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Comment by ncmncm | Hacker News Reader

As I understand it, the international "gold standard" for money laundering is still real estate. The reporting requirements the US pushed onto international banking specifically except real property transactions. Thus, property is the place embezzled money is parked.

Vancouver, BC seems to be the favored place to park Chinese money. Of course New York remains popular. American "midwest" farmland is another big sink.

I would welcome any updates to this situation; my information might be old.

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I have no idea to what extent they actually get used for money laundering, but churches are still the only form of nonprofit in the US that automatically gets exempted from having to file a tax return. I'm sure the whole season five plot of The Wire where this was how drug lords were funneling money to the local politicians was not entirely fictional, given how everything else in the plot was based on the writers' real life experiences.

Of course, even on The Wire, this was small time compared to the money laundered through urban reclamation and seafront development projects.

Could this explain some architectural designs in the world that don't make too much sense like the skyscrapers next to a cargo cult of urban sprawl next to massive golf courses in Dubai?

Dubai has no income taxes. So this is irrelevant. Companies are not even required to hold records for tax purposes.

They are still required to hold records if they want any local bank to work with them.

But criminals do not need local banks.

They do need banks.

Actually saw this in depth linked article the other day about how Real Estate inadvertently become used for money laundering (Hint: Lobbying)

https://www.theatlantic.com/magazine/archive/2019/03/how-kle...

>Vancouver, BC seems to be the favored place to park Chinese money.

Not familiar enough to say, but as I hazily understand it people with Chinese money often want to get it out from under party control.

In the most common understanding money laundering is used to make 'dirty' illegal money into 'clean' legal money.

Are there situations where laundering money from any particular country is more of a gray area than this common understanding? The Chinese example above springs to my mind as being potentially one, but that is because I don't know enough to know why my hypothetical is wrong.

That is money laundering, for the Chinese Communist party of course. Of course, you can consider it legitimate. But then a small island in the middle of no-where will consider drug money "legitimate" after all there is no harm in selling white powder, to their eyes.

There is no easy answer to this. If you are escaping China financial authoritarianism, somebody else might consider France taxes to be authoritarian given that they are too high. Is is legitimate that they evade taxes, and launder them to Dubai[1]?

[1]: Not hinting that Dubai is a popular spot for the French.

It seems like this conflates money laundering and tax avoidance, I thought money laundering didn't happen because people wanted to avoid taxes on the money, but rather they wanted people to not know the money was gotten illegally.

As I understand it money laundering, when it works, ends up making previously acquired illegal and hidden money available for taxation - at which point of course people start trying to avoid paying those taxes.

I've always assumed that when illicit things are well-known enough that I've read about them in the mainstream press that probably means criminals have moved on to something else long ago.

It's a bit like "top secret" military tech. If you're reading about it that means it's old news that no one can be bothered to keep a secret any more.

Maybe, but if it's not broke, don't fix it. There seems to be very little political will to do much about money laundering.

They do require your average Joe to report the source of the funds upon bank deposit, declare cash in excess of $10k at airports and bank transfers in excess of that are the object of increased scrutinity, all in the name of "preventing money laundering". Big time crooks are using shell companies, cryptocurrencies, AirBnb and other means to launder money.

Well, there first has to be a process to get your money clean enough to buy real estate. You can't buy a house with bitcoins or a suitcase full of cash without raising a lot of suspicions.

You can buy a house in bitcoin, they don't even have to be that expensive.

Source: I just bought a home in Los Angeles. I expected I'd have to compete against all-cash offers; I did not think I would have to be competing for a home against all-bitcoin offers. Many brokerages from my anecdotal experience will gladly accept Bitcoin. (I have no stake in crypto in any capacity, just thought it's worth sharing, since it surprised me)

https://themillergroup-bcb.com/buy-with-bitcoin https://www.dirt.com/gallery/moguls/power-players/crypto-bil...

As far as I know, none of the major escrow agencies accept Bitcoin directly. The preferred method of deposit is still either a garden variety wire transfer or cashier’s check. That doesn’t mean that Bitcoin is impossible, but a boutique escrow agent such as one of these linked will have to be proposed by the buyer, and the seller will have to accept the risk of a relatively unknown agent being involved.

That makes complete sense. I will however say that the 3 homes I personally encountered where this happened (think $1-$2m range, not estates worth 10s of millions), the _selling_ agents were proudly proclaiming they accept Bitcoin, with one even saying their sellers preferred Bitcoin to all-cash.

Gee, that doesn't sound suspicious at all.

> As far as I know, none of the major escrow agencies accept Bitcoin directly.

In Washington State every attorney is automatically a licensed escrow agent. I believe this is the case in many/most states. [*] They certainly aren't the cheapest escrow agents, but there are enough attorneys that you simply need to work your way down the list until you find one that handles bitcoin. There are a lot of fish in this ocean, and they like getting paid.

This advice applies to pretty much any "$BIG_ESCROW_COMPANY won't do XYZ for irrational reasons" problem.

[*] in fact, technically it's the other way around: WA escrow agents are licensed as "limited practice attorneys" who are only allowed to practice one very narrowly-defined type of law: escrow arbitration.

https://www.wsba.org/for-legal-professionals/join-the-legal-...

In Australia we allow briefcases of cash for property purchases.

Lawyers, Accountants, Real Estate Agents are all exempt from having to report anything suspicious involving property.

Since year 2006 the govt keeps promising (but failing to actually implement) AML legislation therefore continue allowing these 3 gatekeeper professions to facilitate laundering of untold illegal $billions into property which helped us continue to break annual house price sales records for 20+ years and achieve eye watering house prices (currently over 10x the average annual gross wage to purchase an average house and yet prices still rising rapidly)

[2021] https://mlexmarketinsight.com/news-hub/editors-picks/area-of...

[2020] https://www.michaelwest.com.au/money-laundering-bill-finally...

[2016] https://youtu.be/otWm4yh7Rh4

[2015] http://www.fatf-gafi.org/media/fatf/documents/reports/mer4/M...

I'm not sure of current statistics, but IIRC around year 2015 foreign property purchases in the state of Victoria were approaching 20% of all sales.

Of course not all that was using laundered money, but it would have been nice to remove the market distortion of 22-year olds rocking up late to an auction in their Merc and bidding $100k or more over the current bid to easi!y win (waaay more than needed to actually win)

about thirty percent of home purchases in the greater Bay Area were cash or equivalent in 2018, iir

Cash as opposed to mortgage not actual dollar bills right

You would be surprised.

I'm open to the opportunity, do you have the goods? Surprise us.

Doesn’t “cash” usually just mean no financing contingency?

I would imagine this is not physical cash but funds in a bank account. You would need to launder the money first to get it into the financial system before making the real estate purchase.

That’s what Canadian banking is for, just have a lawyer set up a local account for a foreign entity, transfer money through a Canadian bank and just about everybody will take it next. Or so I hear… https://projects.thestar.com/panama-papers/canada-is-the-wor...

Who knows if that’ll change https://www.mccarthy.ca/en/insights/blogs/techlex/canadian-a... or more broadly, https://www.iisd.org/itn/en/2021/06/24/the-end-of-tax-incent...

I talked to someone who made such a purchase - it’s not actual cash, it’s just showing sufficient assets to pay cash, then financing when you close.

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