Hacker News Reader

Comment by nwiswell | Hacker News Reader

None of this works if the serial numbers were recorded when the cash was put into the vault.

Take your first example: the music festival promoter shows up at his bank with a duffel bag of cash -- that's not unusual until suddenly every single missing serial number lights up the bank's cash handling systems.

Busted.

It's possible to launder marked cash, but it has to be in such small quantities that it's always plausible that it was simply spent in circulation, which in practice dramatically limits the speed with which it can be laundered.

Probably the single most straightforward approach to dispose of marked bills would be to swap for unmarked cash with someone who doesn't care, like an overseas drug lord. But man, good luck with that.

View on HN

Just bring it out of the country. Many third world countries use USD as a side currency, just spend it there. Buy a few houses in Syria, a few businesses in Ecuador, sell them when you need clean money.

No it doesn’t work that way. You assume they can just move $20 million+ in cash out of the country just easily, then go to Syria of all places (and hope a terrorist or rebel group doesn’t murder them and take the cash) or Ecuador (and hope a cartel doesn’t do the same).

Many armchair money launderers on HN cooking up unrealistic schemes..

There’s a reason real money launderers charge up to 50 cents on the dollar. It’s f** difficult.

https://insightcrime.org/news/chinese-money-launderers-mexic...

> While the involvement of Chinese money-laundering rings in handling drug proceeds from Mexico is nothing new, a number of recent court cases in the United States have revealed crucial information about how these schemes work ... weekly pick-ups from representatives of Mexican criminal groups, made in cash ranging between $150,000 and $1 million, with an average of $500,000. These were made in large cities including Chicago, New York and Atlanta ... network of Chinese-owned businesses in the United States and Mexico ... transfer a correspondent amount of money through Chinese banking apps. This happened entirely through the Asian country’s domestic banking system ... “It’s the most sophisticated form of money laundering that’s ever existed,” one of the US sources told Reuters.

This is also literally one of the most complex, relationship-based, and opaque to outsiders communities on the planet. Try to wrap your head around the unimaginable clout and favor calling that this took to develop. "Exclusive" is an understatement. Nobody has free access to something like this.

It's basically the Chinese version of hawala except with drug dealers. A number of ethnicities have developed informal value transfer systems. Pretty sure it's well documented that everyday Argentinians use systems like this for getting money out of Argentina.

After reading the article it's still not clear to me what's meant by "transfer a correspondent amount of money through Chinese banking apps".

Jane picks up 500K in cash in Chicago and then transfers 450K from her business in China, to Joe's business in China. Joe then transfers 400K from his US account to Juan's account in the US.

Is that how it works ?

yeah its just like Hawala system works

It relies on everyone having other money already aside from the illicit funds

'Ndrangheta are famous for laundering money for other cartels, criminal organizations etc. Tens of billions. They have hooks in many countries governments say in EU and launder billions ie via EU development funds (this happened in my home country on big scale, corrupt directly involved government fell, another came, rewind 4 years and the crooks are back and won elections, even stronger... ashamed where I come from)

Yep. You don't go antagonistically against the system, you just corrupt it.

I wonder what's the difference between the IRS and their French and Italian equivalent. For what I've experienced in both those countries, the easier path would be paying a percentage of the heist to whoever is making those checks.

> There’s a reason real money launderers charge up to 50 cents on the dollar. It’s f* difficult.

I have no sense of scale for any of the things in this topic, my reaction to this is "only 50 cents?" because that would still leave these thieves with 15 million USD, which is significantly more than most Americans earn in their lifetimes.

Honestly, rewatching Breaking Bad, and while fictional I have to commend the attention to detail and realism in their laundering process. The part where Skylar tells Walt that $7M would take up to 10yrs to rinse through their carwash business, or the fact that Saul takes 17% in addition to their other overheads. Ozark also nailed it when the lead tells the would-be robbers that they'd only be able to buy groceries with stolen cash, as large purchases would raise red flags.

I find any US crime show that places the IRS above FBI, DEA etc in terms of fear factor is generally a better one.

Reading up some on the difficulties of laundering money was one of the more interesting topics in the last few years for me, such as this video[1]

It turns into a fascinating business and process problem, since you can only inject a certain percentage of dirty money into a legitimate cash revenue stream. And this in turn means - even if you had infinite dirty income, you end up with a finite amount of money you can launder per month. And marked bills make this a lot harder. And if attention comes to the business it becomes harder.

And that in fact has happened in reality. Some cartels were earning so much dirty money that they couldn't launder it all. And in fact, just storage of the dirty cash became a real logistical issue. And to be honest, "storage of large amounts of illegal cash" hasn't been a problem on my radar so far.

1: https://www.youtube.com/watch?v=viM_t5kIpGc

>No it doesn’t work that way. You assume they can just move $20 million+ in cash out of the country just easily,

It does actually work exactly that way all the time. On the larger end, major drug traffickers routinely move millions in cash to Mexico and elsewhere with little trouble.

On the smaller end, many lesser criminals and groups also do the same in creative ways. 20 million in cash is a lot, physically, but nowhere near enough to be really hard to move overseas through smuggling in several largish, carefully concealed shipments, especially if you can use a small part of that same money to pay for all kinds of object shipping arrangements.

You've got it backwards. You don't hope the cartel doesn't steal your money. You call them up and offer an easy 10% cut for their services. If it's their turf and they get their cut, everything is OK.

“just”

If you get caught with over $10,000 undeclared at any US border or at the corresponding border, it gets seized

If you declare it, it gets seized.

lol that anyone thinks we have borders!

Very few US border crossings check anything leaving the US. The Canadians at some spots do, mostly to catch guns and drugs.

The Mexicans usually don’t bother.

And in both cases, most remote crossings are unmonitored.

That used to be the case but not so much anymore. The last two times I have driven into Mexico I've been searched and questioned (granted not very thoroughly like the US side does). The took pictures of the vehicle/occupants and had some kind of video device as well.

You don't have to be at the border and the amount can be far less than 10,000. If law enforcement anywhere in the US learns you have it, it gets seized.

Those dollars need to be both exchanged and intermingled with different dollars, and unlinked from the illicit source before depositing into the electronic financial system

I don’t think financial institutions care as much as you’re assuming, and there are alot of types of organizations that count as institutions - where the whole anti money laundering regime relies on trusting that the other institution vetted the money - but assuming they do care, it means avoiding them in alot of ways

I still think reintegration can be done with just cash payment, and cash investment into a revenue producing business. But what you’re saying does rely on the recipient also not depositing into a bank for some time until there are enough other dollars intermingled too. What’s “enough”?

>None of this works if the serial numbers were recorded when the cash was put into the vault.

There are workarounds even for that, such as shipping the money overseas and using it in places that love US dollars but don't much care for cash transaction reporting rules.

However, I doubt any group as apparently pro as these guys, who seem to have known exactly what to hit and when for a ton of money, would have done so without first also verifying that the serial numbers weren't recorded. I'd bet that they werent, at least not yet.

It's difficult to imagine that it wasn't recorded well before it even reached the vault. Firms like Garda inventory cash in excruciating detail as a matter of standard procedure, since otherwise it would rapidly disappear into employee pockets.

There is a big difference in labor between confirming sealed bundles of cash are intact, counting the bills, and tracking every serial number of each bill.

Considering how ‘cost efficient’ they were being on security, hard to imagine they were maintaining detailed databases of each serial number for this cash. These are the same folks that bitch and whine over $.25/hr raises for their employees.

> There is a big difference in labor between confirming sealed bundles of cash are intact, counting the bills, and tracking every serial number of each bill.

There are machines for this. Garda absolutely has them.

There are also non shitty security systems. Garda absolutely has them.

They just didn’t have them installed here for whatever insane reason.

Reply on news.ycombinator.com