Money Laundering 101

A brief look at the different methods that money is laundered

NOTE: Don't try this at home. Money laundering is illegal. I am only posting this to highlight how it is done and where to look to find it.

How To Launder Money

NOTE: Don't try this at home. Money laundering is illegal. I am only posting this to highlight how it is done and where to look to find it.

When it comes to money laundering there are 3 steps to doing it right.

1. Placement

Placement is when the money enters the financial system for the first time. Money may be deposited in a bank, added to the accounts of an existing business or disguised as a transaction. This is usually done as a series of small transactions, usually disguised as cash transactions.

2. Layering

You start mixing the illicit money with your legitimate money or placed in constant motion. So your dirty money gets mixed in with your clean money. And if you do it right, you are doing this through multiple accounts and numerous transactions so that it becomes impossible to tell what is the dirty money and what is the clean money.

3. Integration

Your money is ready to be reintroduced into the economy as legitimate money. It can be placed in large scale investments or to buy luxurious assets, properties, or a new business.

Different Money Laundering Schemes

All of this can be done through methods of money laundering.

1. The Casino Scheme

You go to the casino. You turn your cash into chips. You casually do some small time gambling. You cash out the rest of your chips and keep the receipt. If anyone asks, you had a good streak over several hours at the casino.

2. The Cash Business Scheme

Who watched the TV show Breaking Bad? You slowly integrate the cash as additional cash transactions on top of legitimate transactions. The easiest way to do this is through service based businesses. But product based businesses like book publishers can be used as well.

3. The Smurfing Scheme

Do you have any trusted family, friends, or business associates? You hand them the money to then make multiple legitimate deposits through incremental amounts. This is done to bypass the banking reporting requirements for suspicious banking practices. Small transactions pass by unnoticed.

4. The Foreign Investment Schemes

Give the money to a foreign investment partner who then turns around and invests it into your business, charity, or non-government organization. Depending on the type of investment made, the money may be untraceable.

How To Launder A Trillion Dollars

This may be easy if you are a government agency. But what about for people who don't work for the government? For the rest of us, this may not be such an easy task.

Step 1: Forget hiding it in a tax haven in the Caribbean. That's old school.

Step 2: Open a company in the UK and exploit the loopholes in doing so.

Step 3: Lie on the form you use to open said UK based company. They don't check the information.

Step 4: Don't just lie. Lie creatively.

Step 5: Open a bank account under that new UK based company name.

Step 6: Enjoy your yearly salary.

How To Launder Money Through Charities

If you are part of the elites, you could launder the money through a charitable foundation under your control. Place family and friends on the board of directors. Give them nice yearly incomes. Use the charity funds to purchase new houses, expensive luxuries, or other things you were going to buy for yourself.

Hint: Make sure you create a website for your non-profit so you don't get caught.