The LLC Money Laundering Shell Company Game

[MineralMan]

Step right up to the table, Sport! You look like a winner. Smart, too, I bet!

Let me show you how it works. See these three shell companies? Now watch. I'm going to put a million dollars under this shell. Keep your eye on the shell company where the money is as I move the shells around. When I stop, you point at the one with the money. If you're right, the money's yours. If you're wrong, you pay me $100,000. Win a million or pay $100,000.

How can you lose? There are only three shell companies. All you have to do is watch carefully and keep track of the one with the cash. It's easy! It's not a trick. I guarantee that if you point at the shell company that's hiding the money, it's yours. You're risking only 10% of your sure winnings, see.

Ready? Keep your eye on that shell company. Watch carefully as I move the shells around....don't take your eyes off the winner!

Now! Which shell covers the money? Point at it!

Oops, not that one. See, it's under this one. Now, hand over the $100,000. Bad luck!

Try again? There's still a million bucks to win. You won't make the same mistake twice, right?

Ready?....

[SWBTATTReg]

1. I've alway wondered why RUMP had so many LLCs/businesses and so forth (as well ...

as Cohen) for I had a couple of companies and felt that it was too much w/ the just the two companies. When these guys had literally hundreds? And why? What is the sole purpose of doing this? I can understand perhaps a different company in each state, or perhaps a different company for each category of products and so forth.

The sheer number of LLCs/businesses (to me) seem designed for only 1 purpose, to hide something, either income not reported or something worse, e.g. drug money etc.

Nice write-up on explaining what all of these LLCs / businesses are out there for. Perhaps the IRS and Mueller will dissect through the mess of companies...I know that they done this before in Mafia cases and the like.

[MosheFeingold]

2. It's pretty normal in RE

Each building has different investors and a different promote. Each deal gets its own LLC.

This can be nefarious or it can be just business.

They are just tools. They can be used for good or bad, like any other tool.

[SWBTATTReg]

4. Refresh my memory pls. RE stands for ??? nt

[urbanhermit]

5. Real Estate n/t

[SWBTATTReg]

6. Thanks! nt

[MineralMan]

3. Yup. It takes some serious forensic accounting to track

money that is shuttled around a bunch of shell companies. Money comes in to one bearing a label from its source. Once it's in the shell company's bank account, that label starts fading. So, you move parts of it over to other shell companies using different labels. You keep doing that a few times, and the original label disappears completely. After a few transfers, it can be impossible to tell where the money came from in the first place, and you can no longer connect the source with its destination without a lot of work.

That's what forensic accountants do. They discover those connections. It's not easy, and sometimes it's impossible, like when some of the shell companies are offshore in countries that don't have strong disclosure laws on banks.

That's what's happening here.

[Calista241]

7. My impression isn't that he was trying to hide the money, it's that he was trying to avoid taxes.

If AT&T and Novartis paid him directly, he would have had to pay regular income tax.

If they paid the company he started which "markets his services", it only has to pay corporate tax rates, which are much less than individual tax rates.

Most people that have companies that do this will then have the company buy assets, like their house, or whatever. They can also pay the 'owner or owners' a salary, which the owner will then pay taxes on.

It's typical estate planning.

[MineralMan]

8. Doubtful. I'm almost certain he was laundering money

to hide the fact that it was being used illegally. Bribes are still illegal, I understand. So are pay to play schemes.

[dalton99a]

9. A laundromat depends on rotational motion

[MineralMan]

10. Ah, the spinning cycle.

Yes, indeed.

[B2G]

11. Banks have highly trained professionals

whose sole purpose is to unravel these things. Most are retired FBI and LE professionals.

If Meuller has been investigating Cohen's finances since last year, as reported, he already knows exactly where those payments went.

[MineralMan]

12. Mueller has a team of forensic accountants.

They'll suss out all that stuff. Banks mostly want to have your money on deposit to support their loan activities. They're less interested in where it came from or how you're disbursing it. They have to report movements of funds that meet certain criteria, but they're not really about snooping into your business expenditures and income sources. That's not their problem, really.

[B2G]

13. That could not be further from the truth. nt

[MineralMan]

14. Banks, themselves, get involved in some pretty shady dealing.

I'm waiting to see how much I'm going to get from the settlement over the creation of accounts I was not aware of by my bank. You may have heard about what Wells Fargo got up to there.

Banks are not always working on their clients' behalf, you know? Banks all too often do stuff that is unethical or even downright illegal.