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What they want to track with prepaid cards is money laundering. And this is not money laundering of the corner drug dealer, it is the laundering of the wealth

by toss1 6y ago

What they want to track with prepaid cards is money laundering. And this is not money laundering of the corner drug dealer, it is the laundering of the wealth of entire nations by transnational crime syndicate masquerading as governments (e.g., see RUS, VNZ), and transnational gangs which are large enough to warrant military attention, which is currently driving geopolitics. And yes, your tiny prepaid card is probably an irrelevant bit of collateral damage in that picture, but that is why they'll ask your name. And, no, FINCEN DGAF if you spend it at any of those places. They DO care if it turns out some of those places are laundering a lot of crime money, and they DO care if you get dozens of those cards and spend 90% of it at one of the launderer's places. they will also care if you are working in a scam organization that convinces marks to send payment as prepaid card codes, and you are cashing those cards... If it is untraceable and at all scaleable, you can guarantee that organized crime is using it to launder money, and that there will be real efforts to make it traceable.

AnthonyMouse 6y ago
> And this is not money laundering of the corner drug dealer, it is the laundering of the wealth of entire nations by transnational crime syndicate masquerading as governments (e.g., see RUS, VNZ), and transnational gangs which are large enough to warrant military attention, which is currently driving geopolitics. The problem is that it doesn't actually work for organizations with that level of resources. A multi-billion dollar criminal enterprise doesn't need prepaid cards to launder their money. They can buy arbitrary amounts of soybeans or crude oil or laundry detergent. There is nothing suspicious or even illegal about a shipping container full of soybeans. Anybody can cook up some books that say that Alice paid Bob a billion dollars for soybeans and Bob paid Alice a billion dollars for licensing intellectual property netting to zero, when it was really a billion dollars under the table and the intellectual property was worthless. Then the commodity goes to whatever country, get sold on the commodity market there and turns back into money. That's assuming they don't just use Bitcoin. That's assuming they don't just keep doing this: https://www.icij.org/investigations/fincen-files/hsbc-moved-vast-sums-of-dirty-money-after-paying-record-laundering-fine/ https://www.icij.org/investigations/fincen-files/hsbc-moved-... Anti-money laundering laws are a failed experiment. They don't work. They cost far more than they're worth.
- toss1 6y ago
  >>The problem is that it doesn't actually work for organizations with that level of resources. Obviously, this is not their sole means of laundering, and your other examples are some likely ploys at other scales. But any large scale organized crime venture is fractal, it goes from the global scale, all the way down to the entry-level neighborhood crooks, and your shipping or IP ploy doesn't work for a wide range of scams, but $billions in small-scale cards do. Same for BTC, where you can transfer billions, but how do you smurf out $1billion into $USD? it's got to be 101K++ transactions under $10K, and widely distributed. What your article proves is that your last line is completely wrong. The criminal breaking the law again means that the applied penalty was an insufficient deterrent. The prosecutors and judges did not apply sufficient penalties. Cutting the profits of HBSC is insufficient, they need to apply the tracking and *jail* the mgt/execs that allow it. The Anti-money laundering laws work *to the extent that they are enforced*. Lack of enforcement does not mean the law doesn't work. Your small desire to evade a nonexistent and ineffective scrutiny about where you spend your VISA gift card does not outweigh the need for the still-democratic countries to attempt to survive an onslaught of transnational organized crime attempting to implement autocracies to enable their crime.
  - AnthonyMouse 6y ago
    > But any large scale organized crime venture is fractal, it goes from the global scale, all the way down to the entry-level neighborhood crooks, and your shipping or IP ploy doesn't work for a wide range of scams, but $billions in small-scale cards do. But there are thousands of other methods, arbitrarily many, for doing the same thing at any scale. > Same for BTC, where you can transfer billions, but how do you smurf out $1billion into $USD? it's got to be 101K++ transactions under $10K, and widely distributed. I'm not really seeing the difference. Option one, the dealers make $9000 in cash, go buy $9000 worth of some non-perishable commodity and put it in a shipping container. Repeat until the shipping container is full, then ship it to the place they want the money to end up. Option two, do the same thing with Bitcoin. All they need is someone willing to sell Bitcoin for cash. > The prosecutors and judges did not apply sufficient penalties. The War on Drugs fallacy. "The problem isn't that the entire thing is an exercise in futility, it's that the penalty isn't high enough." The criminals discount the penalty regardless of what it is because they don't expect to get caught. They're often right. > Your small desire to evade a nonexistent and ineffective scrutiny about where you spend your VISA gift card You've being overly flippant about the legitimate concerns and chilling effects of surveillance on vulnerable populations who have to worry about not only what the data is used for today, but what will happen to them if the winds change and the data on what they do today is still in the database five years from now. > the need for the still-democratic countries to attempt to survive an onslaught of transnational organized crime attempting to implement autocracies to enable their crime. Or you could just decriminalize drugs and put them all out of business.

by toss1 6y ago

AnthonyMouse 6y ago

> And this is not money laundering of the corner drug dealer, it is the laundering of the wealth of entire nations by transnational crime syndicate masquerading as governments (e.g., see RUS, VNZ), and transnational gangs which are large enough to warrant military attention, which is currently driving geopolitics. The problem is that it doesn't actually work for organizations with that level of resources. A multi-billion dollar criminal enterprise doesn't need prepaid cards to launder their money. They can buy arbitrary amounts of soybeans or crude oil or laundry detergent. There is nothing suspicious or even illegal about a shipping container full of soybeans. Anybody can cook up some books that say that Alice paid Bob a billion dollars for soybeans and Bob paid Alice a billion dollars for licensing intellectual property netting to zero, when it was really a billion dollars under the table and the intellectual property was worthless. Then the commodity goes to whatever country, get sold on the commodity market there and turns back into money. That's assuming they don't just use Bitcoin. That's assuming they don't just keep doing this: https://www.icij.org/investigations/fincen-files/hsbc-moved-vast-sums-of-dirty-money-after-paying-record-laundering-fine/ https://www.icij.org/investigations/fincen-files/hsbc-moved-... Anti-money laundering laws are a failed experiment. They don't work. They cost far more than they're worth.

toss1 6y ago
>>The problem is that it doesn't actually work for organizations with that level of resources. Obviously, this is not their sole means of laundering, and your other examples are some likely ploys at other scales. But any large scale organized crime venture is fractal, it goes from the global scale, all the way down to the entry-level neighborhood crooks, and your shipping or IP ploy doesn't work for a wide range of scams, but $billions in small-scale cards do. Same for BTC, where you can transfer billions, but how do you smurf out $1billion into $USD? it's got to be 101K++ transactions under $10K, and widely distributed. What your article proves is that your last line is completely wrong. The criminal breaking the law again means that the applied penalty was an insufficient deterrent. The prosecutors and judges did not apply sufficient penalties. Cutting the profits of HBSC is insufficient, they need to apply the tracking and *jail* the mgt/execs that allow it. The Anti-money laundering laws work *to the extent that they are enforced*. Lack of enforcement does not mean the law doesn't work. Your small desire to evade a nonexistent and ineffective scrutiny about where you spend your VISA gift card does not outweigh the need for the still-democratic countries to attempt to survive an onslaught of transnational organized crime attempting to implement autocracies to enable their crime.
- AnthonyMouse 6y ago
  > But any large scale organized crime venture is fractal, it goes from the global scale, all the way down to the entry-level neighborhood crooks, and your shipping or IP ploy doesn't work for a wide range of scams, but $billions in small-scale cards do. But there are thousands of other methods, arbitrarily many, for doing the same thing at any scale. > Same for BTC, where you can transfer billions, but how do you smurf out $1billion into $USD? it's got to be 101K++ transactions under $10K, and widely distributed. I'm not really seeing the difference. Option one, the dealers make $9000 in cash, go buy $9000 worth of some non-perishable commodity and put it in a shipping container. Repeat until the shipping container is full, then ship it to the place they want the money to end up. Option two, do the same thing with Bitcoin. All they need is someone willing to sell Bitcoin for cash. > The prosecutors and judges did not apply sufficient penalties. The War on Drugs fallacy. "The problem isn't that the entire thing is an exercise in futility, it's that the penalty isn't high enough." The criminals discount the penalty regardless of what it is because they don't expect to get caught. They're often right. > Your small desire to evade a nonexistent and ineffective scrutiny about where you spend your VISA gift card You've being overly flippant about the legitimate concerns and chilling effects of surveillance on vulnerable populations who have to worry about not only what the data is used for today, but what will happen to them if the winds change and the data on what they do today is still in the database five years from now. > the need for the still-democratic countries to attempt to survive an onslaught of transnational organized crime attempting to implement autocracies to enable their crime. Or you could just decriminalize drugs and put them all out of business.