People often ask me about money laundering. It’s not that complex.
First, sell drugs in America. Receive cash. How do you get those millions of filthy USD cash bills into the banking system so that you can actually use it all?
Give the cash bills to a Mainland Chinese gangster (Gangster A) in the U.S. He receives the cash, puts it in a safe, takes a cut, and now has two further acts.
Immediately, Sinaloa wants its money. So Gangster A tells his friend/ cousin in Mainland China via WeChat (encoded chatting app) (typing in simplified Chinese, or leaving voice messages in Mandarin) to buy $X amount of BTC. Mr. Associate in Mainland China uses RMB to buy BTC. (Mainland Chinese regulators only care about staying in power, not about monitoring suspicious transactions. Mr. Associate uses a strong VPN to bypass Mainland regulators, to access the Dark Web, anyway.) Mr. Associate transfers BTC to Sinaloa’s BTC account, probably on some coin trading app like Coinbase or Binance. Such transactions are not monitored, and even if they were, as long as obeisance and deference (and a pay off) are paid to the CCP, it would never trade one of its own (even if criminal) to U.S. authorities. Sinaloa then exchanges his BTC and deposits it into his BBVA México account, which has been opened for many years now, probably multiple business accounts for “input goods” or something. Sinaloa has now gotten its money. It can now exchange it into MXN to pay its staff, or, more likely, use part of the original BTC to buy precursor ingredients for more drugs from Mainland Chinese chemical companies, and have them container shipped to his drug factory in Sinaloa State.
There, the money laundering is complete. Illicit gains have re-entered the legitimate banking system through the use of WeChat, BTC, and regulators who do not monitor Coinbase or Binance.
However, now there’s a second line of business for Gangster A. What should Gangster A do with all that cash? Well, Gangster A can now sell access to his USD to Mainlanders who want to get their money out of the Mainland.
Corrupt CCP Official B wants to get, say, USD $1’000’000 out of RMB to buy property in Los Angeles where his kid goes to school. So he moves $1’000’000 + a fee in RMB to Gangster A’s already-existing Mainland bank account. This is a domestic transaction, RMB to RMB, not very suspicious. Then Corrupt CCP Official B flies into LAX, goes to Gangster A in-person, and receives $1’000’000 in cash USD, minus the fee; or, more likely, he receives a structured series of small transactions from ethnic Chinese-owned businesses in LA for “services rendered” into his already-existing Bank of America USD account. All BofA has to do is to sign off on a “know your client” form when the account was opened — possibly opened years ago when Corrupt CCP Official B was a grad student in the U.S. — with periodic fig leaf reviews to appease regulators. Indeed, Corrupt CCP Official B might have a Green Card or legal rights to residency in the U.S., too, depending on his own father’s occupation. If the structured series of small transactions from ethnic Chinese-owned businesses in LA for “services rendered” is properly structured, over time and in modest amounts, it will not raise any red flag at BofA. Now Corrupt CCP Official B can buy real estate in LA where his kid goes to school.
Et voilà!
Note: through all of this process, no banking transaction ever went across a national boundary. All transactions were domestic. Domestic transactions have less monitoring, are less suspicious.
tl/dr: if you have a BTC transaction in your transaction history, I will not sign off on your account. That’s above my pay grade. I don’t get paid enough to handle such risk. I will run it up the flag pole for my boss to sign off, or not to sign off, on.
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