[Guide] Money Laundering

[Ketamine Kowboy]

 

 

Money laundering

 

“Money laundering The concealment of the origins of illegally obtained money, typically utilising transfers involving foreign banks or legitimate businesses.”

 

To understand how money laundering works, everyone must understand why people feel the need to launder it and what it is. So I will take this time to explain it and get everyone onto the same page. The main reason for money laundering is to conceal and legitimise the origin of money that comes from crime or other activities people wish to hide. There is also money laundering for the sake of tax-evasion. Any large scale criminal organisation is heavily dependant on someone to launder their money to avoid being looked into by authorities, and these money launderers are often one of the most critical pieces in a criminal organisation. Laundering money also allows what would otherwise be illicit money to be spent freely on the regular market, to buy properties, stocks, cars, or just other general assets, without people turning their heads.

 

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Modern money laundering is often placed into three stages, placement, layering, and integration. All stages are essential for hiding the assets exact origin or making them untraceable. If they can’t prove that the money originates from crime forfeiting these assets becomes much harder.

 

Placement is when you move the cash from its source. The source be it a criminal activity or bribes needs to be disguised. This is followed by placing the money back into circulation through shops, casinos, financial institutions or other businesses. These businesses can be local or abroad.

 

Smuggling currency is much like it sounds the act of moving the money and or monetary instruments in physical form out of the country into a different one, where it can be deposited normally. This smuggling uses many different methods of transportation; many people pack the cash or monetary instruments into a bag and fly to the country where it is to be deposited.

 

Bank complicity is when a financial institution is corrupt and often controlled or owned by drug-traffickers or other criminal organisations. Having a bank that allows you to deposit large amounts of money into accounts, no questions asked makes it very easy for criminals to launder the money that way. It often goes hand in hand with smuggling currency, as an example trafficker in the states transports money he’s acquired through trafficking to his friends’ bank in Cuba, where it is placed into an account no questions asked.

 

Securities Broker can simplify the process of laundering money. They do this through structuring large deposits of funds in ways that disguise the original source of the funds, and these can be deposits and or investments in stocks, bonds or just general shell corporations.

 

Fund blending builds on the fact that the best way to hide cash is with a lot of other cash, some financial institutions may be unknowing vehicles for this money laundering. This is most often done by investing in a legal front a casino, restaurant, barbershop, and so on. These legal fronts allow legal deposits to mask the illegal ones. This is one of the most, if not the most common method.

 

Purchasing assets another good way to launder money is through asset purchases, and it is a classic method. It has the purpose of changing a conspicuous lump-sum into a less noticeable and equally valuable item. These items are often expensive paintings and things of that nature.

 

 

Layering is when you add more layers to the laundering scheme to make it more complicated and a lot harder to trace and track. Its sole purpose is to make the job harder for authorities to uncover the exact origin of the money.

 

Converting to monetary instruments is a common way to follow up your “placement” activities within an infiltrated financial system. The proceeds often get turned into monetary instruments such as banker’s drafts and money orders.

 

Purchasing and selling material assets that are bought with illicit funds can be resold locally or abroad to make the assets much more difficult to trace and eventually seize.

 

 

Integration is the final step and where the movement of the previously laundered money begins. This is where the money has been metaphorical “cleaned” and can be integrated into the conventional banking system and used as regular liquid assets.

 

Dealing in properties is a common way to return this money into the regular economy as legitimate money. Many criminal groups use their shell corporations to purchase properties, making the sale appear to have everything in order, and the money is then seen as legitimate.

 

False loans from front companies is another common way that money is turned legit. These criminals set up a front company in a country that has corporate secrecy laws. After that, they use these companies to “lend” themselves money; these are transactions that look legitimate and require in-depth investigation to uncover properly.

 

Foreign banks are very commonly used, with many criminals holding “Off-shore” accounts containing massive amounts of money. It is a very sophisticated method to store laundered cash as it is complicated for foreign and even local police to investigate these banks. This is thanks to loose banking laws and regulations in many countries.

 

False import/export invoices is a method that has proven to be an extremely effective way of integrating these illicit funds into the regular economy. It involves overvaluing certain entry documents and or the value of funds acquired from exporting. This money is then deposited into domestic banks.

 

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Common fronts used for money laundering

Restaurants/Bars or other business of the sort are very commonplace when it comes to money laundering. This is because it is easy to claim you’ve made massive amounts of these sorts of businesses, it is also difficult to track exact quantities sold. Foodservice businesses are some of the most popular ways to launder money through legal fronts and are very common; they can range from a local kebab shop or bar, up to a high-class exclusive restaurant. There is no set limit for what price range your food items are in, but it does depend on which amounts of money you plan to launder. As an example, money laundering and tax evasion were commonplace in Pizzerias in Sweden during the late 80s and early 90s. Many of them made massive amounts a month that was just frankly unrealistic for the number of customers Ekobrottsmyndigheten (Swedish department for Economic related crime) saw enter the stores. Their way of counteracting this was to count pizza boxes used. If they had made 2 million annually but only used 200 pizza boxes it was an immediate red flag. The same method was used for tax evasion if they had sold 250 pizzas on paper but used 1000 pizza boxes it became evident that they just hadn’t documented 3/4ths of their sales.

 

Casinos are and have been a very common way to launder money, it was brought to a massive scale thanks to the Chicago Outfit and other parts of the American Mafia. They invested enormous amounts of money into casino projects in Las Vegas and is a large part of the reason that Las Vegas is where it is now. The way to launder money through Casinos is secure, and they are also useful as a business in general with the house always being the one who wins it is a very lucrative business. With the massive amounts of people, large Casino’s pull in, it is not hard to see why it is hard to spot an illegitimate one from a legitimate one. Amongst Casino’s, I will also count gambling dens and horse tracks as well, all of these build on the same premiss; a small bet can turn into massive profit if handled correctly, be that how you play your cards, what the slot machine shows, or what horse runs the fastest. Legitimate horse tracks can also be used to launder money. Someone’s won let’s say $1000; you can buy the ticket from them for $1100, they’ll most likely say yes. This $1100 of dirty money is now $1000 of clean money since you can just show the proof of winning and have it directly deposited into your account.

 

Massage parlours are another very popular way to not only launder money but also to work as a front for a whorehouse. For the whorehouse aspect of it is somewhat common for them to offer “happy endings” by the end of a massage or something of the sort, which implies you pay a bit extra and the masseuse provides the client with sexual gratification. The thing that makes massage parlours such an excellent way to launder money is how hard it is to prove one is illegitimate. There’s no need for them to give out any item alongside the massages like you’d need a pizza box to carry a takeaway pizza. Massage parlours are purely a payment for a service, which in this case happens to be a massage.

 

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Electronic money laundering

 

If you think about it, logically sending money via electronic services should be just as easy of a method to transfer money without revealing your identity as untracked and none sequential banknotes. However, It is not the case, with so much of your data being stored in massive records the capabilities of Internet service providers and network resource maintainers, in general, prevent that. With the rise of cryptocurrencies and their development, many of these set the aim to allow completely anonymous transactions between individuals, the degree they succeed in and consequentially the many benefits they offer to money laundering has, is controversial. Zcash and Monero are good examples of what cryptocurrencies can do in-terms of anonymous and unlinkable transactions. There have been e-currencies such as “Liberty Reverse” where people could purchase these coins for American dollars, and then send them anonymously, these coins could later be converted back into USD for a small fee. Liberty Reverse was shut down by US authorities in early 2013, and its founders and other associates were charged with money laundering. A strange way of money laundering has recently started rising via the internet; this one uses MMO’s such as Second Life and World of Warcraft. Games where you can buy virtual goods, services, or virtual cash which you can at a later date convert back into money. Australia is one of the countries that have set up a plan to strengthen the anti-money laundering laws. These new strengthened laws are meant to prevent currencies such as Bitcoins being used to profit crime and general corruption. These laws started being planned after several cases of criminals cashing out massive amounts of Bitcoin after ransomware attacks, drug dealing, and cyber fraud.

 

If you have any critique, don’t be afraid to post it down below, or message me privately about it.

Edited March 3, 2020 by Lmao

[KHAN.]

Cool guide. I remember a while ago it was mentioned that some sort of IRS faction would be introduced in order to track peoples wealth so that laundering money becomes necessary. At the moment people simply have to be trusted on their word that their money is laundered, but then there’s the issue of PG. You lose some of your cash when you clean it, but I’ve never seen someone actually /transfer LSGOV. If your money appears legit then it should be taxed otherwise it’s too easy for a criminal to just share screens of a couple /mes and expect a get out of jail free card. 
 

Any ideas on how to solve that issue?

[Ketamine Kowboy]

12 minutes ago, tebbutt1 said:

Cool guide. I remember a while ago it was mentioned that some sort of IRS faction would be introduced in order to track peoples wealth so that laundering money becomes necessary. At the moment people simply have to be trusted on their word that their money is laundered, but then there’s the issue of PG. You lose some of your cash when you clean it, but I’ve never seen someone actually /transfer LSGOV. If your money appears legit then it should be taxed otherwise it’s too easy for a criminal to just share screens of a couple /mes and expect a get out of jail free card. 
 

Any ideas on how to solve that issue?

I think honestly that assets and money as a whole is an issue, not exclusive to criminals, people RP their assets as 1:1. The biggest issue right now is that you can deposit massive amounts of money into the bank without any acutal RP behind it. The best way to solve it would be to introduced a bank that isn't script based with actual employees, this would also open the door for bank corruption and financial crimes in general. Not counting money held in cash as assets would also be good, that way people could tax evade, and so on.

Edited February 6, 2020 by Lmao

[Valadez]

44 minutes ago, Lmao said:

I think honestly that assets and money as a whole is an issue, not exclusive to criminals, people RP their assets as 1:1. The biggest issue right now is that you can deposit massive amounts of money into the bank without any acutal RP behind it. The best way to solve it would be to introduced a bank that isn't script based with actual employees, this would also open the door for bank corruption and financial crimes in general. Not counting money held in cash as assets would also be good, that way people could tax evade, and so on.

Have a system like the stores have, if a bank is open then make it so people can only use that 1 bank to deposit.

[Daylong]

good job, also, don't think many people realize how crucial it is to launder your money or at least don't showcase the process, thinking it's not that important, while in reality, it provides lots of good rp scenarios, and how, for example, only one shop or business in general might not be able to launder x amount of cash in the time that the character would like

[Ketamine Kowboy]

Updated guide with information regarding e-currency and its ways of being laundered.

[Ketamine Kowboy]

Added a short explanation for commonly used legal fronts.

[VULn3R]

On 2/6/2020 at 7:16 AM, Lmao said:

I think honestly that assets and money as a whole is an issue, not exclusive to criminals, people RP their assets as 1:1. The biggest issue right now is that you can deposit massive amounts of money into the bank without any acutal RP behind it. The best way to solve it would be to introduced a bank that isn't script based with actual employees, this would also open the door for bank corruption and financial crimes in general. Not counting money held in cash as assets would also be good, that way people could tax evade, and so on.

That would require a large number of people willing to do the (maybe) boring work. A better way would be to have a forum-based banking system where, when you need to deposit a large amount of cash, need to go through an application-based procedure. And to prevent players from abusing the system by doing many short-amount transactions, the maximum amount you can deposit at once should be made $10,000 and each time you make a transaction, 5% of the total amount should be deducted, and after every transaction, there should be a wait time for at least 5 minutes before you can make another.

And I don't know why people oppose this, but all the money a person has on him should be made robbable. This will force players to store their money in banks and properties instead of carrying them around in town with no fear.

[Ketamine Kowboy]

41 minutes ago, VULn3R said:

That would require a large number of people willing to do the (maybe) boring work. A better way would be to have a forum-based banking system where, when you need to deposit a large amount of cash, need to go through an application-based procedure. And to prevent players from abusing the system by doing many short-amount transactions, the maximum amount you can deposit at once should be made $10,000 and each time you make a transaction, 5% of the total amount should be deducted, and after every transaction, there should be a wait time for at least 5 minutes before you can make another.

And I don't know why people oppose this, but all the money a person has on him should be made robbable. This will force players to store their money in banks and properties instead of carrying them around in town with no fear.

I agree with you totally on this one, even though a proper banking system might be boring it is essential to portray accurate roleplay