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Cash and Money Laundering – A Primer
This page should be no way be construed in ANY WAY as
|The international narcotic trade launders a minimum of $200 billion a year. Law enforcement efforts in the best of years recovers amounts in the range of $100 million to $500 million. In most cases, law enforcement investigations start with an identified crime and follow the money trail.|
Do the math. That’s .25%, in their BEST year. Think of the trillions of transactions which are conducted each day. It is for this reason that I believe FINTRAC operates mainly in an administrative (recording) and advisory role to law enforcement. If LE initiates an investigation in to your finances for whatever reason, FINTRAC is there with all of the records and the expertise to try and figure out what’s going on. But short of this, I think the odds are in your favor. This is only hypothesis on my part, but even a government has finite resources.
|While Canada has seized record amounts of currency in recent years, actual forfeitures are negligible by comparison (to the US) because Canadian law requires proof of a direct link between seized property or currency and specific drug transactions.|
This is a very good thing for Canadians and I don’t think Americans are as fortunate. However this isn’t to say that if you have property or expensive toys which you can’t account for (i.e. you’re living demonstrably beyond your means), that they can’t take them. Note: I’m not sure about the law in this area, any lawyers feel free to chip-in and explain it.
This is why I keep saying not to spend the money until you’ve shut down the grow op. After you’ve done so, the chances of them being able to link your money to drugs dwindle to almost nothing in most cases.
So what if you need to deposit some money in the bank and you’re not ready to shut down your grow op?
The short answer is to keep the amounts small. Keep cash deposits under 3k, and by that I don’t mean $2999. Deposit the money to ATMs. For all the bank knows, maybe it’s the money from your piggy bank. It doesn’t really matter and most bank employees will not care. Although FINTRAC has published a lengthy set of guidelines for people to follow, the reality is that most bank tellers probably haven’t even read them. I have a friend who works as a teller and she said that the only time she files a report is when it pops-up on her screen automatically because we’re talking about amounts over 10k. Here is a link to the FINTRAC guidelines if anyone wants to read them. I highly recommend it.
The best strategy for the regular guy who doesn’t own a bar, restaurant or other cash business to launder his money, is to make deposits in to several accounts with DIFFERENT banks. Do not under any circumstances open several accounts at the same bank for the purposes of laundering money. When the bank employee takes your deposit, she can see the accounts held at other branches. If someone notices that you’re depositing 2.5k into accounts at 3-4 different branches in the same day, it could possibly set off the alarms. I would also think that there exists a chance that bank software checks for such things. This means that if you go to several branches of a bank and deposit amounts just under the reporting limit, the software might alert someone. If this type of software did exist, using an ATM to make your deposits wouldn’t make any difference in this regard. On the same note, I would avoid deviating too far from previous patterns in your account/transaction history. Believe me, this type of software would not be hard to code and they already have their software set up to detect the 10k reporting threshold (the report is done automatically). It would seem probable to me that these sorts of counter-measures are already in place. This is why you should use as many different banks as possible. Open new accounts with new banks, and deposit the money in a place where you don’t have a transaction history. This way you won’t ever be deviating from previously established patterns. By the way, once the deposit is made, it’s just a number. It doesn’t say whether it was cash, cheque, money order, etc.
I would avoid making your cash deposits to your regular account or making the deposits in person, especially if they are to be performed with a(òüÕrequency. You don’t want some do-gooder teller remembering that you deposit 2.5k in cash week after week, because there exists the possibility that he/she will eventually catch on and report you to FINTRAC, the authorities, or both.
Our main objective so far has been getting the money in to the banking system without drawing attention to it. You can now spend the money a bit at a time and chances are nobody will notice. Unfortunately, you still can’t buy a house or really expensive car with it, especially if you intend stay in Canada or the US. The fact is, you still can’t show how you got the money if you ever come under scrutiny. You still need to get it out of the country and then hide its origin and then make it look like a legitimate source of income. People may still have their doubts, but as long as they can’t prove anything, that’s all that matters.
If we are talking about significant amounts of cash, it might not be a bad idea to incorporate a company (there are many ways you can do this, I’d recommend talking to a corporate lawyer) so that this cash, with no verifiable origin, isn’t running through accounts in your name. If you really want to obscure the origin of the money, you’re gonna have to go see some lawyers in any one of the numerous off-shore centers of the world. They can tell you about IBCs (international business corporations) and trusts and a number of other ways to distance yourself from the money. If you were depositing money to an account held by a Panamanian IBC for example, it would be very hard to prove that òŸk9were the beneficiary (it’s protected by banking secrecy laws in most tax havens). Theoretically this company or a subsidiary of it could buy you a car and a home. Note that you would still have to be careful in how you approach the situation so as not to set off alarms with the real estate broker; yes they have to report suspicious transactions to the government as well… There are lots of ways to get creative here. The key point is NOT TO TELL anybody about your offshore interests or anything at all about your finances.
Oh and as a side note.. Canadian and American accountants can not be trusted with this sort of information. THEY WILL FUCK YOU. There is no client privilege with accountants. They are under instruction from the government to report suspicious transactions and activity. Accountants are an anal, self-righteous bunch. Don’t trust them. The only reason I would keep an accountant in Canada would be to do my taxes on my declared income. Even then, I’d rather do my own. The less he knows the better.
Another note: and our Gestapo governments are also trying to find ways of getting around attorney-client privilege so that lawyers can’t help their clients with sort of thing behind the shield of attorney-client privilege. If these laws are ever passed, they would be obliged to report suspicious financial activity, just as accountants are. This isn’t law yet, and hopefully it never will be, but once I’m up and running, I’ll be dealing exclusively with professionals in foreign countries.
Let me briefly explain the reasons for using tax havens such as panama. Because of their secrecy laws, and the fact that the beneficiaries of entities such as IBCs and trusts can be hidden from public record, it is nearly impossible for another government to tie you to the money or prove that the origins weren’t legitimate. Unless the investigating government can PROVE a predicate offense, these tax havens will not share information about you. This is why it’s best to set a goal, reach it, and then STOP all illegal activity before the government nails you on something they can use as a predicate. You can then take a trip to panama or wherever, meet some lawyers, and figure out how you’re gonna set yourself up to deposit that money in to accounts belonging to some company you don’t own. You need to actually go down there and meet people. There are many scams involving offshore banking and legal services. Go down there, ask around about reputations and schedule a consultation.
If you continue living in Canada or the US, you can structure your offshore interests to provide you with an income that you can spend in your country of residence. An accounting professor once told me “that the best way to launder money was to pay taxes on it.” This is very true. Greed continues to be at the top of the list of why people get caught for a wide variety of crimes.
I’m sure I’m forgetting stuff, but this is enough typing for tonight. This should be more than enough to get you started. I’ll say it again, keep your mouth shut about your finances (don’t tell anyone at all) and read the FINTRAC document I linked to above. Use the ATM and don’t let the FINTRAC document make you too paranoid. Most bank employees just don’t care enough. My friend said that nobody ever reported anything except for the reports that are triggered automatically by $10k+ transactions. And if you’re dealing with lots of dollars, take a trip to a tax haven and consult with some lawyers there. The fees to setup the corporate structure would probably cost you anywhere from 2-5k US, depending on what you go with. Once you get this sort of thing up and running, keep individual transactions under the 10k mark and try not to make the payments for always the same amounts. Change things up. Sometimes do small transfers, not always big ones just under the limit. Patterns are your enemy. Make the deposits to different companies at different times and for different amounts. Don’t be impetuous because you want to spend your money ASAP, it will only lead to trouble. Oh and don’t keep the minutes of the company or anything else that directly associates you with it in your house.
Hope this helps.
Again, I wanna stress that I wasn’t offering legal advice. I’ve done a lot of research on the subject and talked to various people and I figured I’d share.
I didn’t mean any offense to the accountants out there reading this forum 😛 But you have to admit, there are a lot of do-gooder anal accountants in the world. Some of them would probably feel compelled to rat you out if they thought you were doing something illegal like laundering drug money. Correct me if I’m wrong, but doesn’t the IRS pay a 10% cut for information that helps them nail someone that’s evading taxes? And taxes are one thing, laundering money from the proceeds of growing weed is another 😛 I think i’d rather be safe than sorry.
Like I said before, if you were ever to come under scrutiny and someone took a good look at your finances and saw several bank accounts with tons of transactions just under the reporting limits, you’d probably run in to some trouble. With small amounts only once in a while I wouldn’t worry too much about it. But if we’re talking relatively large sums, I would think hard about setting up a business to run the transactions through. Don’t just incorporate an american/canadian company though, cause that provides no protection unless it really is completely legit and can stand up to scrutiny like sick little monkey explains. Even then, why not do this within the structure of an offshore corp? They can do business in the US/can just like any other business. Again, your just can’t tell anyone that it’s YOUR business or you completely defeat the purpose of the whole exercise.
You’re going to want to talk to someone about IBCs, etc. If you go down to Panama or wherever, you can arrange it so that your name is listed nowhere on a public document. Your lawyers can arrange to have other people listed as the president of the company, etc. Shareholders are private info. The US/can gov can try to get that info, but unless they can prove a predicate offense (and tax evasion doesn’t count), they’re not going to get it. There are many more benefits that I’m not even going in to.
Since my first post was kind a long, I’m going to stress again why actually going down there is a good idea. There are many scams related to the offshore world. Unless you go down and meet someone face to face in their offices, there’s really no way of knowing who you’re dealing with. These guys are very cunning and you have to be careful. There’s no substitute for going down there and meeting people.
And lastly, in response
|that’s all well and good if you want to leave the country, but what if you don’t want to leave and as a small-medium fish you just want to hide the cash for the future. what about having a company made and having them send u cheques to be your personal salary? you could get them printed as a real pay cheque|
You’re right, you could. And depending on your profession, you could probably make it look very legit as well. Especially if you provide some kind of service. "Why Mr. IRS man, I earned this money by designing web pages and I paid my taxes on them. What’s the problem?" I’m getting creative here, but you could probably say you were contracted by the company and were under NDA as to what you did for it. Don’t know how well it would hold up but it’s just something off the top of my head 😛 If you’re doing this with IBCs and using different jurisdictions to your advantage, I would think it’d be VERY difficult for anyone to prove anything. Pay your taxes, don’t do anything that draws too much attention to yourself, and chances are you can enjoy spending as much as you want 😛 Personally I’d only pay myself what I wanted to spend. I’d leave the rest offshore in a company other than the one I originally put the money through (where you can invest it w/o paying any extra tax on it). If you incorp. 2 companies, you could have them do business together and the one that pays your cheque could stay completely clean. Even if the other came under investigation. Very little would result. There are a million ways to do it. Successful prosecutions are extremely rare. I wish I could find the numbers again. You’d cry if you knew how much our governments spent LOSING money laundering cases.
Again my post was just intended as a primer to help get people on the right track.
Nothing I say is a substitute for professional advice. Excuse the English and sentence
structure tonight. I’ve been up for a long time =/
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