get into politics, but I decided it's okay (?).

That story makes you understand why someone who has severe debt might be denied security clearance.

 

[Moemg]

My current thinking on this book idea is that the bad guy (a politician) has set up an exceedingly complicated set of shell companies to implement his money laundering strategy.

The good guy is a super-accountant. He unravels money trail, then takes advantage of the complicated system to break the chain (or with some cryptocurrency hacking?). As a result, the criminality is exposed, and perhaps the good guy will end up getting some of the money.

Sounds like Ozark which is a show on netflix !