People always say mattress stores are shady and used for money laundering. Not totally sure I understand exactly what money laundering is. How would this occur at a mattress store?
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The most powerful agency in the US government is the IRS, the IRS might let you walk away if you don’t report an extra 5k one year or another but if they catch wind that you’re not paying taxes on large sums of money they will begin to investigate. Their investigations are thorough and their business isn’t to implicate you in shady activity, it is to prove that you are committing tax fraud. It is REALLY HARD to prove that someone is a drug dealer if their network is large and intelligent, but it is REALLY EASY to prove that they committed tax fraud if, well… they don’t pay taxes. An easy way to prove that you aren’t paying taxes is to evaluate your net worth and see if you’ve been payed the IRS enough money to justify having such net worth, if you have a net worth of $100,000,000 but you’ve only payed $7,000,000 in taxes then it becomes easy to see that you’re not paying taxes proportionately and thus committing tax fraud. This means that you won’t be able to use your dirty money to make any purchases which can be used to calculate your net worth. No cars, no houses, no rentals, no investments, no assets. This sucks because you obviously worked really hard in order to afford such assets.
This is where the solution comes in, what if we didn’t have to hide our dirty money, what if we could take that money and clean it, launder it, give the IRS their cut and then spend it however we choose. So start an LLC and you get a loan, buy a space for a mattress store or car wash or auto shop, sell mattresses for a discount, claim to have sold them at full price when taking cash payments or report the discounted price which you sold then at if doing electronic payments. Now you bought those mattresses for $700 using your loan money but you sold them for $300, the electronic payment proves it, so you took a loss of $400, you report your loss to the IRS and they reimburse you for 60% of that loss this year, and then the remaining 40% over the next 2 tax years. You’re cleaning $900 every time you sell a mattress now. Say you sell only 10 mattresses a month, that’s $9,000 a month, open more stores, sell 15, maybe even 20 mattresses. Clean more. Now you have clean money and you can buy assets like fine art, sell the art for cash and report a higher price. Open legit businesses, circulate your dirty money into your vaults, an extra 10k a month for a business making 250k a month is easy to write off.
Even if you’re caught for tax fraud this doesn’t mean you’re caught drug dealing. Lots of drug dealers get caught for tax fraud and go to prison for tax fraud, not drug dealing. Tax fraud however is a very serious crime, the IRS can put you away for a very long time if you don’t pay up. To quote the king of New York, in reference to the IRS “if a dime bag is sold in Central Park, I want in on it”
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