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Thread: Money laundering, 101

  1. #1
    I've long been intrigued with the way people "launder" their ill gotten gains, and am aware casinos are often used for this purpose.

    What things do people do to launder money in casinos, and what countermeasures are in place to help prevent it?
    What, Me Worry?

  2. #2
    When the APs reveal their secrets, I'll tell you about this.

    In fact, it was an element in a screenplay I authored several years ago.

  3. #3
    Originally Posted by Alan Mendelson View Post
    When the APs reveal their secrets, I'll tell you about this.

    In fact, it was an element in a screenplay I authored several years ago.

    Was the title "I pay lease on an office I never visit?"

  4. #4
    No the title was "Con Gals"

    It's registered with the Writers Guild

  5. #5
    Originally Posted by MisterV View Post
    I've long been intrigued with the way people "launder" their ill gotten gains, and am aware casinos are often used for this purpose.

    What things do people do to launder money in casinos, and what countermeasures are in place to help prevent it?
    Just like any other business that deals with a lot of cash money. Over report your profits and/or under report your losses. I don't know nor care much about money laundering, but I'd imagine it'd be pretty easy to play a VP game with lots of taxables, then write off X amount of "losses", then the rest is 'clean' money. IE: Hit for $1M in taxables, write off $700k losses, claim $300k income.

    Or you could be a professional "card counter" and decrease all your losing sessions by a few hundred and increase all your winning sessions by a few hundred.


    Granted, it also depends how much you'd want to try to launder. Less than a million in a year, I think would certainly be doable. Trying to do something like $10M in a year, that's going to be pretty tough, I think.

    For this, as far as I know, there are no counter measures, since really, there's nothing the casino can do about what you choose to report on your taxes.


    Supposedly, people buy in for large amounts, play a little bit, then cash out, trying to claim it all as winnings. IMO, this is a pretty stupid way to do it. Oh sure, while you're at it, just put a big life insurance policy on your wife and once it gets accepted by the insurance company or whatever, your wife will suddenly die....that's not going to raise any eyebrows.

  6. #6
    Poker is often used to launder money.

    A few card rooms in LA have been busted for this recently, including the Bicycle Club.

    Basically the launderers play a fake poker game against an accomplice heads up "opponent". The accomplice is the one who shows up with the dirty money (supplied by the launderer), and then the accomplice "loses" that money to the launderer, who then declares it as high stakes gambling winnings.
    Check out my poker forum, and weekly internet radio show at http://pokerfraudalert.com

  7. #7
    Dan mentioned one way. There is another way done on a regular routine basis that even slips under the $10k reporting requirements. I'm surprised this isn't commonly known among teams and APs because it's so simple and no one even notices. I've seen it done numerous times.

  8. #8

  9. #9
    CBC News Posted: May 20, 2008

    Casino loophole lets criminals launder cash, RCMP fear

    An RCMP probe into a southern Ontario drug trafficking ring has exposed a loophole in the province's casino system that police fear criminals are exploiting in a bid to launder the proceeds of crime.

    Called Project Ozzi, the 2004 RCMP investigation broke up a drug trafficking ring involving cocaine and ecstasy in the Toronto and Kitchener areas.

    RELATED STORY: CBC News goes inside two Ontario casinos to test how easy it is to launder money and to see who is watching.

    RCMP investigator Cpl. Joe Peel says suspects linked to the ring were frequent players at Casino Rama, outside of Orillia, Ont., and Mohawk Racetrack, west of Toronto. They would play as much as twice a day, often depositing $9,000 into the slot machines each time, said Peel.

    "They would go in, under the threshold of $10,000, play various machines and then, at some point, cash out, get the little stubs from the machines … and then ask for a cheque," said Peel, who is with the force's proceeds of crime section.

    Peel said the players were careful to make sure most transactions fell below $10,000 — the amount that's supposed to set off alarm bells among casino staff. Under provincial and federal laws, casinos are required to report cash transactions of $10,000 or higher to the federal agency that monitors suspicious movement of money — the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

    Peel said members of the organization would then deposit the official casino cheques into bank accounts.

    "They were trying to legitimize … trying to clean or cleanse the money … is the best way to put it," said Peel. "[Take] the dirty money from the drugs, [gamble it] through the casino … get a cheque and then put it in a bank account. That was the process."

    "The process of laundering the money doesn't always rely on winning. It can be just playing it and then checking out. Actually getting a cheque from that institution," he said.

    Plea deal with ringleader

    Peel said he suspected an apparent casino connection after a 2005 bail hearing for Lenard Ro, the man later convicted of leading the Toronto-Kitchener drug ring. At the hearing, Ro's mother told the court much of her family's cash came from casino winnings — more than $100,000 for one month alone. She brought along casino receipts as proof, telling the court she was a very successful gambler.

    Peel said after learning of that testimony, he was struck by how simple it would be to launder money through slot machines.

    "It seemed too easy, to launder money through the casino. Really, it bothered me at that point, how easy it was," said Peel. He said he suspected people linked to Ro's organization had funnelled anywhere from $3 million to $5 million through casinos to get the official cheques.

    In an e-mail to CBC News, Ontario Lottery and Gaming Corporation (OLG) said their transaction records show the amount of money issued by casino cheque to people linked to Ro's organization is "far lower" than the RCMP estimation of $3 million to $5 million. The e-mail arrived late Friday, even though the organization has been aware of the story for several weeks.

    RCMP later charged Ro's mother, brother and father with money laundering, but the charges were dropped against the three family members when Ro struck a plea bargain and pleaded guilty to masterminding a drug and money laundering operation.

    The CBC tried to reach Ro but his lawyer did not return phone calls. Messages left for his mother were not returned.

    OLG told the CBC that Ro's mother appeared to be a good customer and didn't fit the profile of money launderer.

    RCMP warned to back off

    Peel said when he approached OLG about possible money laundering at casinos, the organization's vice-president of security, Mike Sharland, told him to back off. Peel said he was shocked by Sharland's response.

    In 2007, Sharland was the subject of a separate Toronto police investigation into allegations of obstruction into a criminal investigation at OLG concerning an Ontario man who was duped out of his winning lottery ticket. Police found no evidence to indicate Sharland interfered with the criminal probe, but did conclude the secondment of a senior OPP officer to OLG "did create a conflict of interest." Shortly after the report was issued, the OPP decided to stop seconding its officers to head security at OLG. Sharland retired from the OPP last March, and from OLG four months later.

    "I didn't record our conversation, but basically, [I] was told to look somewhere else and get off his turf, that sort of thing," said Peel. "I didn't get very good vibes from him. Let's put it that way."

    Sharland, who was also pulling double duty as a serving OPP chief superintendent during the time he worked as the head of OLG's security, told CBC News he couldn't recall the conversation.

    "All the time that I was either at the AGCO [Alcohol and Gaming Commission of Ontario] or OLG, we always co-operated fully with any outside police agencies," he said.

    Peel says he doesn't know the extent of money laundering in the province's casinos, but says the loophole shows the potential for greater problems.

    "I would hope it was an isolated incident. I doubt it. I'm sure many other criminals out there know as much as Lenard Ro and are doing the same thing," said Peel.

  10. #10
    Originally Posted by Dan Druff View Post
    Poker is often used to launder money.

    A few card rooms in LA have been busted for this recently, including the Bicycle Club.

    Basically the launderers play a fake poker game against an accomplice heads up "opponent". The accomplice is the one who shows up with the dirty money (supplied by the launderer), and then the accomplice "loses" that money to the launderer, who then declares it as high stakes gambling winnings.
    Yes, but what's supposed to be happening is that the casino should be keeping track of the the buy ins even as little as 3k. If the casinos are doing what they should be doing, questions might come up as to where the accomplice got his money. If there's a pattern of this happening often, there could be problems.

    I don't even know why they need to even show up and lose to the rake(perhaps they feel it seems more legit?). One can just claim they won big in a poker game from multiple unknown people.

    Someone can just claim multiple table game and even smaller slot wins over a period of time. I guess that wouldn't help much if someone needed to show a big win immediately so they could buy something big(like a house or expensive car) before they lost the deal or they just don't want to wait to spend their money. If thats the case, they could just foce a bunch of W2G's and lose the vig, round robin parlay tickets and show the winning ticket.

  11. #11
    Originally Posted by dannyj View Post
    Fill us in Alan.
    Hint: after buying chips in a casino, no one says you have to make a bet.

  12. #12
    I've seen some odd behavior on HL slots a couple of times that I assumed was money laundering at various locals.

    Usually at odd times when the HL room was mostly empty. Individual comes in, sits at one machine, and spins and spins with no players card at max bet feeding in hundred after hundred. Finally wins a small handpay, takes a check (even though the amount is way less than what they've seemingly pumped into the machine), then leaves.

  13. #13
    pkspins here's how it works in high limit slots:

    money launderer sits at a machine and feeds in hundreds and hundreds and hundreds.... and then hits the cash out button. Goes to the cage and gets a check for the ticket. Deposits the money in the bank. Check says " XXXX Casino." It's now laundered money.

    You can do the same thing with chips. As I said above: no one says you have to make a bet after buying chips.

    There you go. Simple. No loss. Deposit a $100,000 check in your bank and claim on your tax return that you lost $100,001. No need to claim groceries, barbecues, parties, going to dinner with your wife to discuss business.

    And if you want to skirt under the cash transaction reporting laws, have your team do it a few thousands at a time.

  14. #14
    Players who consistently win at a casino, or leave a casino with money or cheque are a blatant red flag for something. I mean, it becomes obvious as hell to even the other players. The same is true at the other end, with the revenue agencies. The segment of the population in an apparently legitimate position to do this don't gamble at casinos. At any rate, way too much casino scrutiny, and evidence if necessary.

    And what about that "look over your shoulder" bit for a few years, until you think you got away with something, despite the likelihood of ongoing investigations into the serious offences? Lol. Persons with health conditions shouldn't even think about gambling, however. At the best of times, players are at the mercy of a bunch of Neanderthal creeps who hide behind cameras and not-so-thin walls. How do you know what they are actually doing to their trouble makers? You don't. Good thing our imaginations are limited.
    Last edited by OneHitWonder; 10-19-2017 at 03:46 PM.

  15. #15
    OneHitWonder is correct that you can't keep doing this over and over again. But a team could.

    In reality, anybody laundering huge amounts of money will have a business... just like on TV and the movies.

  16. #16
    Buy an old clap trap bar then shove money in the till everyday.
    "More importantly, mickey thought 8-4 was two games over .500. Argued about it. C'mon, man. Nothing can top that for math expertise. If GWAE ever has you on again, you can be sure I'll be calling in with that gem.'Nuff said." REDIETZ

  17. #17
    One day I could/will write a book. My father was a mob attorney. This is not the first time I talked about it. When the Los Angeles Business Journal did a profile on me about ten years ago I talked about it in some detail... it's how I got my education to become a financial reporter and a consumer reporter. I learned a lot of the tricks before I was 12 years old.

    My Bar Mitzvah album looks like a collection of mobster portraits.

    The stories I have... like about the biggest Cadillac dealer in Northern New Jersey who every morning called my mother and asked her what color outfit she was wearing and then delivered a Cadillac to her to drive for the day. Then that night the car was picked up and driven off... never to be seen again and... (the rest in the movie/book).

  18. #18
    Originally Posted by Alan Mendelson View Post
    pkspins here's how it works in high limit slots:

    money launderer sits at a machine and feeds in hundreds and hundreds and hundreds.... and then hits the cash out button. Goes to the cage and gets a check for the ticket. Deposits the money in the bank. Check says " XXXX Casino." It's now laundered money.

    You can do the same thing with chips. As I said above: no one says you have to make a bet after buying chips.

    There you go. Simple. No loss. Deposit a $100,000 check in your bank and claim on your tax return that you lost $100,001. No need to claim groceries, barbecues, parties, going to dinner with your wife to discuss business.

    And if you want to skirt under the cash transaction reporting laws, have your team do it a few thousands at a time.
    How the hell is that laundering money????? I won 100k, but I lost $100,001? That's ridiculous. The reason people launder money is so they can show how they got the money and make it look legitimate, ultimately so they can put it in the bank, invest, give it away or spend it. Not so they now have to make it disappear again. You can't claim you won 100k , lost 100k and then keep the money in the bank or spend it. They will ask how the fuck you still have or can spend 100k if you lost it.
    Last edited by AxelWolf; 10-19-2017 at 11:48 PM.

  19. #19
    Originally Posted by AxelWolf View Post
    How the hell is that laundering money????? I won 100k, but I lost $100,001? That's ridiculous. The reason people launder money is so they can show how they got the money and make it look legitimate, ultimately so they can put it in the bank, invest, give it away or spend it. Not so they now have to make it disappear again. You can't claim you won 100k , lost 100k and then keep the money in the bank or spend it. They will ask how the fuck you still have or can spend 100k if you lost it.
    It's good to know that you do not have a criminal mind and do not know what money laundering is. So let me explain it to you.

    Money laundering is when you take cash from an illegal enterprise (such as selling drugs) and convert into money that came from a legitimate enterprise (such as a business or a casino).

    You take your drug money and you walk into a casino and put the drug money bills into a slot machine. Then cash out a big ticket and ask for the proceeds in a check from the casino. You then take the casino's check to the bank and they accept it from you, the casino gambler.

    If you were to show up at that same bank with a brief case filled with $5, $10, $20 bills from your low-life drug customers, and the total in the briefcase was, let's say, $50,000 the bank would have lots of questions for you.

    But, in the case of the casino check the only question is did you have a profit gambling? Your next step is to lie to the IRS and say you lost more than you cashed out. This might or might not be challenged by the IRS, but having to pay a penalty to the IRS would not be the same as having to explain all those cocaine splattered Jeffersons and Hamiltons to the DEA.

    This is what is meant by money laundering.

    Don't want to do it yourself? Give various people a 10% commission (hold) on the dirty cash you give them to do it for you in various casinos all over Nevada and California and Arizona and....

    Now you raise the question of having $100K in the bank but telling the IRS you lost one dollar more. Well, you still have $100K in the bank. By telling the IRS you lost one dollar more you don't have any tax liability on that $100K you have laundered.

    You really don't understand, do you?

  20. #20
    Originally Posted by Alan Mendelson View Post
    Now you raise the question of having $100K in the bank but telling the IRS you lost one dollar more. Well, you still have $100K in the bank. By telling the IRS you lost one dollar more you don't have any tax liability on that $100K you have laundered. You really don't understand, do you?
    But what if the IRS can tell by your tax returns or lack thereof that you should not have $100,000 in the bank?
    "More importantly, mickey thought 8-4 was two games over .500. Argued about it. C'mon, man. Nothing can top that for math expertise. If GWAE ever has you on again, you can be sure I'll be calling in with that gem.'Nuff said." REDIETZ

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