[X] My Assistant

[FlakJacket]

I've been watching a Canadian television show called Intelligence, very good show by the way, in which one of the characters runs a mid-level organised crime group selling marijuana and is look for ways to launder his ill gotten gains, with one idea being buying his own offshore bank in the Bahamas. I know this is miles above what the average runner would be involved with personally - hired to help facilitate is possibly another matter - but it piqued my interest and I know that there a few people on the boards that know a bit about the banking world and money laundering.

Now I've got no idea of whether the numbers they were throwing around were anything close to real life or whether the writers simply pulled them out of their arses. They mentioned fifty million dollars being able to buy forty-five percent ownership in a small private bank owned by an expat family that were having some financial difficulties. Is it just me or does that seem rather low? Although having a quick look from what I can see the Bahamas currently has over two hundred and fifty registered banks operating so there's bound to be a range of sizes and not everyone gets to be Citigroup or HSBC.

[martindv]

Dude. Where did you find it? I've been looking for, um... totally legal copies of that show.

It was mentioned in the back pages of one of the latest issues of Criminal, and the author of that book mentioned that people he knows who are involved in that field (mainly on the govt side) said it's very accurate.

But I would imagine $50M to buy a stake in a small bank sounds right.

[Fortune]

Sounds like it is in the right range to me.

There's an old Michael Caine/Jay Leno movie called Silver Bears that deals with a group of organized crime dudes buying into a bank in Geneva that might be of interest to you.

[Karaden]

Of course, this also kind of brings up the question of 'what is the point in owning a bank?' I mean what is the difference between some rich guy owning and running a bank, and that same rich guy just putting all his cash in a giant valut? In both matters he has to somehow secure physical assets. Now as an 'offical' bank the money and assests fall under the 'protection' of the government, but even so that seems like a very small advantage, especially when you consider that the rich guy gets his money from illigal sorces, so explaining how he has a bank account of $5,000,000,000 or whatever when his income records show he shouldn't have nearly that much.

Now, if he owned the bank he wouldn't have to keep it on offical record, but then the bank suddenly has extra money it can put out into lones that isn't accounted for and so on and so forth, and the money isn't protected if it isn't offically in there, so he is back to being no better off owning a bank then just building a vault.

So, anyone know what the actual advantage of owning a bank is above protecting the money yourself or just putting it in any old bank?

Only reason I can think of is that the bank can trade out fake money for real money, then pass on the fake money to bank customers, but that would get tracked down real quick when a few dozen people get arrested for trying to pass fake bills and all of them say they got their money from the same bank.

Oh, also the bonuses associated with owning a bank like income, but that could be made by a 50 mil investment in just about anything, and not a bank in particular.

[Fortune]

[FlakJacket]

[Ryu]

The limits for opening a bank are not THAT high, a few million euro (I seem to recall 5 Mio. Euros some 10 years ago?). Your problem is that you will need more to effectivly operate one with some kind of profit.

[martindv]

Does it matter (in the show) that international money laundering can now get every counter-terrorism group sicced on you now?

[kzt]

Unless you need a bank it's probably better to just go with the Panamanian shell corporation. You can do similar in some of the Carib nations too.

[Karaden]

[kzt]

You misunderstand. What money laundering does is convert money you can't explain how you obtained to the police/taxmen to nice legitimate money. The classic example is a Vegas casino, where people used to pay in cash and leave no audit trail in the good old days. Your real customers drop 2 million a day on the tables/slots, but you add three million a day in the counting room from your Hollywood extortion, illegal gambling operation in other states, and your drug smuggling. Now you pay taxes on the 5 million a day and it's now totally legitimate money that you can explain and spend freely, even though most of it is actually criminal proceeds.

The government doesn't like this. That's why any cash purchase or bank deposits of $10,000 or more (or a pattern of smaller ones) requires filling out some treasury forms. Wiseguys don't want to explain how they ended up with millions of dollars and yet have no job, etc.

That's one of the reasons the Mob built Vegas, thought these days the whole system is so pervasively monitored by so many tools that they are out of it. Hell, most of the gamblers are using the club cards so you can tell who lost and won what (so the gamblers can get their comps, etc), so there isn't the huge pool of anonymous money anymore.

[martindv]

Plus Jimmy Hoffa Sr. hasn't been running the Teamsters in a while.

[Snow_Fox]

$50 million is way low to buy a bank but you can possibly set up something, like mutual fund for that. the problem is that you don't want to own this. The owner gets all the attention from government. You want to have someone on the inside who isn't going to report things.

There is a great explanation in Lethal Weapon 2 from Joe Pesci of one way to launder money. The money goes as cash into a system/fund/bank and they do not report the deposit. they then lend you the money that you just deposited, less a handling fee. You now have a source for the money-"I took a loan." It is up to the bank to obscure where they got it from.(you don't pay back the loan)

Similarly if you have someone at a charity willing to do the same thing. Charities don't have to report where they got money from. So you 'give' $100,000 to a struggling church or charity that is legit. they then make a "loan" of $90,000 to you , which they then do not get paid back-you defaulted on the loan but hey that's you're credit rating right? and they are up $10,000 for the deal.

With investments we regularly take classes on money laundering and what to look out for. as a word of warning gang, if your firm suspects you of doing something funky they report it to the necessary channels within the company who, if they feel the first agent's concerns are justified will push this on the the regulatory agency and law enforcement agents BUT they will most definitely NOT tell you that you are suspect. SAR- suspicious activity report, is a bitch to fill out.

Activity that gets attention is multiple deposits of just under the $10k cut off line. something that Barry Bonds has done. and a series of deposits and with drawals in a short period of time. Especially if these deposits suffer from a penalty for an early wit drawl(many mutual funds require money to be left in for 60-90 or there is a 2-5% penalty.) and the client doesn't care.

[Fortune]

[Ryu]

One way of increasing revenue is adding cash flow to existing companies. After the company has paid tax for its earnings, the money is legal to spend. Lets say for high-paid consultants that increase the cash flow...

Easiest case is a few hundred bucks per day in restaurant bills. There is no direct food cost / customer relation, easy to sneak in a few phantom guests. The restaurant owner pays tax for the income, and has legal money afterwards.

[imperialus]

I'll second the shell corporation angle. In my current campaign my PC is a former high ranking Yak who has knowledge of money laundering and has 5 ranks in "knowledge: Creative Accounting." He created a corporation called "Pacific Rim, Consultancy Group" incorporated by the Cascade Orks. It only cost a few thousand :nuyen: (basically fake SIN's for everyone plus the fees associated with incorporation) and with everyone on the team holding equal voting stock he pours all their pay into it, trades it around for a while letting them pull it out whenever needed.

In practical game terms each PC receives a "salary" from the company and any time they need to cash out a larger amount, buying ware, tricking out a vehicle ect. he makes a "creative accounting" roll and pulls it out as a business expense. If he fails too miserably they simply loot the companies accounts, and funnel it all into a new company. It even makes money on the side for them by running around the stock market. This is another "creative accounting" roll performed once a month, the number of successes gauges how much it goes up, or down.

I've been meaning to write up rules for it anyhow and I have a bit of time this afternoon so perhaps I'll do that. It adds a bit of complication to things but it also increases verisimilitude so some people might get use out of them. They're also set up so you don't need a dedicated NPC "accountant" running the show unless you're moving massive amounts of money, just a few ranks.

[martindv]

[Kagetenshi]

Of course! Someone has to do what the people who own the banks want, after all.

~J

[martindv]

Of course. What was I thinking?

[imperialus]

Here goes: Imperialus' money laundering rules. Sorry about the length.

Crime fiction is full of untraceable bank accounts, bearer bonds, and other methods of money laundering. Shadowrun is no exception, certified credsticks, are the mainstay of this shadow economy but they’re only the first layer. While most groups may be perfectly happy with this state of affairs adding an element of money laundering can add another layer of realism to a game. I’ve kept these rules as simple as possible so they can be integrated to a campaign with a minimum of fuss. They’re designed to mimic the ‘feel’ of such activities, I know next to nothing about accounting in the real world (take a look at my chequing account, I dare you) nevermind money laundering, shell corporations and numbered accounts so this defiantly lacks in accuracy but it does hopefully capture the feel of this aspect of underworld life better than the system does currently.

[Shockwave_IIc]

[Snow_Fox]

yeah I know. I'm the one who fills OUT the report on investors.

Fortune I understabnd they were talking baout buying into a back, but looking for controlling interest still not enough. But say for the momment that it is, if you have that much to blow in buying a company, what do you then have to launder?

[Fortune]

[Cthulhudreams]

While they are currently launching a crackdown, until recently you could form a private bank in Nauru with a masked register of ownership that no-one would look at closely for 4500 dollars US - and Nauru is/was one of the biggest world centres of money laundering - the Russian mafia are estimated to be moving 70 billion dollars through Nauru's private banking system.

While there you could pick up a passport for 15k to 35k - a new Sin for the money you are laundering ;)