I know money from drugs, robberies, stolen goods, etc is “dirty” but, how does anyone know it’s dirty? Why can’t you just spend your money?
In: 316
you dont if ur not gonna spend it. But if you buy a million dollar house with cash but you claim a 50k a year income, the government is gonna have some questions.
People, particularly tax authorities, start to get suspicious when you somehow start spending many times the amount of money that you make.
Basically, if the money is dirty, it can’t really be used for large purchases because the mere fact that you possess that much unexplained cash would raise suspicion of you.
Taxes. You want to be able to stick it in the bank and use it without the government questioning it.
Sometimes it’s hard to do things in pure cash.
Luckily laundering money is relatively easy if you take time.
It’s a little difficult to go buy a $50k car or book a vacation to Hawaii with a stack of $100’s. And even drug dealers might want to get a mortgage on a house if they don’t have the funds to pay up front, which means having some sort of documented income.
Nevermind, it helps reduce risk of tax evasion charges…
Firstly you start with money that nobody knows about. However you can not really go down the high street to spend that money. People will know you have money and then you get the police or more importantly the IRS asking you about it. If you can not show that you have paid income tax on the money that is tax evasion and you end up in jail. If you go to the IRS first and try to pay your taxes before spending the money they demand to know where you got it, it could be others are dodging taxes. If you refuse to tell them you end up in jail.
So what you need in order to use all your hidden stash of money in order to buy stuff you want is a good story for how you got all that money so that you can pay your income tax and actually use it without getting caught. This is what money laundering is. It is taking money which can not be shown in the light of day and makes it clean so you can go flash it around without anyone being suspicious.
If you can’t explain where you got the money, you can’t spend it. This is the definition of “dirty” money. Everybody knows it’s dirty, because when they ask you where you got it you can’t say. It’s mostly a problem with the Government, who takes your lack of a good story as proof of a crime and sends you to jail.
For no one to know about it you need to either be a) extremely lonely or b) highly frugal or c) not use that money at all.
The moment you’re not a b or c… you, and it, will be noticed. You will attract attention, and then the jig’s up.
Which is why you need to launder money.
Now… if you’ve ended up with a suspicious amount of cash, don’t talk about it on the Internet anymore. Don’t even use a vpn cause they don’t work unless you know what you’re doing (99.9 percent don’t and don’t know about the 5 eyes 9 eyes 14 eyes etc etc)… and for the best explanation on what to do with it watch breaking bad and ozark. They give some nice clues on how to “legitimise” your paradise…
Because large amounts of cash is useless. I can’t buy a house with cash. I can’t hand my realtor $700,000 and say I want to buy this piece of property. I can’t buy any moderately expensive car with cash.
Having a pile of literal cash isn’t great when the only things you can buy with it are groceries and gas. Can’t buy real estate, or any expensive purchase really. It’s useless. You need to figure out how to ‘clean’ it so you can get it into a bank account.
“Dirty” actually means money that you acquired but haven’t paid taxes on … because you acquired that money illegally.
So you have to make it *look* like you acquired that money legally (and pay taxes on it), so that the remainder, after taxes, is “clean.” Criminals usually do this by falsifying the accounting at a business.
For example, let’s say you’re a criminal bringing in lots of cash. You need to put that cash in a bank account, but the government will gets suspicious if you’re generating a lot of cash that you haven’t paid taxes on.
So you find a business — usually one that does a lot of cash interactions, like a restaurant — and take over that business. You then *claim* more sales from the business than actually occurred. So you restaurant might make $2000/day on a good day, but you *claim* it’s making $5000/day and you deposit $5000 each night. That extra $3000 is the “dirty” money. Now it looks like it’s just cash income from the restaurant so it has been “cleaned.”
That’s a really simple example and it’s actually a lot more complex than that. For example, if the government ever audits the restaurant’s accounting, they’ll see they didn’t buy enough food to cover $5000/day in sales, so you have to falsify your expenses AND your profit. And sometimes a criminal enterprise will cover multiple different related businesses (say, the restaurant but also the parking garage next door and the meat supplier the restaurant buys from, etc.) so they can fudge numbers all up and down the supply chain.
But it would look suspicious if one person owned the restaurant and the meat supplier and the vegetable farm, etc., so the criminals set up shell companies owned by shell companies owned by shell companies, etc. to obscure who actually owns what. And maybe you don’t want to pay taxes so you invest some of that laundered money in things where you can show a loss to offset your tax burden. And so on and so on.
Basically, in a complex money laundering scheme, the whole idea is to make hard to determine all your businesses are owned by the same person, just doing business with themselves, and most of that business is *fake* so you can make it look like your money came from businesses instead of crime.
If you’re using your “dirty money” for regular cash purchases, such as gassing your car up, groceries, tipping the pizza guy, etc., nobody is going to notice.
You pay cash for a new sports car, however, and people are going to start asking questions. Pay cash for a house WAY outside the range of what you’re earning, and people that matter are going to start asking some questions.
Latest Answers