A money laundering menu

Money laundering basically means putting criminal money in and getting innocent-looking money out. It sounds complicated and is kind of intimidating when you work your way through government indictments. But from what I can see, it boils down to two basic tactics:

– Use conduits
– Obscure them

CONDUITS AND OBSCURING TACTICS – A MENU

CONDUITS:

– Pass-through “work” (speeches, consulting, patronage hires, “training” fees/expenses)
– Pass-through entities (charities, shell entities, sham or dummy companies)
– Credit cards (You are given a company credit card for “expenses” with excessive limits on type or amount of purchases)
– False invoices (A bill is created for more than the real amount, or for a false expense)
– False loans (Loan provided with secret agreement not to require repayment)
– Ghost employees (a spouse or family member is given no-show employment, collects a check)
– Political contributions (payments to political campaigns are agreed upon connected to an expected action)
– Assets (money is run through real estate or other high-value purchases)
– Gifts (travel, entertainment, jewelry, use of condominium)
– Lifestyle purchases (boats, cars, motorcycles)
– Expenses covered (such as paying someone’s rent)
– Gambling (money run through a casino; getting more difficult due to anti-money-laundering rules but still happens)

OBSCURING:

– Co-mingling funds (mixing money in an account from legitimate and illegitimate sources)
– Mismatched deposit and withdrawal amounts (for example, put $10,000 bribe into account, withdraw only $7100 and then $1200, making it less obvious)
– Structuring (banks scrutinize deposits over certain amounts; break the amount into small pieces in an attempt to avoid scrutiny. By the way, this doesn’t actually work very well but does add another criminal charge. Ask former House Speaker Dennis Hastert how it worked for him.)
– Business entity secrecy (hiding ownership or control of a business entity, often using a “secrecy haven,” a location that allows no reporting of owners or directors)
– Fraudulent transfer (such as transferring money or title to family members)
– Cash under the table (hard to track)
– Cryptocurrency (hard to locate and track)
– Extortion (instead of payment, “get something” on the person and agree to keep it secret as a protection agreement)
– Timing manipulations (arrange to pay after leaving office, arrange to hire after leaving office, pay and then get quid pro quo at later date, reverse consequences — you take the fall for me but afterwards, judge exonerates you or you get a pardon)
– False bids (bid-rigging or bids with hidden agreement to alter cost afterward)
– False or misleading documents
– False valuation of asset (assets are purchased under market value, resold for much higher amount)
– “Embezzlement” (secretly paid funds, if discovered, accounted for by claiming they were embezzled)

LAUNDERING THE RULES: Arrange ahead of time to work around or change the rules so that if caught you can show it was “perfectly legal.”
Why learn this stuff? This is a foundational piece. In other words, I have a lot of material to publish, and will be anchoring new reports to this over and over.

I wish I had known more about money laundering while investigating the elections industry, because in hindsight, strange things I saw were clear indicators of money laundering. But since I didn’t understand the mechanisms involved in laundering bribes, kickbacks, and illicit payments, I always ended up thinking, “Well THAT’s weird.”

I think it will help us, as independent citizens, to stop depending on shallow news reporting, seek our own information and alternative reporting, and to think of questions and seek answers ourselves. We need to learn to recognize underlying structures for bad government to come up with antidotes that work.

If we want better government, we need to step up our game.

 

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