Modus Operandi by Mauro Corvasce (universal ebook reader txt) 📕

Some of the most important money laundering cases in New York involved these industries. The success of prosecutions involving hundreds of millions of dollars appears to have made a serious dent in the operations of these organizations. However, there is general agreement that outside of the financial industries the jewelry and precious metal industries continue to be the highest risk business for money laundering in New York and other states.

Retail Industry. An industry that is increasingly vulnerable to use by money launderers is the retail industry, specifically, high-dollar luxury stores that attract clients who have large sums of money. These clients have to launder or otherwise spend the money without attracting the attention of authorities, so they either make the purchases with cash or they enlist criminal associates or otherwise law-abiding citizens to make purchases. Retailers seduced by large cash payments, cash that they suspect came from illegal activity, feel that they have done nothing wrong or committed no crime when they accept this money. They fail to realize however, that the Money Laundering Control Act of 1986 expanded the definition of money laundering to make it illegal for people to accept cash knowing that it comes from illegal activities, especially if the deal itself is intended to hide the source of the money.

There sometimes exists an unholy alliance between certain businesses and drug dealers that fuels the fire of drug trafficking. Some business strapped for cash are enticed by the opportunity for easy money, even if the cash has a dubious history. In some communities drug dealing is a career that people start while in their teens and childhood friendships between street kids often later turn into tempting situations for both the drug dealer and the legitimate retailer.

For the purposes of this discussion let's give a fictitious example of how an expensive clothing store, John's Clothing Boutique, in New York City might be used by money launderers.

John's is incorporated as J & A Inc., with two partners: John Linn and Adam Kurrocka. They deal primarily in imported Italian suits and shoes priced from $1,000 to $2,000. In reality Linn was selling thousands of dollars worth of clothes to the Raymond Edwards drug gang and to drug king pin Don Lewis through his New York Store. The narcotics traffickers purchased the expensive clothes with small bills and spent as much as $41,000 in a single day.

Linn began as a legitimate retailer, but the store was frequented by a childhood friend who had become one of New York City's biggest drug dealers. Linn eventually assisted the drug dealer in disposing of his illicit cash by selling him as much as $32,000 in clothes in one month, by purchasing luxury automobiles for the drug dealer registered in John's name, and by listing the criminal as an employee of the store. At the height of this partnership, the drug dealer and his associates spent as much as $457,995 at the store, and Linn registered, in his own name, six luxury cars, costing $234,371. All of this from a store that reported a total income of $85,600 during 1987 and 1988.

While Kurrocka, a master tailor from Turkey, escaped prosecution, Linn was recently convicted on thirty-four of sixty-seven counts of money laundering.

Convenience stores, liquor stores, restaurants and similar businesses are attractive to money launderers and provide an excellent legitimate cover. Since these are commonly cash heavy concerns, licit and illicit funds are easily co-mingled. Some drawbacks are that it requires the maintenance of a legitimate business, leaves an audit trail, filings have to be made with the state, county, and city and normal business records must be kept. And, there are limits to the amount of money that can be channeled through without attracting too much attention.

So how do these criminals operate? Someone with criminal intent has the option of either establishing a new business or purchasing an existing one. Money launderers will often seek out businesses under financial stress due to changing economic conditions. The purchase of an existing business is an advantage because the business pattern is already established and, as long as the business's cash flow does not dramatically shift, changes would not appear unusual. In any event the person attempting to use the business as a front for money laundering would tailor his activity to ensure that the business fits the norm and avoids attracting attention.

We cannot specifically state that a particular group or groups could be singled out for money laundering activities, and it could be that any ethnic group in an illegal activity could be involved. For example, Russian criminal groups are involved in gasoline tax and merchandise fraud as well as narcotics; Italian organized crime is involved in a myriad of criminal enterprises; Asian organized crime groups are involved in gambling and narcotics; and the criminal elements of the Dominican community are involved in narcotics. The Chinese as an ethnic group are not heavily involved in the drug trade, however, one Chinese group holds over 3,200 companies that have earned more than $1.3 billion yearly for the past seven years.

Money Orders

One way to launder money is to transfer currency into money orders. Money orders can be purchased from many different locations, not just banks — retail stores, pharmacies and post offices are just a few. Money orders can be made payable to anyone at any location worldwide. One can even list fictitious persons and addresses on these money

orders, and have them cashed with little or no problem.

Narcotics dealers use the money orders mainly to reduce the volume of small denomination currency they receive in selling their wares. When a narcotics dealer sells his drugs on the street, most purchases are twenty dollars or less, which results in large piles of small bills. Drug dealers must relieve themselves of this currency and will do so by purchasing money orders.

If you have $1 million, all in twenties, you have fifty thousand twenty-dollar bills, a large bundle of money. By purchasing one thousand $1,000 money orders, you still have your million