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How to Launder Money 101

myiq2xu's picture

Money laundering is the process of illegally transferring money without getting caught. It takes two forms:

1. Turning illegally obtained money into money that appears legally obtained.

This is your typical drug dealer with suitcases full of cash. As long as it is in cash, it can be stolen or seized by the authorities. It can't be deposited in the bank, and the IRS will be upset that they didn't get their cut. Just ask Al Capone.

If you stuff a million dollars in your mattress you probably won't sleep very well.

2. Legally possessed money transferred illegally to someone else.

Let's say you want to bribe your congressman, but you don't want to end up sharing a cell at ClubFed with him. Or let's say you are a naughty governor and you want to pay off your $4000 hr. hooker, without triggering any reporting requirements. You need a type 2 laundering.

In either type of laundering, there are all kinds of alarms that can be set off, and the problem of paper trails. To avoid alarms, you must either stay below mandatory reporting thresholds, or use transfers that aren't monitored. Paper trails aren't a problem if you don't get audited, but if you do get audited and they know what to look for, you're screwed.

Transfers that aren't monitored include off-shore accounts, real and personal property.

Real estate is amazingly easy to transfer. In California all you need is a deed, a notary and a recording fee. The county recorder keeps records but there are no reporting triggers. If you have a crooked notary you can have all kinds of fun moving property around, until you sell it and "realize" the appreciation.

I have personally seen a chain of title that transferred the same piece of property four times in one year, between the same four people, and at the end of the year it was sold for twice it's purchase price.

I thought up another money laundering scheme that actually was used (I had nothing to do with it, they thought it up themselves) by some East Coast mobsters.

Open an art gallery, and hang up a bunch of homemade art with high prices on it. Anonymous buyers come in and purchase the art with cash, the sales are recorded, taxes are paid and the money is clean. The mobsters got caught because they were lazy and kept reselling the same art over and over, some art critic types noticed and dropped a dime on them.

Car dealerships, equiptment rentals, and "consulting" provide numerous opportunities for cleansing your cash. So do casinos if you keep the amounts low and go frequently.

As for off-shore fun, you'll need a foreign banker you can trust. Crooked bankers are the best at money laundering, but they expect a big cut.

But let say you are a drug dealer with a million in ill-gotten gains, you want to retire, and you have a legitimate source of income. A few years ago you could take a vacation to the Cayman Islands with your money, leave it in a bank there and come home with a VISA card with a limit equal to your deposit, minus a fee.

Just use the card like any credit card, and don't worry about paying the bill, there won't be one, at least not until you use up the deposit. If you're careful, you can hide lots of purchases that way without anyone being the wiser.

As for politicians, there are several ways we know of to launder bribes. Jack Abramoff hosted poker games between politicians and lobbyists, and the lobbyists always lost. Then there is the "book deal." A corrupt politician writes a crappy book, which becomes an instant bestseller due to mass purchases by PAC's and gazillionaires.

The internet provides an interesting opportunity with numerous small donations to election campaigns, using fake names and staying below the reporting thresholds.

With the collusion of a banking institution (offshore?) the money could be transferred from lots of accounts opened just for that purpose.

The real challenge would be the source of the funds, but an off-shore bank or credit card company would solve that. Because the people don't exist, no one complains about bogus charges on their account. The safeguards are in place to catch theft, not money laundering.

It would be especially easy if government regulators weren't paying attention, or were paid to look the other way. Someone with the right skills and computer program could do most of it from one location, if they were on the inside.

That would avoid the awkwardness of "bundling" where lobbyists' and corporate execs' families and employees are each reimbursed (wink, wink) for making the correct donations.

Always remember the most important rule: Don't attract attention!

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myiq2xu's picture
Submitted by myiq2xu on

Take a break when you finish and savor life.

------------------------------------------------
“I don't belong to any organized political party. I'm a Democrat.” - Will Rogers

tnjen's picture
Submitted by tnjen on

I'd love to learn more about this (hint, hint) or if you have any good web links/book recommendations... :)

That last scheme reminds me of this.
A British Couple whose card was stolen over a year ago and also canceled the card a year ago went to use their credit card and found out they'd "donated" to Barack Obama. It could be that someone did indeed make up a fake account but screwed up and hit a real one. They probably meant to use the canceled acct. and info as cover but the first bank that held the acct. never canceled it out properly -- new card number same core acct. number or some such error. I bet the original bank is frantic looking for an online/computer intrusion in their system that never took place.

BTW, I know the Sun is prone to tabloid journalism/exaggeration but I doubt they're making the story up -- just sensationalizing.

Submitted by [Please enter a... (not verified) on

This is a very thought provoking piece -- with information & detail that I've never heard of before. It's frightening, really.

orionATL's picture
Submitted by orionATL on

miq-

this is very intersting

and very educational and timely for me (i've been wondering how to launder my gain from a couple of banks i knocked over).

i understand you are thinking along the lines of internet contributions to the obama campaign,

but

the paragraph that got my attention is this one:

[Real estate is amazingly easy to transfer. In California all you need is a deed, a notary and a recording fee. The county recorder keeps records but there are no reporting triggers. If you have a crooked notary you can have all kinds of fun moving property around, until you sell it and “realize” the appreciation. ]

just before barrack obama bought his new mansion, an iraqi-born, british businessman named auchi, a business partner of chicago political fixer tony rezko, lent rezko $3.5 million.

within a few weeks, mr. obama had his dream house and rezko's wife had bought the lot next door. this is the deal that obama has referred to as "a boneheaded mistake"

see rezko watch and, specifically, evelyn pringle's investigative series "curtain time for barrack obama" for details.

if you can make sense of all this please post it. i'd love to read more.

myiq2xu's picture
Submitted by myiq2xu on

(officially his wife bought) was the undeveloped strip next door, that had been subdivided by the prior owners.

It sold at full price, but the house for slightly less than the asking price. The original owners wanted both sold at the same time. If Rezko's wife hadn't bought the undeveloped property, Obama couldn't have afforded to buy both properties and wouldn't have got the house.

Later Rezko's wife sold a 10-ft strip to the Obama's at a price proportionate to the entire lot, which appears legit until you consider that reducing the size of the undeveloped lot made it worth considerably less because it's now too small to develop.

The lot now belongs to one of Rezko's former attorneys who got it in lieu of fees owed. The Obama's have had free use of the lot since they bought the house, or at least until this story became news. Obama even paid to have the grass mowed.

You might call it a $625,000 loan that doesn't have to ever be repaid.

------------------------------------------------
“I don't belong to any organized political party. I'm a Democrat.” - Will Rogers

orionATL's picture
Submitted by orionATL on

thanks for the info.

i was thinking, actually hoping, the obama house purchase might be a lurking duke cunningham type of transaction.

looks like i don't got no luck on that tact.

myiq2xu's picture
Submitted by myiq2xu on

Rezko was supposedly broke when his wife bought the land, and so was she. The cash looks like it came from Namdi Auchi, the rich Arab guy Obama claims he never met but a witness at Rezko's trial testified Obama attended a meet-n-greet in Auchi's honor just after Obama was elected Senator (which coincidentally was when he bought the house.)

Actually, Obama said he "doesn't recall" meeting Auchi, a response that set off my bullshit detector.

That's the answer you give when you're not sure what investigators will discover so you want plausible deniability, i.e "I forgot."

------------------------------------------------
“I don't belong to any organized political party. I'm a Democrat.” - Will Rogers

A_B's picture
Submitted by A_B on

Reading this post reminds me of the Model Rules of Professional Conduct:

"A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law."

It reminds me of this because I know there's a certain standard required of attorneys in advocating particular positions before a tribunal, which this clearly is not. But there's an expectation that an attorney, as myiq2xu has admitted, in general will not make frivolous, and almost legally defamatory, arguments. This post flies in the face of this expectation and anyone with any shame should be embarrassed even making the argument.

Here and in a previous posting, the myiq2xu is alleging that Obama's books sales were part of a money laundering scheme. To wit, "Then there is the “book deal.” A corrupt politician writes a crappy book, which becomes an instant bestseller due to mass purchases by PAC’s and gazillionaires"

This is beyond the pale, and plainly refuted by facts that are readily available. Indeed, to make such an allegation assumes substantial factual basis. To borrow some legalese, to claim fraud requires a higher standard of pleading.

However, myiq2xu has nothing other than significant sales of Obama's books. A simple Google search for "obama book signing" (without quotes) will reveal thousands of articles discussing the thousands of people that showed up around the country to sign his book. A search will reveal images such as this tinyurl.com/6rlnrg showing standing room only crowds. It is indisputable that the sale of the book were strong because people bought it. Not some PAC. Not some millionaire trying to launder money.

Also, the so-called "crappy book" is widely lauded. A quick search of Amazon.com tinyurl.com/6optfl revealed numerous glowing reviews such as (some of the shorter ones):

“America’s founders set a high standard for political writing, and most contemporary efforts fall woefully short. How nice, then, to have a politician who can write as well as U.S. Sen. Barack Obama of Illinois. … The Audacity of Hope … is fascinating in its revelation of Obama as someone who considers and questions, rather than asserts and declares. In nine focused chapters, Obama shows himself an agile thinker. This is an idea book, not a public-policy primer.”
—Elizabeth Taylor, Philadelphia Daily News

“Not only is Obama a good writer, his mind is top-shelf, his heart tender.”
—Les Payne, Newsday

“A thoughtful, careful analysis of what needs to be done to preserve our freedoms in a time of terror.”
—Newton N. Minow, Chicago Tribune

"He is one of the best writers to enter modern politics."
—Jonathan Alter, Newsweek.com

"[Barack Obama] is that rare politician who can actually write- and write movingly and genuinely about himself...In these pages he often speaks to the reader as if he were an old friend from back in the day, salting policy recommendations with colorful asides about the absurdities of political life...[He] strives in these pages to ground his policy thinking in simple common sense...while articulating these venomous pre-election days, but also in these increasingly polarized and polarizing times."
—Michiko Katutani, New York Times

Despite readily available evidence that Obama's books sold thousands of copies to regular people, include those willing to wait in line for hours to have it signed by him, and almost unanimous critical acclaim for the book, myiq2xu, nevertheless, is willing to go so far as to claim that the book is part of a money laundering scheme (and also insinuated in a previous post, without any evidence, that Obama didn't even write the book).

It's a wholly irresponsible claim that has no factual basis.

I write this not to convince myiq2xu, who is willing to say things like Edwards is dead to him/her simply for endorsing Obama, and is obviously not one that is listening to reason at this point. Rather, I write this for the poor Googler who happens to stumble upon it at a later date and actually believes this idiocy has any merit.

Submitted by lambert on

Unfortunately, our famously free press has "thrown their support" to Obama, so we have no reliable sort of reporting whatever, not that it was very good.

Hence, we, undersourced and unfunded, have to try to work out the world for ourselves. As we point out in other portions of the post, there are plenty of reasons to consider money laundering operations. (My personal view is that Obama might have screwed his agent over on the book deal, but that money laundering is unlikely.)

Hey, I've got an idea! Why don't you go straighten out the press, which is making up more insane lies about Hillary even as we speak, instead of wailing on a C list blog? More productive all around, wouldn't you say?

[x] Any (D) in the general. [ ] ?????. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.

myiq2xu's picture
Submitted by myiq2xu on

“A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law.”

The Model Rules aren't the law anywhere, and there is no proceeding before any tribunal involved here. I don't represent anyone involved, and I'm not making any argument before any court of law.

I was however, making general statements about the law, which is perfectly acceptable within both the Model Rules and the rules in my jurisdiction.

I'm guessing A_B is what's commonly called a "Jailhouse Lawyer." Or as we attorneys call them: "fresh meat"

------------------------------------------------
“I don't belong to any organized political party. I'm a Democrat.” - Will Rogers

Submitted by lambert on

Why fresh?

[x] Any (D) in the general. [ ] ?????. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.

myiq2xu's picture
Submitted by myiq2xu on

and lawyers are carnivores, not carrion eaters.

------------------------------------------------
“I don't belong to any organized political party. I'm a Democrat.” - Will Rogers

orionATL's picture
Submitted by orionATL on

you rally are a long winded blowhard.

can i save you lots of typing strokes next time with this condensed version of your comment:

a-b- likes senator obnama.

it upsets a-b- for anyone to questions senator obama's character or investigate senator obama's prior actions, even if there is good reason to do so.

when a-b- is upset he expresses his deep distress by writing long-winded comments sprinkled with serious-sounding terms of disapprobation like "professional conduct" and "pales".

writing thusly, a-b- feels less unhappy.

Submitted by lambert on

... A_B cuts and pastes a whole bunch of jacket blurbs about Obama's book into his prolix response!

Oh, the credulity!

UPDATE And better news still, this post will come up when material in the jacket blurbs is Googled. Haw.

[x] Any (D) in the general. [ ] ?????. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.

orionATL's picture
Submitted by orionATL on

a-b-'s post is lovely instance of being hoist on one's own petard.

worse still, with that single stroke he also provided free publicity to the enemy.

bringiton's picture
Submitted by bringiton on

As I heard it, the phrase applies because they're still breathing when you gut them.

Aeryl's picture
Submitted by Aeryl on

A good 75% of the Left Blogs are getting their rocks off, imagining that Clinton is fantasizing about the assassination of Obama, yet we are concerned about money laundering, and that's a cause for the vapors.

Bill Clinton for First Dude!!!

Susie from Philly's picture
Submitted by Susie from Philly on

I found it fascinating because it was so well-written - actually TOO well-written, for someone who's done so little writing before. Because writing is something that you do over and over before you get really good at it. I don't care how much native talent you have, you still have to write to get good at it.

Which now leads me to wonder if, like Kennedy's "Profiles in Courage," it was actually written by someone else, someone who's written a lot.

Someone like David Axlerod, who's been working for four years now to mold the Obama legend.

http://www.nytimes.com/2007/04/01/magazi...

Submitted by lambert on

I always thought the "plagiarism" scandal was botched. I'm guessing that the real reason Obama and Patrick used the same script was that Axelrod gave them the same script -- consultants can always increase their margins by reselling the same work to more than one client.

So, it would be interesting to know if Patrick (the beta version of Obama) wrote a book and if so, what happened to it?

[x] Any (D) in the general. [ ] ?????. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.