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Chapter 36 - How to Launder Money

The repercussions of eliminating the Salamanca family were far more significant than Sean had anticipated. The individuals in Jersey City who harbored animosity toward Sean had seemingly given up. They had ample reasons to resent him; many had lost loved ones at his hands, and the new boss—while perhaps not personally invested in hatred—felt compelled to maintain appearances.

A key factor in the dynamics was Sean's demand that each of them pay $100,000 to settle past betrayals. This hefty sum deterred everyone, including newcomers, from complying. However, the shifting circumstances compelled someone to reach out to Sean the following day to send the money.

On October 14th, Saul received an urgent call from Sean. Upon entering the room, Saul was taken aback by the sight of stacks of cash piled high on the bed. He had never encountered so much money before, and for a moment, he stood there in disbelief, processing the reality that he could become a billionaire if everyone simply contributed a dollar.

"Saul, I need your help," Sean said urgently. "The regulations from the American financial review are too stringent. Any deposit over $10,000 gets reported to the IRS. Just look what happened to Yingda—he was arrested for money laundering."

"I want to start a company, but I'm terrified of the IRS. I need to convert this cash into legal money," Sean continued, gesturing to the mountain of dollar bills and then to his pocket.

"Cash?" Saul shook his head in disbelief. "Sean, I'm a lawyer. I can't just play games like those sharks on Wall Street."

"Come on, Saul," Sean pressed. "You're resourceful and knowledgeable. I don't want to involve Wall Street types or expose my plans to anyone else. You know the law inside and out; you can navigate the loopholes better than anyone."

Dismayed, Saul paced the room, occasionally inhaling the scent of the money. "To launder money, you first have to understand what it is," he began.

"The earliest money launderers were your fellow Polish Jews, particularly the criminal genius Meyer Lansky, a founder of the American Mafia. He was instrumental in building a gambling empire from Saratoga to Miami and even Las Vegas, and he had significant influence in Cuba, famously asserting, 'We are stronger than American steel.' Lansky passed away three years ago, but his legacy lives on; the film Once Upon a Time in America, released in February this year, was based on his life.

"Lansky initiated money-laundering activities in the 1930s and later engaged in financial crimes on Wall Street. He was such a master that by the mid-1970s, authorities expressed despair over their inability to monitor him. Until his death, he remained untouchable.

"So, what exactly is money laundering? It refers to the act of concealing and disguising the proceeds of criminal activities. Based on Lansky's methods, we can break down money laundering into three key steps: Disposition, Segregation, and Incorporation.

Disposition: This involves mixing criminal proceeds with legitimate funds. Segregation: This step conceals the source and true ownership of the criminal funds. Incorporation: This final phase transfers the laundered money into accounts of legitimate entities with no apparent ties to crime.

There are five main methods currently used for money laundering.

Currency Smuggling: This involves sending cash abroad through smuggling routes to countries like the Cayman Islands or Switzerland, where financial regulations are less stringent. However, Sean dismissed this, noting that remitting large sums from overseas would raise red flags.

Currency Exchange: Here, launderers use the black market to exchange illicit funds for foreign currencies. Again, Sean found this method unappealing, as it bore similarities to the first.

Investing: Purchasing real estate, securities, or insurance and using returns or insurance payouts to cloak the illicit funds as legitimate. However, Sean felt this approach wouldn't meet his needs.

As Saul continued brainstorming, the challenge of laundering money began to take shape. The stakes were high, and the path ahead was fraught with risks and complexities.

Fourth, one common method for laundering money involves using market intermediaries like consulting firms, financial companies, and law firms. These businesses typically do not engage in direct buying and selling of goods; instead, they operate through fees for consulting services and agency representation, making it easier to transfer funds without raising suspicion.

"Don't give me that look," Sean said, anticipating Saul's skepticism. "Yes, it's exactly what you're thinking. Firms that lobby, consult, or operate in the revolving doors of Washington or other capitals often provide legal services to government officials and some congressmen. While not illegal, this route isn't suitable for you since you lack the necessary lobbying power."

"Why not? I convinced a lot of people yesterday!" Sean replied with a smirk. "They accepted my suggestions without question. I could really set up a consulting company; it's a solid idea."

Saul rolled his eyes. "Pointing a gun at someone isn't lobbying, Sean. That's just a threat—a blatant crime."

Sean shrugged. "It's not a threat if no one talks about it, right? And it's practical!"

Still unsatisfied with the four methods discussed, Saul reluctantly mentioned a fifth—although it was the most basic: starting a legitimate business. "You're going to accumulate more and more illicit money in the future, so I suggest you consider establishing some companies."

Sean frowned, clearly unfamiliar with the concept. Even in his previous life, he had never dealt with money laundering. "How do I even go about that?" he asked, uncertainty creeping into his voice.