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Greatly informative piece about shady characters laundering money in the US at a pretty large scale by investing in, or outright buying, struggling US businesse
by cs702 6y ago
Greatly informative piece about shady characters laundering money in the US at a pretty large scale by investing in, or outright buying, struggling US businesses such as steel mills.
Managers and employees think they're getting a lifeline. In reality they're getting a new owner who cares very little about the long-term health of the operation and the safety and well-being of its employees.
The new owner will use financial engineering to extract as much cash as possible while cutting capital expenditures as much as possible. Eventually, the business will have no choice but to file for bankruptcy. Along the way, all cash paid out of the business will have been legitimized.
Employees and towns suffer the consequences. Ugly and sad.
- pinkybanana 6y agoI would guess that if you are laundering money, launderer would happily spend extra money on safety and other issues to prevent getting too much attention. Here the case sounds like if the laundering oligarch hadn't been stingy on those things he wouldn't have gotten caught.
- dazc 6y agoMaybe this is happening already and we don't know because some other oligarch is not being stingy? Welcome to London.
- vmception 6y agoof course it is happening people think “money laundering” is hard or impossible and will point to articles like this one as “see they got caught” it is completely unfalsifiable when the reality is that money is fungible and it is a complete waste of resources to try to enforce a whitelist it isn't necessary to have no evidence of the money, but that is also possible too but wasnt necessary here or in most areas of reintegration the whole economy has practically no separation from licit and illicit sources and they routinely traverse back and forth
- intricatedetail 6y agoThat's why central banks start working on crypto and China even plans to introduce money with expiry date.
- aspaceman 6y agoMoney laundering is my favorite curiosity. The amount of resources needed to keep control of something like that would be astronomical. Might happen eventually if governments move to centralized digital currencies though. I think it’s a crime that attracts folks of all kinds. It’s a good business, you don’t “hurt” anyone besides the government, very quiet, sex, money, etc. The bad shit is where the money comes from.
- extropy 6y agoOr the money was spent in buying the factory and what happens after is just extraction. Speculation being that investments in economy are perceived as a very good thing and the origin of the money is not checked that tightly.
- toast0 6y agoSo, if they're from a former soviet republic, we call they shady characters and the process money laundering; if they're from the US, we call them private capital and the process leveraged buyout.
- vmception 6y agoThat’s why they set up the British Virgin Islands private equity fund Because it is indistinguishable UK territories (or whatever you want to call them) don't have the geopolitical baggage that larger economic unions do, so they are good intermediaries with laws that are more relevant for business in the 21st century
- sfifs 6y agoI wonder how nations will react to such abuse going forward now that UK is no longer in EU. It should be pretty straightforward now for countries to outright ban any investment or cash flow from UK based entities. Nobody's now going to protect UK from such actions like EU membership could have. Of course the counter is these UK territories will be too useful for the corrupt politicians for them to want to ban.... Much like Switzerland.
- ipaddr 6y agoI don't understand why thr UK leaving the EU would matter. The UK's position in the world of global banking before and after the EU hasn't changed. Banning all UK entities would kill the global economy.
- PontifexMinimus 6y ago> I don't understand why the UK leaving the EU would matter. If a country pisses off the EU, for example by applying sanctions to one of its member states, the EU can reply "fine, we won't trade with you". This is a credible threat because the EU has a large share of the world economy. The UK could also threaten to not trade with a country, but this is a much smaller threat as the UK is a much smaller part of the world economy. In geopolitics, size matters: https://pontifex.substack.com/p/why-scotland-should-leave-the-uk https://pontifex.substack.com/p/why-scotland-should-leave-th...