money laundering through construction?? (1 Viewer)

[guidomerkinsrules]

Never thought of this, but our move away from using cash and toward using debit cards for every sort of purchase must have put a dent in someone’s ability to launder money through the everyday businesses like a restaurant or other storefront. I imagine the percent of people paying cash for anything has really gone down.

Hence bitcoins

 

[SystemShock]

What about a casino boat? Would that offer efficient cover?

I am not familiar with casino regulations, but I'd imagine they are heavily regulated and monitored with an eagle eye because of the potential for money laundering. So I don't know how efficient it'd be. You still could do it, but depending on regulations, oversight, how other casinos do around you, etc., it could be a costly and/or slow process if you want to keep it believable.

For the Ozark show, a casino boat does enough for the viewer's suspension of disbelief: the idea of a relatively small operation, all cash, where people spend thousands of unrecorded discretionary income dollars.

 

[Le_fleur_fan_78]

What about a casino boat? Would that offer efficient cover?

Somebody has watched the Netflix show Ozark I take it? I highly recommend it if not.

 

[Big_L]

@dtc i think you might be the best for this, but others feel free to chime in
so if you were in house construction/remodeling - how/what would you do to kick money back into your pocket?
(*maybe that's not technically money laundering, but fraud or something)

I say build a wall that isn't needed. Up the amount needed for construction. Make it so your homeboy will supply the materials. Sit back and watch the dollars roll in.. Wait, wrong forum.

 

[You]

What about a casino boat? Would that offer efficient cover?

I could see that working but not on the level that they’d need for the amounts of money he’s being asked to launder. The new orleans land based casino runs 20mm a month. How could a small boat in missouri even come close to that?

 

[FullMonte]

I think you're on the right track with gambling - take your "winnings" (most likely losses), and then deposit that into the bank. I'm actually wondering why lotteries aren't abused this way - just buy every ticket combo and you'll be guaranteed to win. It looks like you converted a small, unsuscpious amount of money into large winnings. Of course you have the problem the pot is split sometimes.

The problem with that is that it's basically impossible to do. Take the Louisiana Lottery. Your odds of winning are 1 in 3,838,380. So, you'd have to purchase 3,838,380 tickets to ensure you win. So, if you were to do that, and the prize had risen to $5,000,000, you've converted $3.8 million into $5 million. After taxes, you've converted $3.8 million into just under $3 million. So, you'd need to see a jackpot in excess of $7 million in order to see a reasonable return on your money. And, as you said...there is always the chance of having to split the pot.

Then, there is the problem of buying tickets. You would need to purchase 3.8 million tickets. Let's say you had 10 lottery machines available 24/7, and let's assume they are printing out tickets at a rate of 40 per minute (that's 8 tickets with 5 sets of numbers). It would take you more than 6 days to print out the tickets. That means you couldn't possibly print out all of the combinations between drawings, so you have the possibility of spending alot of money and having someone win the big prize before you have completed printing your tickets.

 

[DCSaints_Fan]

The problem with that is that it's basically impossible to do. Take the Louisiana Lottery. Your odds of winning are 1 in 3,838,380. So, you'd have to purchase 3,838,380 tickets to ensure you win. So, if you were to do that, and the prize had risen to $5,000,000, you've converted $3.8 million into $5 million. After taxes, you've converted $3.8 million into just under $3 million. So, you'd need to see a jackpot in excess of $7 million in order to see a reasonable return on your money. And, as you said...there is always the chance of having to split the pot.

Then, there is the problem of buying tickets. You would need to purchase 3.8 million tickets. Let's say you had 10 lottery machines available 24/7, and let's assume they are printing out tickets at a rate of 40 per minute (that's 8 tickets with 5 sets of numbers). It would take you more than 2 months to print out that many tickets. Even with 100 dedicated lottery machines, you won't be able to guarantee that you printed all of the tickets between the end of one drawing and the next drawing...so, you have the chance of buying all those tickets and having someone win before you can collect.

Well a while back, a group of students at MIT did just that with the Massachusetts lottery http://newsfeed.time.com/2012/08/07...mmed-the-massachusetts-lottery-for-8-million/ In this case, it wasn't money laundering - they actually made money.

I think you can get the forms for free. Then you just run them printer. Lottery would have to be small t hough - probably impractical for something like Powerball/mega millions.

 

[efil4stnias]

What about a casino boat? Would that offer efficient cover?

its been tried.

 

[efil4stnias]

I don't see how that is good for laundering ... where does the 10k/7k whatever come from in the first place?

Let's say I'm a drug dealer/distributor high enough up the food chain that I want to purchase things like houses/cars without drawing the attention of the IRS/DEA/other LEO. My income is almost all in cash, as drug users generally don't pay with a credit card. Generally, this needs to involve a bank, as a trading big pile of cash for a car or house is going to look suspicious and I believe there are also reporting requirements for those as well.

So what do I do with this big pile of cash? I can't just deposit into a bank, as they have reporting requirements. And its not just the $10k rule anymore, if the payments look "structured" such as to get around the requirement, they can and will report it, and the account may be seized, and you have to prove the income was legit to get it back:

https://www.nytimes.com/2014/10/26/...-accounts-on-suspicion-no-crime-required.html

So you have to make it look like the income is legitimate. One way to do it is if you have a business where customers often, or maybe even required, to pay in cash, such as restaurant. What you can then do is buy your supplies with cash, then report sales as legit income. Of course a there is a limit to how much you can launder this way, as your reported profit would have to be in line with what is typical given its location/etc.. Actually, I think thats one reason why some businesses go all cash. I'm sure LEO know the % of customers are going to choose cash over credit, and if you are reporting a much higher % than usual, it looks suspicious. But if you require cash, then 100% of your sales are in cash, and its much harder to trace. Although if someone looks really closely, they would know you're up to something. But it might involve say a stakeout to determine # of customers on a typical day. which would be time consuming unless they really had it in for you.

Edit: Ok, I see where you're coming from. But money laundering and tax evasion are two different things. And in general, money laundering is specifically done, so they can be taxed on the full income amount, so they don't get hit with tax evasion on top of whatever crime they are comitting.

yeah this was more of a two-pronged question originally- tax evasion vs actual laundering.

which is why in my answers i was kinda offering both sides.

They could also be "investing" the cash for private equity transactions ( involving themselves in a new development, construction etc ) - i just dont know what the reporting requirements would be regarding a "silent investor" type situation.

 

[GeauxWhoDats]

Owning a Repair Garage and holding a Political Office is an option.

 

[dtc]

The problem with that is that it's basically impossible to do. Take the Louisiana Lottery. Your odds of winning are 1 in 3,838,380. So, you'd have to purchase 3,838,380 tickets to ensure you win. So, if you were to do that, and the prize had risen to $5,000,000, you've converted $3.8 million into $5 million. After taxes, you've converted $3.8 million into just under $3 million. So, you'd need to see a jackpot in excess of $7 million in order to see a reasonable return on your money. And, as you said...there is always the chance of having to split the pot.

Then, there is the problem of buying tickets. You would need to purchase 3.8 million tickets. Let's say you had 10 lottery machines available 24/7, and let's assume they are printing out tickets at a rate of 40 per minute (that's 8 tickets with 5 sets of numbers). It would take you more than 6 days to print out the tickets. That means you couldn't possibly print out all of the combinations between drawings, so you have the possibility of spending alot of money and having someone win the big prize before you have completed printing your tickets.

If you spend 3.8 million on lottery tickets with 1 to 1 odds and you win 5 mill, your taxable income will only be on the 1.2 which might be 50 percent on lottery proceeds so it' snot as bad as you're thinking. You'd have turned 3.8 into 4.4 because teh 3.8 expense would net out.

 

[FullMonte]

Well a while back, a group of students at MIT did just that with the Massachusetts lottery http://newsfeed.time.com/2012/08/07...mmed-the-massachusetts-lottery-for-8-million/ In this case, it wasn't money laundering - they actually made money.

But in their case, they only purchased 700,000 tickets, and it wasn't a one number combination wins the prize lottery. If there was no winner, and the prize was over a certain amount, if their was no winner, the prize money is added to lower tiers of winners. For example, let's say the Powerball had one, they might say that if the prize gets above $250,000,000, and no one wins, then every person who matched 5 numbers, but not the powerball (normally a $1 million prize) would split the money. If no one won that, then everyone who matched 4 numbers and the powerball would split the money.

I think you can get the forms for free. Then you just run them printer. Lottery would have to be small though - probably impractical for something like Powerball/mega millions.

Again, the problem is with the time. They had to purchase 700,000 tickets over a period of weeks. The Louisiana Lottery wouldn't offer that option, as trying that could end up with a situation where someone won before the drawing you purchased tickets for...because it's practically impossible, unless you have a lot of people helping you (and they have to get a cut,too--lessening your return on investment) to purchase almost 4 million tickets between drawings.

If you spend 3.8 million on lottery tickets with 1 to 1 odds and you win 5 mill, your taxable income will only be on the 1.2 which might be 50 percent on lottery proceeds so it' snot as bad as you're thinking. You'd have turned 3.8 into 4.4 because teh 3.8 expense would net out.

Does it work that way? Can you deduct the cost of your lottery tickets from your winnings?

 

[SystemShock]

The new orleans land based casino runs 20mm a month.

So they say

 

[dtc]

But in their case, they only purchased 700,000 tickets, and it wasn't a one number combination wins the prize lottery. If there was no winner, and the prize was over a certain amount, if their was no winner, the prize money is added to lower tiers of winners. For example, let's say the Powerball had one, they might say that if the prize gets above $250,000,000, and no one wins, then every person who matched 5 numbers, but not the powerball (normally a $1 million prize) would split the money. If no one won that, then everyone who matched 4 numbers and the powerball would split the money.

I think you can get the forms for free. Then you just run them printer. Lottery would have to be small though - probably impractical for something like Powerball/mega millions.

Again, the problem is with the time. They had to purchase 700,000 tickets over a period of weeks. The Louisiana Lottery wouldn't offer that option, as trying that could end up with a situation where someone won before the drawing you purchased tickets for...because it's practically impossible, unless you have a lot of people helping you (and they have to get a cut,too--lessening your return on investment) to purchase almost 4 million tickets between drawings.



Does it work that way? Can you deduct the cost of your lottery tickets from your winnings?[/QUOTE]

You certainly would on your income tax forms.

 

[BooBirdSaint]

Serious money laundering around construction normally happens way before any actual construction. Money laundering on a scale to make it worth the trouble for any criminal organization normally takes place in the real estate phase. Someone looking to launder money will make a down payment (with drug money for example) on a project or property then turn around and sell it to create a legitimate transaction. Most often the sale is at a loss as they are not in the deal the "make" money just to legitimize the transaction. However, with new banking laws and Know Your Customer rules it is very difficult to conduct these kind of laundering transactions because the down payment and individual or company making the down payment are heavily scrutinized.

Most drug cartels are laundering their money though corporate transactions now. As an example a phony company in Mexico (Mexico is over run with fake and phony companies) contracts with Caterpillar to buy 1 million dollars worth of tractors. They then take the tractors and sell them at 50% of the value (normally in a 3rd region like Africa or China) but the 500k they make is "washed" via the transaction. They aren't concerned about making money just making the money they do get "legitimate" via the transaction.

You can often find these laundering companies buy looking on State websites. As an example Company A was inexistence for only one year and it closed due to bankruptcy. Most legitimate business even if they are losing money will try for 2 or 3 years before folding up shop. Anyone looking to wash cash wants to be in and out so 12 months is likely enough time. You can also cross check companies that have declared bankruptcy after one year and have tax liens against them as criminals don't pay taxes...