4 ms·

Everyone is missing the point, this is an example of money laundering 1. Get dirty cash from drug sales, prostitution, etc and buy amazon.com giftcards in shop

by yc1010 11y ago

Everyone is missing the point, this is an example of money laundering 1. Get dirty cash from drug sales, prostitution, etc and buy amazon.com giftcards in shops in US 2. Input the codes into various amazon buyer account(s) 3. Buy the book(s) from these account(s) 4. Amazon takes a cut and pays clean money into authors bank account.

martin-adams 11y ago
I like this. You would have to use gift cards in store to dispose of the cash, and even at $100 gift cards, you'd be looking at 236,987 cards to purchase before you can buy the book. I used to have Play.com vouchers through my credit card and wanted to buy a new camera, only the listings were from dodgy sellers and £100 more than Amazon. I did think about listing an item, then buying it myself to convert it to cash.
- yc1010 11y ago
  Well 23 million is a bit of an overkill and I am sure Amazon would raise flags at some stage! but if you look on amazon for products in the 500-1000 range such as electronics (where amazon only takes 6-8% commission) there are plenty of examples of 3rd parties SOMEHOW selling new electronics below amazon itself! These guys are willing to lose 6-8% on lets say a hard drive and another few % to undercut Amazon from whom they would buy in first place
  - paulcole 11y ago
    If someone is paying less than Amazon, they can easily undercut. Additionally, what if they'd been selling the product and then Amazon comes along and wins the buy box. A 3p seller might be willing to take a loss to just sell out remaining product to reinvest in a new item that Amazon isn't selling yet. There are a few other situations I can think of too where someone would undercut Amazon, even if it meant losing money. There's really no way to understand someone's business model by only looking at their price.
bluedevil2k 11y ago
The best? Amazon takes a 30% cut and then the government (here in the US) takes another 28% for income tax, 12.4% for SSN, and 2.9% for Medicare. You get less than half your cash into clean money. Plus, there's a huge paper trail of buyers and the million dollar book would likely set off flags on every sale.
- yc1010 11y ago
  See my 2nd comment below, this is definitely happening in electronics section where Amazon fees are smaller. Losing ~20% is not too bad when clean money from a reputable source arrives in your bank account, if you are reselling lets say hard drives or phones.
- tdees40 11y ago
  People buy lottery tickets as a way to launder money. This really isn't so bad by comparison.
- mcv 11y ago
  To go from money you can't use to money you can use, that's not a bad deal, actually. But selling a million dollar book is probably too conspicuous. It's better to do this with something that's actually worth that much.
Angostura 11y ago
That doesn't seem like a terribly good way of laundering money. It leaves an extensive trail and I would have thought that transactions like that would set of several klaxons at Amazon HQ
- yc1010 11y ago
  These guys are not terribly bright in some cases One could also buy amazon.com giftcards with cash in shops in US (no questions asked) then sell them on localbitcoins.com (go check it out > https://localbitcoins.com/buy-bitcoins-online/usd/amazon-gift-card-code/ https://localbitcoins.com/buy-bitcoins-online/usd/amazon-gif...) for bitcoins losing about 20-30% in fees to get bitcoin. Once you have bitcoin....
hellofunk 11y ago
I'm a bit confused ... the article claims this is a symptom of unexpected algorithmic behavior, but you are saying what actually happened was due to money laundering?
deleted 11y ago
[deleted]
inversionOf 11y ago
I worked for years on AML systems for banks. This isn't money laundering. Indeed, I don't believe I've ever seen a "this is money laundering!" comment on a social news site that wasn't entirely and completely off the mark of real money laundering, but just seems to be a go-to for things that people don't understand.
- ma2rten 11y ago
  How does real money laundering work? Do you think that the other comments about electronics being sold for money laundering are also off mark? Also how realistic was breaking bad, where they brought a carwash and put it in some fake receipts.
  - drzaiusapelord 11y ago
    Not a criminal, but someone interested in this kind of thing. From what I've read and heard, cash-based businesses are best because its really hard to prove otherwise. The IRS is going to see a car wash doing $1m a year in sales and that'll be it. It can't access any other records to prove otherwise because you're a mostly, if not all, cash business. You become your own customer and funnel your money into the company. You would easily survive an audit here. So any cash-based business is good. Restaurants, car washes, pawn shops, bars/clubs, etc. These types of businesses can make thousands per day gross and are relatively easy to run with low capital down. That's going to be far superior than shipping hundreds of overpriced hard drives per week via e-commerce and hoping to god no one traces back all these credit cards back to you or your pals.
    - jon-wood 11y ago
      With something like a bar can't the IRS demand to see receipts for the drinks you've bought, and realise you've sold $100,000 worth of whiskey, but only actually bought a few bottles?
      - drzaiusapelord 11y ago
        Probably. If you want to be audit proof you can keep your inventory sane. The nice part about these businesses is that they're all high margin. Your wholesaler cost for whiskey may have only been $1,000 that month and arguably you could have made $50,000 in whiskey sales considering the cost per shot at a upscale or even non-dive club. You can learn the basics of accounting and laundering over a weekend if you had to and learn just enough to avoid being flagged by the IRS. Hell, some accountants specialize in these kinds of things. I also think that you need to accept some level of risk here and that you'll be dealing with audits periodically. Auditing isn't some scary process, more than likely you'll be dinged for more taxes and not be put in jail. You'll come out ahead, especially when you consider outsourcing laundering is very expensive, something like 50-70% and depending on how it comes back to you, that money is also taxable, so another 25% lost on what's left. Running your own business means you only lose that 25% and some overhead.

by yc1010 11y ago

martin-adams 11y ago

I like this. You would have to use gift cards in store to dispose of the cash, and even at $100 gift cards, you'd be looking at 236,987 cards to purchase before you can buy the book. I used to have Play.com vouchers through my credit card and wanted to buy a new camera, only the listings were from dodgy sellers and £100 more than Amazon. I did think about listing an item, then buying it myself to convert it to cash.

yc1010 11y ago
Well 23 million is a bit of an overkill and I am sure Amazon would raise flags at some stage! but if you look on amazon for products in the 500-1000 range such as electronics (where amazon only takes 6-8% commission) there are plenty of examples of 3rd parties SOMEHOW selling new electronics below amazon itself! These guys are willing to lose 6-8% on lets say a hard drive and another few % to undercut Amazon from whom they would buy in first place
- paulcole 11y ago
  If someone is paying less than Amazon, they can easily undercut. Additionally, what if they'd been selling the product and then Amazon comes along and wins the buy box. A 3p seller might be willing to take a loss to just sell out remaining product to reinvest in a new item that Amazon isn't selling yet. There are a few other situations I can think of too where someone would undercut Amazon, even if it meant losing money. There's really no way to understand someone's business model by only looking at their price.

bluedevil2k 11y ago

The best? Amazon takes a 30% cut and then the government (here in the US) takes another 28% for income tax, 12.4% for SSN, and 2.9% for Medicare. You get less than half your cash into clean money. Plus, there's a huge paper trail of buyers and the million dollar book would likely set off flags on every sale.

yc1010 11y ago
See my 2nd comment below, this is definitely happening in electronics section where Amazon fees are smaller. Losing ~20% is not too bad when clean money from a reputable source arrives in your bank account, if you are reselling lets say hard drives or phones.
tdees40 11y ago
People buy lottery tickets as a way to launder money. This really isn't so bad by comparison.
mcv 11y ago
To go from money you can't use to money you can use, that's not a bad deal, actually. But selling a million dollar book is probably too conspicuous. It's better to do this with something that's actually worth that much.

Angostura 11y ago

That doesn't seem like a terribly good way of laundering money. It leaves an extensive trail and I would have thought that transactions like that would set of several klaxons at Amazon HQ

yc1010 11y ago
These guys are not terribly bright in some cases One could also buy amazon.com giftcards with cash in shops in US (no questions asked) then sell them on localbitcoins.com (go check it out > https://localbitcoins.com/buy-bitcoins-online/usd/amazon-gift-card-code/ https://localbitcoins.com/buy-bitcoins-online/usd/amazon-gif...) for bitcoins losing about 20-30% in fees to get bitcoin. Once you have bitcoin....

hellofunk 11y ago

I'm a bit confused ... the article claims this is a symptom of unexpected algorithmic behavior, but you are saying what actually happened was due to money laundering?

deleted 11y ago

[deleted]

inversionOf 11y ago

I worked for years on AML systems for banks. This isn't money laundering. Indeed, I don't believe I've ever seen a "this is money laundering!" comment on a social news site that wasn't entirely and completely off the mark of real money laundering, but just seems to be a go-to for things that people don't understand.

ma2rten 11y ago
How does real money laundering work? Do you think that the other comments about electronics being sold for money laundering are also off mark? Also how realistic was breaking bad, where they brought a carwash and put it in some fake receipts.
- drzaiusapelord 11y ago
  Not a criminal, but someone interested in this kind of thing. From what I've read and heard, cash-based businesses are best because its really hard to prove otherwise. The IRS is going to see a car wash doing $1m a year in sales and that'll be it. It can't access any other records to prove otherwise because you're a mostly, if not all, cash business. You become your own customer and funnel your money into the company. You would easily survive an audit here. So any cash-based business is good. Restaurants, car washes, pawn shops, bars/clubs, etc. These types of businesses can make thousands per day gross and are relatively easy to run with low capital down. That's going to be far superior than shipping hundreds of overpriced hard drives per week via e-commerce and hoping to god no one traces back all these credit cards back to you or your pals.
  - jon-wood 11y ago
    With something like a bar can't the IRS demand to see receipts for the drinks you've bought, and realise you've sold $100,000 worth of whiskey, but only actually bought a few bottles?
    - drzaiusapelord 11y ago
      Probably. If you want to be audit proof you can keep your inventory sane. The nice part about these businesses is that they're all high margin. Your wholesaler cost for whiskey may have only been $1,000 that month and arguably you could have made $50,000 in whiskey sales considering the cost per shot at a upscale or even non-dive club. You can learn the basics of accounting and laundering over a weekend if you had to and learn just enough to avoid being flagged by the IRS. Hell, some accountants specialize in these kinds of things. I also think that you need to accept some level of risk here and that you'll be dealing with audits periodically. Auditing isn't some scary process, more than likely you'll be dinged for more taxes and not be put in jail. You'll come out ahead, especially when you consider outsourcing laundering is very expensive, something like 50-70% and depending on how it comes back to you, that money is also taxable, so another 25% lost on what's left. Running your own business means you only lose that 25% and some overhead.