Imagine some one has a great deal of money obtained via
illegal channels. There is no way he or she can spend
this money without arousing suspicion.
Hence having five hundred million dollars or having five
hundred dollars is about the same when it comes to
expenditure.
Buying a brand new Benz with cash often results in the
visit of Federal Agents and the likely incarceration
of the big spender.
The usual method is called "off shore" banking, although
this suggests that the Big Spender opens a bank account.
No.
The Big Spender creates a Near Bank.
A "Near Bank" is an agency which can be anything from a
Remittance service to an Investment scheme. It is a company
whose purpose is to handle a lot of money. Such companies are
formed with the involvement of locals who are financially
solid.
Big Spender solicits and involves local people creating this
legitimate company. He will often loan the locals a portion
of the money needed to launch the operation. However, the
local people must gain loans from established financial
institutions to create a paper trail which stands up to
scrutiny.
The Near Bank will appear totally legitimate.
Whatever the stated purpose of the Near Bank, a great deal of
money will be "washed" through it.
With Investment schemes the first investors will get a
fabulous return on their money; sometimes one hundred
percent. This money comes directly from the pocket of
the Big Spender.
The Near Bank receives X million from investors. It returns
2X million claiming this profit was made via legitimate
investments, i.e. speculation on foreign exchange, stocks,
etc.
As time passes, Big Spender invests money he claimed to have
made in these legal transactions in other assets which he
can sell for profit.
Dummy companies which funnel money into the Near Bank gain
the laundered money, so that although from a pure dollars
and cents view, the Big Spender has spent five hundred
million to receive two hundred million, this is two hundred
he can spend without the slightest fear.
Currently, such businesses are being investigated by
international bodies. Laws concerning these kinds of Near
Banks are being reworked to make it more difficult for money
to be laundered so "cleanly". This will have the result in
forcing the Big Spender to move further off shore and into
other nations in which such schemes will find governmental
sanctions.
