Hi Guys,
Can someone please explain to me how building a mall contributes to washing money?
I mean let's say I make $1000 from a drug deal.
I then use that $1000 to build a mall.
the mall still needs to make a profit for me to have 'washed' my money does it not?
What if the mall is not a success then I haven't exactly washed my money, as much as just 'thrown it away'..... no?
what am I missing?
Money laundering in itself is not making a profit, it is injecting illegal profits into the formal economy, giving him the aspect of legitimate money. (This is the "classical" approach. In EU countries, the laundering definition is nowmuch wider due to AML european regulations)
Basically, if you transform drug cash money into a property, you have washed your money.
Apparently, drugs cartels have so much money available they prefer to store it through concrete buildings than with cash: cash is dangerous to store, you have to guard it, it can be stolen, it can also in some cases be eaten by insects..
Thus a cartel can use a building just like a "cash warehouse"..
Given the relatively low real estate prices in the DR, on the long term, this might come out with a profit.
Then you can have a second step: use this cash warehouse to launder more cash. Typical example is to open an hotel, or a cabana. This cabana, believe it or no, will be always full.. So you have first your cash money transformed in a legitimate property, and then you use this property to wash more cash.
It is so easy to launder money in this country. Small property developments are probably one of the easiest way to do that: buy the land, find a maestro, pay him, the workers, the ferreteria, everything in cash. Then sell and get paid with drafts. That's it.
A fairly "simple" way to counter this type of laundering is to set legal limits to cash transactions: prohibit cash transactions above some threshold, and enforce the law..
But I can imagine some poster's reaction on this:
"IN THE DR...??? NEVER..... YOU MUST BE DREAMIIINNNGGGG SON!!!!!!!!!!".
I would agree 100%...
Barnab?