Spanish police arrest ex-fraud chief after €20M found in walls of his house
theguardian.com
theguardian.com
Be a promotor or promotion company, sell VIP tables at big event or music festival for 20,000 euro each, 9 out of 10 clients don’t show up (because they don’t exist and you made them up)
Do it all summer, our economy is big enough to support this
Your money is now clean from selling VIP tables
Deposit cash, pay taxes, move on
Is there a missing /s? Like this is neither easy nor a plausible way to get away with financial fraud.
but either way, the answer is yes, and yes, and no sarcasm
first, the investigation is never going to happen. but okay, lets play auditor
the auditor is like “wow you paid your taxes on time and properly, but I hate that you have made money, so lets check the receipts”
“hmmm, big cash, who are these clients?”
“What!? you didn't do KYC on a transaction of 20,000 euro cash, 1,000 times!? ah but the parties were in Luxembourg and Austria and Monaco where such cash transaction limits don't exist, well Monaco’s is 30,000 euro per transaction, sorry for the inconvenience, on behalf of the King of Spain I apologize for our hubris in thinking this had anything to do with our ridiculous AML regime”
The question wasn’t how the Spanish Anti-Fraud chief would launder.
A number of high-profile acts in the US have had managers convicted for this in connection with drug trafficking and other organized crime.
It’s absolutely plausible.
I’m not sure why you think a cursory audit would reveal that a cash receipt was forged.
TAM?
Plus, there has got to be more critical information -- left out of the comment -- on how to get such a scheme to work. I highly doubt that most countries have left a massive hole in their anti-money-laundering systems that allows a person to simply claim to have massive transactions in cash with no (or easily fakeable) documentation.
Find some millionaire to pay you your own money for a job or something, give them 10%? I guess you still need to launder the money somehow.
Now I want to know how people can turn illegal cash millions into clean laundered money in 2024.
What you'd actually want, in that kind of setup, is to hand the active owner of the business you just partnered with a big bag of cash, see that distributed into the flow of legitimate income from the business, and then have it returned to you as dividends or whatever on your ownership stake.
But in the show, the goal is to then book a bunch of fake expenses against the business. So:
1. Purchase ownership stake in a hotel, for cash. The cash doesn't need to be legitimate. Money is transferred from you to the active owner.
2. Book fraudulent expenses for the hotel, making it look like it's spent a lot more money than it really has. No actual money changes hands anywhere.
3. Now you have a piddling amount of legitimate money from the hotel, and a big bag of illegitimate cash that you still haven't laundered.
We've skipped the step where you hand the owner some of your illegitimate cash under the table and then the owner gives it back to you above the table, which is the part of money laundering that launders the money. If you want to embezzle from a running business while making your expenses look like business expenses, you can just do that; you don't need to start with a pile of illegitimate cash.
eg: Your (say) hotel | bar falsely inflates customer income and then spends the illegitimate cash (supposedly from customers that don't exist) on rennovation works and "new" carpets, plumbing, etc that don't exist - the shell trades companies (carpentry, plumbing, labor hire) can report that money as legitimate washed income from the hotel.
There are a number of variations of this.
Why would you want to complicate it more with the fake rennovation works? Especially when a hotel is so much easier. You can just put fake guests on the book. (Or report longer stays for your real guests.)
With the renovation business you have to somehow cook up bills for the “new” materials and the workforce. So many more things the authorities could check there and thus so many more chances to slip up and get caught.
The ideal here is to have many injection points that can be inflated to a degree that doesn't quite raise suspicion .. and fewer collection filters (fake plumbing businesses, etc) that each 'charge' several injection points for non existant work and pool money that's invoiced and trackable (from hotel to plumber).
Also, as noted by SilasX in a peer comment the books for the fake work can include higher than normal payments for "supplies" to cartel owned suppliers .. yet another (fake but) documented trail to explain income and profits.
As the pooled money grows larger it's increasingly better documented.
It's literally a full time occupation to generate a mountainous pyramid of a paper trail to "explain" a million or so a week.
You might note that this scheme doesn't involve you owning the hotel to any degree. You only need to own the plumbing business. That's the opposite of the situation on the show.
The work is billed by fake (or better, partially fake) contractors who do no work but charge for time, labor and supplies.
It's a funnel with many cash casual customer locations inflate their intake and spend the excess on illusionary busywork "performed" by the next tier in the pyramid.
The entire paper tiger is controlled by the same entity .. who likely firewall and partition sections away (eg: the part that Marty did in Ozark (I read the synopsis) would be the cash flow in and a good number of lower level shell companies that he indirectly controlled) from each other and only are connected in a legal way to the upper layers that have documentation for their inputs from below.
First, they haven't obfuscated that; it's not present at all.
Second, your first step is that your hotel falsely inflates customer income. Then you follow up with some pointless additional steps. But if you can falsely inflate customer income, your job as a money launderer is already done. There are no additional steps. Spending revenue from your company on spurious invoices from another company is how you'd pay a bribe, not launder money.
You might want to dwell on the bookkeeping scale required to soak up that volume in a diffuse manner and then "legitimitely" consolidate that upwards.
I'm with you that a sleepy rural hotel can't handle that.
However, charging fraudulent expenses to the same sleepy rural hotel can't fix that problem. (It aggravates it!) The hotel can't spend more money than it has. And if you can make it look like the hotel has enough money to suit your needs, your job is already done. Fake expenses don't help.
After a long time spent on various dramas related to this initial problem, the show addresses it by having Marty found a casino, which seems plausible.
As I understand the show, they were buying overpriced things from cartel-owned enterprises, and that step was getting the money laundered to the client.
It is specifically mentioned that Marty books expenses that he hasn't actually incurred, notionally buying things that he never receives, which will stand up to an audit much more poorly than "buying overpriced things from cartel-owned enterprises" would.
The difference between $YYY and $Y is money that was claimed to change hands, but never did, and the difference between XXX and X is carpeting that Marty has recorded himself purchasing, but not actually purchased.
If he was buying the carpeting from a cartel-owned supplier, he'd just pay the inflated prices that he's so proud of booking without paying. Instead, he's buying real services from a real third party, and then booking fake expenses for unclear reasons.
I doubt the person you're replying to thinks not a single person in the world pays cash at the grocery store, but I think it's reasonable to think that a lot of people do use credit cards at the grocery store (for points/rewards OR for actual credit; not to mention the convenience of not needing to have the cash on hand).
Enough of those "one in a thousand" cases are going to be legitimate people with oddball reasons to do what they do, and the minority of those who shoot back will still be enough that you'll get your guys killed faster than you find real headline grabbing criminals. Sure you'll roll up a bunch of petty dealers (these will be most of the people who shoot back) and you'll slander all the innocents but this sort of big dick of the law dragnet based stuff isn't an effective use of resources. It makes two people hate you for every useful idiot it makes respect you.
Reminding everyone that none of this is voluntary and it all hinges on violence is highly counterproductive generally. If the goal is to get everyone to goose step in line and pay their taxes doing positive things to legitimize the government is a far better use of resources. Build a bridge or renovate a port or something.
There are a million ways to convert it to crypto, and a million ways to convert crypto to many of the other things one might want to use: gift cards, airline miles, etc.
Same goes for gold. There are lots of shops in many countries that will buy gold for cash. Many countries still have hotels that accept cash.
You can pay for a surprising amount of things in cash. One friend of mine simply has a rich buddy buy his cars and insurance, and he gives him paper cash each year for the sum of payments+insurance.
Many landlords are happy to accept cash, especially if you are willing to pay a year in advance.
Why do you think someone with that much money would be driving a car that's titled and plated in their own name?
The feds cracked down on it earlier this year leading up to the election, but it's back.
All you need to do is make sure you have an actual phone number that someone can call to rent a car, and make sure your prices are outrageous. Give the job of answering the phone to your sister's kid, or your girlfriend.
> "Part of the money Sánchez Gil amassed in recent years was laundered through the purchase of crypto-currencies and a large fleet of private hire vehicles registered in the name of one of his relatives"
You could also open a front, say a barbershop or a restaurant, though convincing authorities you earned a million or more through that could be a stretch.
Wouldn’t recommend it to GP though because they asked about circumventing AML and this would catch the fraud chief from the article.
You'll probably never get through 20M like this but you should have plenty of fun.
I could live my whole life with cash easily if I rented instead of owned.
It's easy. Never dealt with €20M but the principle is scaleable, you smurf the money in ~€10k amounts through a network of trusted money mules. You buy a cash-only/mostly business like a car wash, take-away etc., rent half-a dozen shops and pump the cash through those, banks won't usually complain about cash coming in like this. €5k * 52 * {y stores}. There are entire areas of shops in some cities where no-one goes in but the business has a healthy turnover.
There are lots of other methods too but those are trade secrets. "I could tell you but" etc. Easy 'big bang' methods like houses Rolls-Royces and art no longer work easily in most jurisdictions (oddly, apparently still in Oz from other comments). I miss the days when you could walk ito a bank with a shopping bag full of bundles of notes, I've done that - fun.
Few people bother to pickup loose change anymore.
What's the long-term plan here? Perhaps it's to add maximum physical friction to moving larger amounts of fiat than you can spend in a single visit to Costco on a food run for your family of of 4.
:)
Apparently 25% of them were in circulation in Spain, despite the Spanish economy being only a fraction of the eurozone.
Most shops won't take them and cash machines don't give them out.
Which is pretty odd now given how high inflation got here for the last few years.
Here's an article from 5 years ago saying that £50 notes were widely regarded as just used by criminals.
My favorite head scratcher is the US penny. It would be so much easier on all involved if we rounded so everything was MOD5 friendly, and just eliminated the penny.
What is wrong with us?
I live in the Netherlands and you can really live 100% cash-free here. A lot of places are card-only, even.
New York and some other cities actually made it illegal, as it's discriminatory.
Refusing to take part in the banking system is not worth penalizing businesses for. Let the free market work.
The problem you cite is not solved by requiring businesses to accept cash—it is solved by removing the homeless schizophrenic from the depravity of the street.
1- you are on the secret unaccountable banking blacklist
2- you lack proper identity documentation
3- you are a fugitive from justice
Without a bank account, you can't get a payment card, and, in a cashless world, you can't buy food.
You don’t want those people to not be able to buy food, or the next time you go and buy vegetables or fruits or chicken breast with your own shiny metal bank card, you might find yourself paying 5x the cost.
There is a secret blacklist shared among the banks that cause them to deny or automatically close accounts held by certain people. They are not required to service anyone.
Do you not see the dangerous failure modes of allowing private companies to point and click cause someone to become persona non grata without due process? They also happily do so at the request of the state, again with no requirement of criminal wrongdoing or burden of proof, and no due process.
The Visa/Mastercard cartel has too much power.
And of course cashless makes it hell on those without bank accounts, like the homeless and immigrants, those who rely on informal employment, and the general outskirts of society. There are prepaid cards, but they require ID checks and often fees which they can hardly afford. That will make many rely on informal banking from loan-shark types.
And last, the banks see everything. I worked for a bank. I definitely don't want those people to have all the data that matters on everyone.
CHF 1000 is worth less than it ever was so the whole claim about it being used for crime is bullshit. People keep cash at home and safety deposit boxes. When we had negative interest rates it made sense to keep some money in cash.
A bigger debate that is coming is the elimination of the 5 rappen coin. The 1 rappen coin was killed a long time ago and the golden colored 5 may soon also go.
€1.2million in a briefcase? No problem. 3kg of beef? Serious business.
CHF1000 notes would obviously be very convenient for moving large amounts of cash. If you are the sort of person trying to avoid the tax man's 20-40% taxation or the police's 100% taxation, why care about the CHF exchange rate?
How about "enshittifiers"?
https://en.m.wikipedia.org/wiki/Greek_government-debt_crisis
Not being tech savvy or not wanting to rely on volatile cryptocurrencies are also legitimate explanations for staying all cash. And he may very well have a few crypto wallets too.
Essentially crypto can be untraceable like cash or gold, it can be traded off the books, until you ‘launder’ it into someone’s name.
"Part of the money Sánchez Gil amassed in recent years was laundered through the purchase of crypto-currencies and a large fleet of private hire vehicles registered in the name of one of his relatives"
Seems like every single IT job is littered with personality tests these days but what about government?