How Money is Laundered – Two

In the first article; http://socyberty.com/crime/how-money-is-laundered/ I described the creation of ‘Near Banks’ in Third World nations as a way to ‘wash’  money obtained by illegal means.  This method has provoked the interest of many international agencies who have launched intensive investigations.  Many of these ‘Near Banks’, that is a company which handles a great deal of money, be it an investment scheme, remittance service, or other such entity, have been ‘closed’ because although the paper trail seems legitimate, there are ways to uncover the ‘root’ of the evil.

The more difficult money laundering schemes to unravel often contain products for sale.  These products do not really exist, though there are samples, and the documents which prove the buying and selling of them are well doctored.

To give an example I will use an imaginery energy drink I’ll call Snot. 

Snot was created by someone and the formula purchased by the Money Laundering Franchise. (MLF).  This group has millions of dollars of dirty money, so buying the formula is not a problem.  Having some company actually create and package about one thousand units of Snot is not a problem.

Snot is advertised, and ’sold’ to various ‘distributors’.  Outsiders will not get more than a sample, because there is no product to ’sell’.  Imaginery deliveries are made to the distributors who sell the imaginery product to various small businesses which don’t exist. 

Yes, maybe five tins of Snot are on the shelves of thirty different shops, but five hundred tins have not been sold, though it appears on paper.

Those who appear to buy five hundred tins of Snot every week are part of the MLF.  They may be low level foot soldiers, they may actually run rum bars or small shops as their personal front, and since Snot is not particularly tasty or is the name particularly enticing, the original one thousand products can last a very very long time.

The MLF claims to have sold X number of tins, is paying taxes on this money, may even claim to have Y number of ‘employees’ whose salaries they pay, as well as factory space, transportation, etc.

Everyone in the MLF collects bags of money for ‘legitimate’ jobs, so that it is not strange for a truck driver who charges $X to transport bottled water from Point A to Point B spending that $X having ‘transported’ Snot from Point A to Point B.  The fact he never transported a single tin of Snot is not inquired into. 

Unless by some lucky quirk someone accidentally uncovers that there is no such product, and that all the ‘jobs’ connected to the Snot company are bogus, these companies exist under the radar for years.  The money gained via sales of Snot is absolutely clean and can be used to purchase real estate, other businesses, put into banks in other countries, etc. 

Few people are aware that they saw an ad for Snot six months ago, but never saw the product, or that the only place they ever saw a tin of Snot was on the shelf at some seedy little rum bar in inner ghetto.

With all the hundreds of thousands of products available, no one is paying any particular attention, and as the company is following all the legal rules, there is no reason to think about it.

Wise members of the MLF will move out of the Snot trade as soon as they have enough of their dirty money washed to do something else.

If by a miracle the authorities are alerted to the non-existence of Snot by the time they move the MLF is in another country doing the same thing.