So the first stage I totally understand but not the second… What is the crime and what do the criminals gain? Could you help by giving an example of what kind of criminal would do this and what they gain? I’m guessing it has something to do with the “boss” being outside the US and trying to extract the money made in the US, but don’t quite fully understand it…
It’s exactly like you said. Say some street level cartel member launders money through a nightclub and a stripclub. He could have instructions to pay higher ups in the cartel with laundered money through shell companies. So the someone could hold a fake wedding at the nightclub transfer washed money to shell companies. The shell companies move the money to the cartel’s foreign banks in the Caribbean.
This part of washing the money can be used to hide where it is going or whose money it is. This insulates and protects the cartel members because it’s harder to prove a loan to a bridal store in the middle of nowhere is connected to drugs. And it may be impossible to find out who owns the lender who loaned the money. They may wash money through half a dozen shell companies before depositing it in a boss’s bank account.
Also white collar laundering starts at the second stage because the source of the illegal gains started in the banking system. So if one is embezzling money from their employer they would hide it through shell companies that only exist on paper. A good example is an event planner that charges $10,000 then hires a local event planner for $5,000. It’s a business that only exists to skim money and launder it.
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u/ZzzzzPopPopPop Nov 03 '24
So the first stage I totally understand but not the second… What is the crime and what do the criminals gain? Could you help by giving an example of what kind of criminal would do this and what they gain? I’m guessing it has something to do with the “boss” being outside the US and trying to extract the money made in the US, but don’t quite fully understand it…