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Comment by umeshunni | Hacker News Reader

Here's the story - HMNY ( Helios & Matheson Analytics - the parent company of MoviePass) is owned by an Indian company that filed for bankruptcy in 2016 and then re-emerged with MoviePass in the US.

The entire thing is probably a giant money laundering or tax evasion scheme.

https://www.moneylife.in/article/helios-matheson-liquidated-...

https://www.insider.com/moviepass-owner-emerged-from-indian-...

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> The entire thing is probably a giant money laundering or tax evasion scheme.

Donating money to movie theaters is not how money laundering or tax evasion occurs.

Losses can be tax deducted to cover partially reported incomes.

Yes, and not giving away the money in the first place is even more profitable. When you hear about these schemes they are generally paper losses (depreciation being a big one). It's not in your interest to hand AMC millions of dollars for a tax deduction.

Well if we are talking tax evasion and money laundering we might as well include conspiracy.

But it's not a conspiracy, Movie Pass really did pay theaters full price for tickets while charging customers $10 a month. It lost a huge amount of money. No one disputes any of this, it's just someone who doesn't know anything who said "money laundering". They are wrong, it was an obviously bad business, not a money laundering or tax scheme.

I think it is not a for stretch invoking "money laundering" is a knee jerk reaction to seeing crazy business model that doesn't make sense --> something fishy must be going on. While the neighbor of incompetence maybe malice they are rarely home, and if they are even more rarely seen in the house.

I know that when I first learned of movie pass years ago and it was explained to me. It made literally no sense how they'd turn a dollar despite it being explained to me more times than I can count.

I also remember thinking it sounded like some alternative scheme was going on. However I probably acted more paranoid than the rest and decided to pass on getting cheap movie tickets.

Bankrupt companies don't have income they need to cancel out with a loss.

What if you donate dirty money, then collect clean money from subscribers?

Considering how all money streams for MoviePass depend on domestic card transactions which generate 100% auditable records... I'm completely failing to see how it could possibly result in money laundering or tax evasion.

Can you explain how? I don't see any obvious explanation in the articles you linked.

It's in vogue to describe a business you don't understand as "money laundering" even when you don't understand money laundering.

Ok, but what about mattress stores? Are you telling me they aren't for money laundering?

> Ok, but what about mattress stores? Are you telling me they aren't for money laundering?

Margins are insanely high on mattresses. Why the connection to money laundering?

It's become a meme, likely due to the clusters of mattress stores that seem to pop up despite zero customers.

Mattress Firm's parent company was up to some sketchy stuff. https://www.reuters.com/article/us-steinhoff-intlnl-ceo/stei... The CEO resigned.

Planet Money covered that: https://www.npr.org/sections/money/2018/12/13/676538506/why-...

the money they pay AMC has to come from somewhere right? Cue in illegally obtained money that's now in the system. profit??

Probably not in this case, but thinly traded share prices could be used to launder money.

Adam 1 buys shares with clean stake.

Adam 2 pumps share price with dirty money.

Adam 1 sells shares, getting stake back, plus clean profit.

Adam 1 short sells shares.

Adam 2 dumps shares, dropping share price.

Adam 1 cashes in on short.

Adam has laundered dirty 2 money into clean 1 money.

Needs a story to work the market a bit. This could work at a business level too.

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