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The point is generally to recover cents on the dollar from money you can't otherwise use. Imagine you have a network of people moving illegal drugs. They coll

The point is generally to recover cents on the dollar from money you can't otherwise use. Imagine you have a network of people moving illegal drugs. They collect money from their customers, and they need to pay it to you, the supplier. Arrange for them to eat a lot of food at your restaurant. Maybe they shout their friends. The money goes into the restaurant, and is mingled with other money. That money is used to pay costs for the business, but some of it is still profit. That profit, while less than the illegal input money, is _clean_ money, which is much more valuable because you can spend it without fear generally. It's really just about making it harder for law enforcement folks to draw associations by looking directly at the bank accounts of several people they suspect are in cahoots. Or, in some cases, about making it harder to trace specific cash serial numbers or other instruments like cheques. I recall reading of a crime outfit in Australia that would have the elders in their family take their illicit cash and use it to place an endless stream of bets on poker machines. By law they're required to return some high percentage, say, 75%, of the money put into them (the house keeps the rest). If you gamble tens of thousands in those machines, and you don't care about the losses, you get a reasonable expectation value back out as laundered winnings. In that case you don't even have to own the pub with the pokies, that's just how they work.

thaumasiotes 2y ago
> If you gamble tens of thousands in those machines, and you don't care about the losses, you get a reasonable expectation value back out as laundered winnings. Where does the laundering come into it? If the machine pays out in cash and you just walk away with it, you've gone from having a big pile of dirty money to having a slightly smaller pile of dirty money. You could declare that the smaller pile is all gambling winnings (off of a low base), but as soon as that gets audited you have to refer the auditor to the casino's security cameras and there you are spending a lot more than you got back. You could ask the casino to make a formal declaration that your smaller pile of money is gambling winnings (maybe it's chips!), but why should they lie for you? And if it is chips, you had to buy chips originally. How do you explain how you afforded those chips? What's the part of this scheme that works?
- jajko 2y ago
  You are overthinking all this. This is not Al Capone investigation, tax offices are understaffed and petty negligence or even crime happens with tax returns very frequently. You think taxmen are going to investigate endless hours of video feed from some casino via court order for some 10k win claimed in taxes? Not sure if casinos even keep all video feeds for say 3 years since it takes time to actually file and process those tax returns. If you are not big enough fish or have some bad luck, you can slip through quite easily. The key is to keep it down money wise, spread it across many places and random dates. You can't do big sums alone, hence the grandpas in parent comment. Basically, small crime these days, at least in Europe, is not punished unless you literally steal from police personnel. And if you do it well you can hide bigger crime in sea of small crime. Maybe AI could help with some of that, but I see often lack of any interest by police to even care that ie your 700 euro phone was stolen, even if you still know its exact location in specific house. No AI is ever fixing that.
  - aqme28 2y ago
    Hell, even someone like Dan Bilzerian basically openly laundered tens of millions via “private poker games” and he’s never going to be charged for it.
  - tecleandor 2y ago
    Yep. A classic movement (at least on Spain) is buying winning lottery tickets. You locate people that have winning tickets and offer them certain percent of money over the prize value. For example, if it's a 10K prize, you offer 12 or 13K. The ticket owner gets dirty money and avoids paying taxes on the prize (so they get 40 or 50% more than they would have got with the ticket). The other side gets clean money. When dirty politicians get audited they find how "lucky" they are, having won lottery tens of times in a couple years or three. What an statistic oddity, huh? ;) https://english.elpais.com/elpais/2015/12/21/inenglish/1450696709_420289.html https://english.elpais.com/elpais/2015/12/21/inenglish/14506...
  - thaumasiotes 2y ago
    You can say whatever you want if you assume you can't be audited. In that case there's no reason to play the slots at all. Your money will stay just as dirty in either case, but you'll have 30% more of it. The problem I see with the casino "strategy" is that, as soon as you are audited, your story immediately falls apart. That's a terrible cover. Who needs a defense that can never be penetrated as long as it's never attacked? The idea of laundering is to say something that's difficult to disprove. > You think taxmen are going to investigate endless hours of video feed from some casino via court order for some 10k win claimed in taxes? If you have a thousand of them, yes. If you have one, it was a waste of your time and your money to pretend to launder it through slot machines.
einpoklum 2y ago
Requiring your henchmen to eat a lot of Kebab all the time is not at all a scalable money laundering scheme. It's also self-defeating since they will become fat and sickly from too much Kebab :-(
- hinkley 2y ago
  The more common thing that comes up in hypothetical conversations of the sort “you acquire $5M through less than legal means. How can you spend it?” is owning a bar. Buying the liquor gets a bit fuzzy as to where the money comes from. But the bigger thing is you can have imaginary customers and either drink “their” alcohol, pour it down the drain, or use it for gifts and bribes, all while booking receipts for people who never came into the bar at all. It’s not that the henchmen spend every ill gotten dollar in the restaurant, it’s that the restaurant looks busy enough for that level of revenue to look even remotely plausible.
  - pelagicAustral 2y ago
    While on holiday in South America, I visited a friend and we went out for drinks quite a few times, we visited different neighborhoods and at times I was really puzzled as to why this very "new" looking, gigantic, fully staffed bars were often completely empty, he clarified that those were likely laundering drug money.
    - hinkley 2y ago
      Well, let it never be said that South and Central American cartels aren’t ballsy af.
InDubioProRubio 2y ago
The house is also part of the crime? As in, loosing is part of the money transfer plan?
hinkley 2y ago
A bunch of computer games have had very restrictive rules about getting money back out of the game that other people have put in. Because if you overprice something in a video game someone might buy it anyway. Because who’s to say the price didn’t spike high for some real world or in game event (like a holiday, a new challenge opening, or a voice actor died and everyone wants to dress like their characters). If you can turn the in game currency back and forth to hard currency, then you can sell a $5 item for $500 and walk away with 90-99% of the value (depending if the company charges a transfer fee).
- mrguyorama 2y ago
  <cough> Counterstrike skins and gambling websites <cough> Except the joke there is, you never even have to pay out! Gift cards to various tradeable "assets" are a reliable way to launder money, or more directly, launder stolen credit card details into usable money.
aqme28 2y ago
You don’t need them to eat kebab. Just put on your books that you sold a lot of kebab. Do it in cash. Buy some meat and throw it out if you want, and you’re fine.
- hooli_gan 2y ago
  Yeah that's how it's done. The other comments are overcomplicating it.
- red-iron-pine 2y ago
  they only throw out the meat on the books: mark it as unsellable and deduct it as shrink. in reality it just goes home w/ the business owner and/or his people -- sometimes the same day as it's bought. drop off a couple kilos of unsold doner kabab meat to his mom who is retired, hand some out to uncle, etc. it's hard to trace, and hard to ID -- just some random meat in an old lady's freezer, and may have already ended up in a stew or something -- and in theory should have been disposed of (in theory) anyway per health code regulations. pretty common technique in use, like, everywhere.

thaumasiotes 2y ago

> If you gamble tens of thousands in those machines, and you don't care about the losses, you get a reasonable expectation value back out as laundered winnings. Where does the laundering come into it? If the machine pays out in cash and you just walk away with it, you've gone from having a big pile of dirty money to having a slightly smaller pile of dirty money. You could declare that the smaller pile is all gambling winnings (off of a low base), but as soon as that gets audited you have to refer the auditor to the casino's security cameras and there you are spending a lot more than you got back. You could ask the casino to make a formal declaration that your smaller pile of money is gambling winnings (maybe it's chips!), but why should they lie for you? And if it is chips, you had to buy chips originally. How do you explain how you afforded those chips? What's the part of this scheme that works?

jajko 2y ago
You are overthinking all this. This is not Al Capone investigation, tax offices are understaffed and petty negligence or even crime happens with tax returns very frequently. You think taxmen are going to investigate endless hours of video feed from some casino via court order for some 10k win claimed in taxes? Not sure if casinos even keep all video feeds for say 3 years since it takes time to actually file and process those tax returns. If you are not big enough fish or have some bad luck, you can slip through quite easily. The key is to keep it down money wise, spread it across many places and random dates. You can't do big sums alone, hence the grandpas in parent comment. Basically, small crime these days, at least in Europe, is not punished unless you literally steal from police personnel. And if you do it well you can hide bigger crime in sea of small crime. Maybe AI could help with some of that, but I see often lack of any interest by police to even care that ie your 700 euro phone was stolen, even if you still know its exact location in specific house. No AI is ever fixing that.
- aqme28 2y ago
  Hell, even someone like Dan Bilzerian basically openly laundered tens of millions via “private poker games” and he’s never going to be charged for it.
- tecleandor 2y ago
  Yep. A classic movement (at least on Spain) is buying winning lottery tickets. You locate people that have winning tickets and offer them certain percent of money over the prize value. For example, if it's a 10K prize, you offer 12 or 13K. The ticket owner gets dirty money and avoids paying taxes on the prize (so they get 40 or 50% more than they would have got with the ticket). The other side gets clean money. When dirty politicians get audited they find how "lucky" they are, having won lottery tens of times in a couple years or three. What an statistic oddity, huh? ;) https://english.elpais.com/elpais/2015/12/21/inenglish/1450696709_420289.html https://english.elpais.com/elpais/2015/12/21/inenglish/14506...
- thaumasiotes 2y ago
  You can say whatever you want if you assume you can't be audited. In that case there's no reason to play the slots at all. Your money will stay just as dirty in either case, but you'll have 30% more of it. The problem I see with the casino "strategy" is that, as soon as you are audited, your story immediately falls apart. That's a terrible cover. Who needs a defense that can never be penetrated as long as it's never attacked? The idea of laundering is to say something that's difficult to disprove. > You think taxmen are going to investigate endless hours of video feed from some casino via court order for some 10k win claimed in taxes? If you have a thousand of them, yes. If you have one, it was a waste of your time and your money to pretend to launder it through slot machines.

einpoklum 2y ago

Requiring your henchmen to eat a lot of Kebab all the time is not at all a scalable money laundering scheme. It's also self-defeating since they will become fat and sickly from too much Kebab :-(

hinkley 2y ago
The more common thing that comes up in hypothetical conversations of the sort “you acquire $5M through less than legal means. How can you spend it?” is owning a bar. Buying the liquor gets a bit fuzzy as to where the money comes from. But the bigger thing is you can have imaginary customers and either drink “their” alcohol, pour it down the drain, or use it for gifts and bribes, all while booking receipts for people who never came into the bar at all. It’s not that the henchmen spend every ill gotten dollar in the restaurant, it’s that the restaurant looks busy enough for that level of revenue to look even remotely plausible.
- pelagicAustral 2y ago
  While on holiday in South America, I visited a friend and we went out for drinks quite a few times, we visited different neighborhoods and at times I was really puzzled as to why this very "new" looking, gigantic, fully staffed bars were often completely empty, he clarified that those were likely laundering drug money.
  - hinkley 2y ago
    Well, let it never be said that South and Central American cartels aren’t ballsy af.

InDubioProRubio 2y ago

The house is also part of the crime? As in, loosing is part of the money transfer plan?

hinkley 2y ago

A bunch of computer games have had very restrictive rules about getting money back out of the game that other people have put in. Because if you overprice something in a video game someone might buy it anyway. Because who’s to say the price didn’t spike high for some real world or in game event (like a holiday, a new challenge opening, or a voice actor died and everyone wants to dress like their characters). If you can turn the in game currency back and forth to hard currency, then you can sell a $5 item for $500 and walk away with 90-99% of the value (depending if the company charges a transfer fee).

mrguyorama 2y ago
<cough> Counterstrike skins and gambling websites <cough> Except the joke there is, you never even have to pay out! Gift cards to various tradeable "assets" are a reliable way to launder money, or more directly, launder stolen credit card details into usable money.

aqme28 2y ago

You don’t need them to eat kebab. Just put on your books that you sold a lot of kebab. Do it in cash. Buy some meat and throw it out if you want, and you’re fine.

hooli_gan 2y ago
Yeah that's how it's done. The other comments are overcomplicating it.
red-iron-pine 2y ago
they only throw out the meat on the books: mark it as unsellable and deduct it as shrink. in reality it just goes home w/ the business owner and/or his people -- sometimes the same day as it's bought. drop off a couple kilos of unsold doner kabab meat to his mom who is retired, hand some out to uncle, etc. it's hard to trace, and hard to ID -- just some random meat in an old lady's freezer, and may have already ended up in a stew or something -- and in theory should have been disposed of (in theory) anyway per health code regulations. pretty common technique in use, like, everywhere.