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.
Full Version: Buying Your Own Bank?
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.
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.
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.
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.
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.
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.
| QUOTE (Karaden) |
| 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? |
Money laundering.
Aside from the other obvious ... banks make an obscene amount of money on their own.
| QUOTE (martindv) |
| Dude. Where did you find it? I've been looking for, um... totally legal copies of that show. |
Well that's good that you're looking for a legal copy. Because I hear that there are some very naughty people that might use one of the many varied BitTorrent clients and try searching isohunt, searching for 'Intelligence' and sorting by size, and downloading the .torrent files for the two series of the show. But of course as you said you're looking for a totally legal copy so you'd never do anything like that would you?
| QUOTE (Fortune) |
| Sounds like it is in the right range to me. |
Yeah, I suppose it's fairly reasonable on reflections.
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.
Does it matter (in the show) that international money laundering can now get every counter-terrorism group sicced on you now?
| QUOTE (FlakJacket) | ||
Well that's good that you're looking for a legal copy. Because I hear that there are some very naughty people that might use one of the many varied BitTorrent clients and try searching isohunt, searching for 'Intelligence' and sorting by size, and downloading the .torrent files for the two series of the show. But of course as you said you're looking for a totally legal copy so you'd never do anything like that would you? |
That's a shame.
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.
| QUOTE (Fortune) | ||
Money laundering. Aside from the other obvious ... banks make an obscene amount of money on their own. |
How exactly does the money laundering work so that everyone doesn't start getting arrested for attempting to pass fake bills and then point out the same bank as the sorce of their money? And as I said, plenty of other ways to make money on an investment besides a bank.
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.
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.
Plus Jimmy Hoffa Sr. hasn't been running the Teamsters in a while.
$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.
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.
| QUOTE (Snow_Fox) |
| $50 million is way low to buy a bank ... |
Note that most people, including the original poster, actually are referring to 'buying into' a bank. Not necessarily buying one outright.
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.
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.
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 
(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.
(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.
| QUOTE (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. |
THe Bahamas has a government?
Of course! Someone has to do what the people who own the banks want, after all.
~J
~J
Of course. What was I thinking?
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.
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.
| QUOTE | ||||
First, let me introduce myself. My name is Akio Hasamura, and I’m an accountant. Not the most glamorous profession I know, but hear me out. What I have to say might just save your life, or at least let you enjoy your retirement if you live that long. I used to be employed by one of the larger Yakuza Gumi’s in Japan, shuffling money from one racket to another keeping their finances one step ahead of the law. Since leaving my employer I have become a freelancer working with other independent contractors such as yourselves helping runners make the most of what they have. Staying at the bleeding edge requires more than the newest chrome or fetishes, most runners fail because their financial situation makes them dependent on outside forces to put food on the table, ammunition in their guns and metal in their bodies. Only by breaking free of that dependency can a runner truly become free to act as he wishes. With financial security a runner can upgrade when he needs to and even turn down work that is too dangerous or immoral. Most runners see corporations as the enemy, and never think about them beyond who is giving them their next paycheque or who’s goons they need to kill. They are the Minotaurs inhabiting the dangerous labyrinth of international finance. Smart runners who can learn how to navigate this maze however can find themselves reaping many benefits. Corporations can be both a shield or weapon depending on ho w they are used. They can provide security, a method of hiding the money funneled into a runners pockets and leveraging it so it has its greatest effect. This is a primer on one such method of navigating these murky waters. It has served me well in the past and now hopefully it will help you too. Numbered Accounts: Numbered accounts are a wonderful tool for money laundering, albeit a limited one. They are also the most commonly known by the public. Any time you see a terrorist on the trids demands money he always demands that it be transferred to a numbered account somewhere. They’re also called Swiss Bank accounts which gained notoriety back after the Second World War (for those of you who paid attention in history class) for hiding money that belonged to the Nazi’s. In a numbered account your money is as safe as it is ever going to be short of burying gold bricks in a vault somewhere. Unfortunately while it is safe, it is also useless. Withdrawing money from a numbered account takes considerably more effort than punching in an AR password and having the money transferred straight from you to the stuffer shack. Depending on the amount you are withdrawing it can take hours or days for the transaction to complete and anytime you take money out it leaves a trail that could eventually get traced back to you. Not a good state of affairs. Numbered accounts make wonderful emergency funds and are perfect places to start the laundering process but don’t rely on them exclusively. It’s also important to remember the legitimacy of the bank itself. Nothing hurts more than going to withdraw money for that new set of wires only to discover that your bank went under. Easiest way to tell how stable a bank is, is to see if they have a minimum balance. Setting up an account with Credit Suisse might require a minimum balance running into the hundreds of thousands of while Banco Independencia in rat hole of a town the Carib. League might only require a couple hundred. Both have their uses but it’s important to consider the risk you might be taking by going bargain hunting. A numbered account consists of nothing more than a series of random numbers (usually between 10 and 20 digits long) that when combined with a password chosen by the account holder are the only way to gain access to a given account. This means that with no biometrics or other method of proving ownership the account number is the only way to get at the money. If you loose it, your dog eats it or you bleed all over it you better hope you have it memorized or you can kiss your hard earned cash goodbye.Game rules: Setting up a numbered account requires a “Knowledge Accounting� or similar role with a threshold of 2-4. No SIN is required but most banks require a minimum balance. This can be any number the GM desires and is likely going to depend on the size and legitimacy of the bank. Generally a few thousand should be good enough for most runners. For the most part a numbered account should be fairly secure. After all the goal of this is to get the players doing something with their money other than hording it in certified credsticks under their mattress and draining their accounts would be counterproductive to that goal. Having a numbered account ‘disappear’ should be a major plot event, or jumping off point for future runs, not a random occurrence.Shell Corporations: A shell corporation like its name suggests is a company that just looks like a company. It doesn’t produce anything, it doesn’t have employees except on paper, it doesn’t even need to maintain a physical presence such as an office or warehouse. It exists only on paper, or now days in electrons. Shell Corporations are the second step in the money laundering process and probably the most important. They can also be highly lucrative on their own if well run and provide a measure of security for a runner. To set up a shell corporation you first need to find a country or other independent political body that has very lax economic and banking laws. Cascade Ork territory is one of my personal favorites, it’s close enough to Seattle that you can get their on business if necessary but the orks have made their reputation and staked their economy on being a haven for smugglers and with that comes a heavy incentive to turn a blind eye to the corporations operating there. If you have more exotic tastes then places like Hong Kong, Dubai, and even old standbys like Switzerland or the Bahamas can serve just as well. Stay away from places run by the big boys like Tokyo, LA, and New York though. While they probably see more money laundered through them than anywhere else on the world your average runner is never going to have the resources to make use of them and will probably get crushed simply by accident. After finding your home away from home you need to form the corporation. To do this you need to register with the local government and pay a fee. You also need a valid SIN and depending on where you are registering the checks on this SIN can be quite extensive. Make sure it’s a good one. You’ll also need to decide what kind of corp you are creating. There are literally hundreds of different options ranging from import/export to security, to manufacturing but for the purposes of this guide I’ll stick to my two favorites which will likely mesh with the needs of the average runner. These are Investment Corporations and Consulting Groups. I agonized about including Import/Export companies but decided against it, largely for brevity. I-X corps are the home turf of smugglers and while they can be great ways to hide large amounts of money smuggling is a full time job, and not likely one that your average runner will be interested in. Investment Corps: IC’s are really nothing more than a bank account with an extensive stock portfolio. You can either run them yourselves or pay an investment advisor at a bank to run it for you. There are even matrix programs designed to play the markets if you really want to just leave it to do its thing. They’re nice because they are very hands off and require little input from outside. The other big advantage of them is that because the money is invested they work for you, causing your money to grow (or shrink) along with the markets. By funneling your money into an IC it will clean itself off as it shuffles from company to company. IC’s can also be set up with a single shareholder making them the perfect tool for a freelance runner who often finds himself working with different people. The biggest disadvantage to an IC is that its value depends on the market, and as we have seen quite clearly on several occasions the market isn’t the most stable thing mankind has created. While they tend to be diversified enough to keep from loosing all of their value they can be quite volatile and it is likely a good idea to keep a rainy day fund set-aside separately (numbered accounts are great) for occasions that the market takes a nosedive. It can also still be challenging to get money out of the IC quickly. Stockmarkets have limited hours and withdrawing a substantial amount of money may take a day or two, especially if you attempt to withdraw on a weekend. Game Rules: Setting up an IC requires a “Knowledge Accounting� roll with a threshold of 4-6. Once this is accomplished once per month the PC who set up the account must make another “Knowledge Accounting�+logic roll. He can either do this himself, pay an accountant to do it for him or run a “investment� matrix program to do it. This matrix program is follows all the rules that a normal legal comlink program does rolling the sys+program rating autonomously. The PC cannot use edge, nor gain any benefit from VR or hotsim. After all, the program is running itself in the background of his comlink all the time, the character rarely interacts with it. After rolling look to the Gains/Loss table to determine what happens to the company’s assets. If the PC himself makes the roll then he can use edge normally. This represents him taking an active stake in watching the stocks on a regular basis and adjusting what money goes where. The cost of an investment banker is usually 5% of the net gain per skill point or 1000:nuyen: per skill point, whichever is higher. Their skill always equals their logic. GM’s should modify this table to suit their campaign’s needs. After all if your PC is throwing 18 dice in his accounting tests
An IC cannot be accessed whenever the PC wants. To access money from it, it must be transferred to another account or certified credstick. This transfer takes 72 hours with each success on a KA+Logic roll reducing the amount of time by 12 hours to a minimum of 12. Consulting Groups: The biggest difference between a IC and a CG is that CG’s typically have employees and multiple shareholders. Only a percentage of the money that a CG has is tied up in the markets, the remainder is in a more traditional bank account. This means that the CG is typically less volatile than an IC and the money is easier to access. They are also an excellent choice for teams of runners that work together since they can all sign on as shareholders and benefit from pooling their resources. Another added benefit is that a CG can “hire� the runners as employees and pay them a monthly salary. This means that the members of the team need not worry about finding enough work month to month to keep the lights on. As long as the corp itself has enough money, every month the team can receive a paycheque that will cover their living expenses, whatever they might be. Needless to say this is only really an option for teams that work together regularly and perhaps more importantly, trust each other. Another plus is that CG’s tend to invest their money more conservatively. While it’s unlikely that they’ll turn as much profit as a dedicated IC they are also much less likely to loose big either. The biggest downside to a CG is that it can be even more difficult to make large withdrawals on short notice than it might be with an IC. CG’s need to account for large purchases, and while it might be easy to get 30 grand out to buy a company vehicle, it’s another thing entirely to try and write off 100 grand so that the teams razor boy can buy some bone lacing. Game Rules: Setting up and maintaining a consulting group is identical to setting up an investment corp. The only difference is that it can include employees who draw a monthly salary. Each employee needs to have a valid SIN though it will be checked less vigorously than the SIN of the individual who sets up the corp. This monthly salary can be whatever the PC who sets the account up desires. After setting up the account the salary will be paid to that particular SIN. If the SIN is compromised then the employee records can be deleted and a new employee set up with an threshold 3 Accounting+Logic roll. Each month the PC who set up the account makes another Accounting+Logic roll and consults the CG gain/loss table. This is done in the exact same manner as the IC roll, including the use of programs or outside accountants, just the table is different.
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| QUOTE (Snow_Fox) |
| 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. |
Just to back this up a little. 1 of the reasons why they will not tell you that you are being investigated, baring professionalism (In the UK at least) is because "Tipping off" is also a money laundering related crime.
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 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?
| QUOTE (Snow_Fox) |
| ... if you have that much to blow in buying a company, what do you then have to launder? |
Future ill-gotten gains.
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
While there you could pick up a passport for 15k to 35k - a new Sin for the money you are laundering
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