Money Laundering

[TromboneAl]

Sounds like Ozark which is a show on netflix !

Looks interesting.

 

[Hermit]

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.

I had a boss whose wife got into Mary Kay big time. He lost his clearance for a while and could not get in the facility where we worked. He worked from home during that time. He got his clearance back a while later and moved on to a higher level position at another site. He is probably still working...

 

[travelover]

.......... He is probably still working...

....and driving a pink Cadillac.

 

[devans0]

Create shell companies S, HE, LL. Buy a going business with a cash flow, using S. Sell the business using inflated prices on inventory and inflated cash flow to HE. Say 10x value.

Repeat this with LL buying HE. Unfortunately, HE has to sell all the assets and goes bankrupt, stiffing any loans and inventory suppliers owed money. Did I mention LL had a lot of chump investors investing on this glitzy new business that's skyrocketing in value.

S and HE are looking clean.

The old guy working at the company knows something rotten is going on and he clues the slueth.

Or this.

Collectable art, real estate, antiques, high end collectable cars are all susceptible to flimflam puffery to jack up prices. Art could also have a tragic fire that would destroy the newly discovered (fake) Michaelangelo's. Thank God they were insured.

 

[Helios]

Several years ago, a governor from louisiana had a safe full of cash, regularly went to vegas. There was also a louisiana pol who was found to have $300k in his home freezer.
Seems they were working out the laundry method.

 

[lwp2017]

True story:
Form an LLC with a few friends and buy a few convenience stores.
Sell it to your other friend LLC for a large markup
Friend sells it to next friend LLC for an additional large markup.
Friend of Friend sells it back to your LLC with another markup.

Your LLC borrows from friendly bankers using marked up value stores as collateral to buy speculative real estate in Colorado.

Would've worked if economy wouldn't have hiccuped.

Instead you declare Chapter 7 and taxpayers cover the loss through FDIC and Resolution Trust Corp.

Gets even better, since you now need a job, the US President appoints you on the board of directors for Fannie Mae.

http://www.nytimes.com/1992/11/07/us/the-transition-bank-seizes-account-of-texas-clinton-aide.html

 

[ncbill]

IDK if it qualifies as laundering but back when I was in banking I worked with a good ol' boy who related the tale of a local businessman back in the sticks where he was from.

Said businessman ended up in control of several banks, using them as his personal piggy bank to fund various projects, moving money around to keep the examiners happy.

Which worked for years before they all were audited...at the same time.

 

[sengsational]

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

I get buying a business with cash flow and ringing up more than your customers bring in, but when else does the money come out of the freezer in S, HE, and LL, llcs? I see that you might be able to fool a banker into loaning you money, and spend it on a fat cat lifestyle, but aren't you still just dribbling money through the first LLC? Or are the follow on LLCs set up to appear as if there are real cash customers that walk in daily with wads of cash? It would seem to me that setup would be easy to spot.

 

[igsoy]

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.

It's my understanding (from watching real estate flipping shows, haha) that an "all cash" offer does not mean someone shows up with duffel bags full of benjamins, but rather that in industry lingo "all cash" simply means not contingent on any financing and the accompanying hassles (appraisals, mortgage approval) which could delay or cancel the closing. The payment still comes from someone's bank, it's just that they already had the money liquid and don't have to wait on financing. A quick Google search seems to agree, but someone else may have other experience?

 

[Taxman59]

Back in the mid 70s, a house was for sale on our street for about $300k. The sellers said they wouldn't take any contingent offers (said it was to be an all cash offer!). Day of closing came and the buyers wanted the closing at the house. They showed up with $300 in cash, duffel bags of bills! The sellers called the bank and asked that someone come by to verify the bills and accept the deposit. After much discussion , the bank agreed and sent an armored car. So I guess the definition of all cash needs to be communicated by the sellers to the buyers to avoid confusion.

 

[audreyh1]

A lot of TV shows feature fake invoices for inflated building materials used in construction.

 

[audreyh1]

Back in the mid 70s, a house was for sale on our street for about $300k. The sellers said they wouldn't take any contingent offers (said it was to be an all cash offer!). Day of closing came and the buyers wanted the closing at the house. They showed up with $300 in cash, duffel bags of bills! The sellers called the bank and asked that someone come by to verify the bills and accept the deposit. After much discussion , the bank agreed and sent an armored car. So I guess the definition of all cash needs to be communicated by the sellers to the buyers to avoid confusion.

LOL! At least the sellers and buyers did not have to worry about a fake email causing an ACH transfer to the wrong account!!!

 

[TromboneAl]

an "all cash" offer does not mean someone shows up with duffel bags full of benjamins

Yes. Unfortunately the word "cash" has several meanings.

 

[TromboneAl]

I'm reading this book:

and was struck by one example, in which a theft was conducted via a system of 123 shell companies. 123!

 

[audreyh1]

I'm reading this book:

and was struck by one example, in which a theft was conducted via a system of 123 shell companies. 123!

Oh, great resource for your novel!

Wow 123 shell companies! That a lot of work!

 

[sengsational]

Yes. Unfortunately the word "cash" has several meanings.

A very long time ago...I think I was 12...my uncle made the distinction between "cash" and "cash currency". It stuck. When I mean Benjamans, I say "cash currency". But it could be more specific..."cash currency US". Don't want any Drachma.

 

[TromboneAl]

This stuff is more mind-boggling that I expected. There is a whole separate world out there.

Just listened to this Fresh-Air broadcast about the Panama and Paradise papers:

https://www.npr.org/2017/11/20/5653...rs-opened-up-the-worlds-illicit-money-network

Here's an important question:

What are some legal and above-board reasons for having secret shell companies?

 

[travelover]

............

What are ................. above-board reasons for having secret shell companies?

I guess that rules out paying off porn stars.

 

[Sunset]

...
Here's an important question:

What are some legal and above-board reasons for having secret shell companies?

To collect Lottery winnings.
To establish a large holding in a public company without alerting other large shareholders, one person is building a significant portion, so the price does not rise.

 

[TromboneAl]

1. To collect Lottery winnings.
2. To establish a large holding in a public company without alerting other large shareholders, one person is building a significant portion, so the price does not rise.

1. Ah, nice. You collect the winnings anonymously so that Uncle Fred doesn't pester you for money.

Of the 44 states and the District of Columbia who participate in the PowerBall bonanza, only six states permit pure anonymity (DE, KS, MD, ND, OH and SC). Three other states apparently allow anonymity if the winnings are claimed through a trust or limited liability company (LLC).

2. Wouldn't the price rise independently of whether one person purchases the shares or multiple (or a corporation)?

 

[TromboneAl]

Here's a fun video about the Panama Papers. It shows the moment the Finnish prime minister realizes he's been caught:

 

[MarieIG]

I'm afraid I can't help. I have no personal knowledge about money laundering.

 

[travelover]

I'm afraid I can't help. I have no personal knowledge about money laundering.

Thanks for checking in. I was wondering if you knew about it.

 

[audreyh1]

I’ve laundered money before. Those bills I forgot in my pants pocket came out nice and clean!

 

[TromboneAl]

The book related to this thread is free today.

The Protected Witness