Let’s say you’ve given up your law-abiding lifestyle to pursue a life of crime- you’ve
just made your first big score, perhaps from selling drugs, taking a bribe, or other corrupt
acts.
you can't just spend it or deposit it in your bank account without attracting
attention from authorities.
That pesky money trail might serve as evidence of
the crime you committed.
So you need to get that dirty money clean.
There are
three steps to any money laundering scheme.
First up,
placement, where funds are moved from direct association with the crime, then,
layering or disguising the money trail to foil any authorities, and finally,
integration, where the funds are once again available to spend without worry
of being caught.
So what are your options?
One option is forming a shell company.
It's fairly easy and there are plenty of law firms who can help.
It should take
them only a bit longer than signing up for a new email address.
Launderers may turn to historic tax havens like Switzerland, or places where
you can set up anonymous shell companies like the Cayman Islands or the U.S. states of Delaware
and Nevada.
Once a shell company is established,
make up some fake transactions for goods or services that you pay for with
your dirty money.
Suddenly that dirty money looks legitimate.
It also helps to
find people who work in banking who don't care if you're a shady
client.
After the fall of the Soviet Union launderers sought out weak spots
throughout Europe where oversight was poor.
Billions have been funneled through
banks in Cyprus, Malta and the Baltic nations of Estonia and Latvia
If you prefer to use the stock market you can try a technique called mirror
trading.
In this method you use your money to purchase shares.
And then you
sell shares worth the same amount somewhere abroad.
The trades functionally cancel each other out,
but you've successfully turned your
rubles into clean euros.
A similar method is a back-to-back deal, where, say,
a Russian takes out a loan in one country, say Austria, that's guaranteed by a deposit
of dirty money back home in Russia.
She then defaults on the loan, the bank in Austria seizes the Russian deposit, but she
still ends up with the proceeds of the loan, no strings attached.
Or maybe you like to visit
casinos.
Another method of money laundering is mixing dirty money in with
clean.
Cash businesses like restaurants and casinos are particularly attractive
to launderers.
A common scheme is to buy a bunch of casino chips, make a few small
wagers, then cash everything else out as winnings.
Or, you can just own the whole
casino.
Macau has been beset by laundering schemes despite China's
repeated attempts to stop it.
Or finally, there's smurfing- though you won't need
anything blue to get your green.
With this one you hire a bunch of associates
called Smurfs to individually deposit small chunks of the large haul you're
trying to cleanse, in different accounts, in different places.
Beware!
US banks are required to report any transaction over $10,000, so you
might need to find a lot of Smurfs.
So you can see there are lots of ways to
launder money.
Unfortunately for you, there’s no guarantee that you won’t get caught.