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Can Somone Explaine to me what Money Laundering is

In a nutshell, it's a process by which "dirty" money (i.e. money obtained through illegal means) moves between parties several times until its origins can not be traced back.
 
Essentially using a front of some sort for illegally aquired money. Such as owning a legitimate business and counting said illegal funds as revenue. Or that's my understanding.
 
It's like to your Laundry... you are washing your illegally obtained money usually with a middleman like maybe an insider of a bank so it appears the money was legally obtained
 
For example, in the movie Mickey Blue Eyes, the Mafia put up a painting by one of the mob bosses for auction. Then, they had one of the mafia dudes purchase the crappy painting for a ridiculous amount of money, like several million dollars. This money is now legitimate earnings for the painter of the painting, so it's totally clean, legal money, as opposed to the dirty money it was before.
 
Criminals set up cash oriented businesses so they can move large sums of currency or they can use different businesses they own and lend or move money between them.
 
Originally posted by: junkerman123
For example, in the movie Mickey Blue Eyes, the Mafia put up a painting by one of the mob bosses for auction. Then, they had one of the mafia dudes purchase the crappy painting for a ridiculous amount of money, like several million dollars. This money is now legitimate earnings for the painter of the painting, so it's totally clean, legal money, as opposed to the dirty money it was before.
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that isnt money laundering.
 
Originally posted by: MrChad
Originally posted by: sao123
besides theft... how exactly is money "illegally obtained"?
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Drugs, extortion, black market sales, etc., etc.
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You'll launder legal money, too, to avoid paying taxes. I guess that's less "laundering" and more "hiding," but it's all part of the same game.
 
Originally posted by: IcebergSlim
Originally posted by: junkerman123
For example, in the movie Mickey Blue Eyes, the Mafia put up a painting by one of the mob bosses for auction. Then, they had one of the mafia dudes purchase the crappy painting for a ridiculous amount of money, like several million dollars. This money is now legitimate earnings for the painter of the painting, so it's totally clean, legal money, as opposed to the dirty money it was before.
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that isnt money laundering.
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if the painter then pays some of the money back to the mob, it is.

 
so is this more of a secondary crime --a crime always accompanying another greater charge? -- You're already going to jail for several years, lets make sure its even longer...

or is this more of a "we cant prove you committed the real crime, so well arrest and convict you on this one." and you go to jail anyways...
 
Originally posted by: sao123
so is this more of a secondary crime --a crime always accompanying another greater charge? -- You're already going to jail for several years, lets make sure its even longer...

or is this more of a "we cant prove you committed the real crime, so well arrest and convict you on this one." and you go to jail anyways...
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more so the second case. They cant prove your dealing drugs but they can prove that you didnt pay your taxes on the money or you tried to hide your iincome.
 
Moving money around, so that it is untracable.

The reason to doing this is tax evasion, fibbing on income of business, criminal money...

Oooo... a big one counterfeiting. I think that is where the laundering part comes from. They would wash and dry the counterfeit money to make it seem more real.
 
Originally posted by: sao123
so is this more of a secondary crime --a crime always accompanying another greater charge? -- You're already going to jail for several years, lets make sure its even longer...

or is this more of a "we cant prove you committed the real crime, so well arrest and convict you on this one." and you go to jail anyways...
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tax evasion. gotten a lot of people on those charges.
 
Originally posted by: brandonbull
Originally posted by: IcebergSlim
Originally posted by: junkerman123
For example, in the movie Mickey Blue Eyes, the Mafia put up a painting by one of the mob bosses for auction. Then, they had one of the mafia dudes purchase the crappy painting for a ridiculous amount of money, like several million dollars. This money is now legitimate earnings for the painter of the painting, so it's totally clean, legal money, as opposed to the dirty money it was before.
Click to expand...

that isnt money laundering.
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if the painter then pays some of the money back to the mob, it is.
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no thats not concealing source of money at all. IRS is like hey mafia dude we noticed you purchased this painting at the auction for a rediculous amount of money. your w-2 only says you made 60k last year. mind explaining this for us?
 
Originally posted by: sao123
so is this more of a secondary crime --a crime always accompanying another greater charge? -- You're already going to jail for several years, lets make sure its even longer...

or is this more of a "we cant prove you committed the real crime, so well arrest and convict you on this one." and you go to jail anyways...
Click to expand...

I worked for a very large stock broker. We had an entire department dedicated to auditing accounts for the sole purpose of money laundering and suspicious activity.

In many cases noticing activities that are considered suspicious are the first ways of tracking down a more sinister plan. Since we are currently quite sensitive to terrorism, it's an easy thing to make an example of. We were constantly on the lookout for large chunks of money moving back and forth from certain countries/certain names. It's just a really hot topic and we were very aware of activities that were happening in certain accounts.

People could use their brokerage account as a way of depositing bad money, buying & selling stocks, then taking the profits and routing them to another acount, buying & selling stocks, and then running them to a bank. But the plots are much more complex than that. At one time, we had a laundering scheme that had over 250 legs attached to it. A "leg" is simply a transaction from one account to another. It was crazy how elaborate the scheme was.
 
a better example would be cash is smuggled out of the country and put into an offshore account. A phoney company is also set up offshore and usees this cash as capital. The phoney company sets up phoney work contracts with an US company. There really is no work going on between the companies but money is exchanged as if there is. THe american company takes this money as profits and distributes it out to its "employees" who legally report it as taxable money. or expense all sorts of personal items as business expenses to avoid the taxes.
 
For most small time people, like local drug dealers (think weed here), the people open up a legitimate business and actually hire a couple of people. A common one is a lawn care service, since they "cut the grass". The idea is that the service does a small amount of legitiment work, enough to pass unnoticed, but claims some or all of the revenue from drug sales as profit, which is then reported to the IRS and can be deposited in the bank. So, you end up paying taxes on the money, but the money is "clean". That is, you don't have to conduct all your transactions in cash, and you don't have to explain the source of the money itself.

R
 
Originally posted by: rgwalt
For most small time people, like local drug dealers (think weed here), the people open up a legitimate business and actually hire a couple of people. A common one is a lawn care service, since they "cut the grass". The idea is that the service does a small amount of legitiment work, enough to pass unnoticed, but claims some or all of the revenue from drug sales as profit, which is then reported to the IRS and can be deposited in the bank. So, you end up paying taxes on the money, but the money is "clean". That is, you don't have to conduct all your transactions in cash, and you don't have to explain the source of the money itself.

R
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ANother common one is the crack game disguised as rap. Crack dealers use profits and open "recording studios" and the Open "record labels" and sign "artists"

Again there may be legitamate money being exchanged for use of a studio or when an artist performs or from cd sales. But how easy would it be to set up a deal to go down in the studio and write it off as producing a new track. For instance gangsta a is buying crack from the studio owner. The studio own marks off tuesday as the day the deal will go down. When doing his book keeping he writes down that he charged gagsta a $10,000.00 for use of the studio for the day. Gangsta A comes in the studio lays down some vocals and get handed the drugs. Gangsta A hands over the cash. That cash IS CLEAN to the eyes of the govt. The label Takes the track that Gangsta A records and publishes a cd. The label writes off the costs of the printing the cd and then lies about about how many cds it sold. further creating more clean money for future deals.

its actually pretty smart.
 
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