Saul began explaining to Sean how to establish a business as a method of laundering money. This traditional approach involves setting up a legitimate company, mixing illicit funds with legitimate business income, and paying taxes on it. The main advantage of this method is that the taxes are paid using "black money." As long as taxes are paid, the IRS won't scrutinize the source of the funds. They don't care where the money comes from; they only care about their share. The effectiveness of this method depends on the strength of your fake accounts and the accounting firm you choose, especially if the amounts are small.
This technique was pioneered by Mr. Meyer Lansky, who learned from the downfall of Al Capone, the infamous Chicago mobster, who was imprisoned for tax evasion. Capone, a notorious gangster, was caught not by police, but by the IRS. As Saul chuckled, he remarked, "Death and taxes are inevitable!"
Using Lansky as an example, he opened pizza chains and other food establishments across the United States, using this network to distribute drugs while laundering a portion of the money. However, the laundered amounts weren't particularly large, and most of the money was smuggled to Bermuda before being transferred to Switzerland or Italy. Other methods of laundering, such as currency exchange and investments in stocks and securities, were also common.
Lansky wasn't just a mobster; he was a financial expert. Almost all modern money laundering techniques were developed by him, and future generations have continued to refine them.
Sean laughed heartily, patting Saul on the shoulder. "Look, I'm just saying you shouldn't pretend to be someone you're not! It's clear from your admiration for a mafia kingpin!" He added with a grin, "But I must admit, Lansky was brilliant!"
"Now, let's figure out what type of physical store would suit me," Sean pondered, stroking his chin. "I don't mind paying taxes to the IRS, but I want to explore reasonable tax avoidance strategies."
"For tax avoidance, you'll need to find a reliable accounting firm," Saul replied with a shrug. "I can't advise you on that."
Sean scoffed, "What good are you then?"
Saul raised an eyebrow, "You really should be ashamed of yourself! Capitalists can't be as heartless as you!"
Despite Saul's stern tone, Sean burst out laughing. Saul's detailed analysis of money laundering had opened Sean's eyes to new possibilities. The intersection of physical retail and money laundering was indeed a potent combination.
Consider pizzerias, bakeries, or fried chicken joints—they typically handle small cash transactions. As long as taxes are paid, they won't attract IRS scrutiny, and law enforcement agencies like the FBI have little chance of tracing the myriad small cash flows. After all, there's no rule stating that you must eat what you buy.
Sean rubbed his chin thoughtfully, considering how this concept could expand into other service and entertainment industries. Bars run by gangs, for instance, may appear licensed but often serve as fronts for money laundering. Law enforcement has limited authority to investigate the origins of funds in locations like the Cayman Islands, Switzerland, Seychelles, and Bermuda. Is it illegal? The answer is often murky.
Even laundromats can be replaced by other businesses, such as gyms, yoga studios, beauty salons, and cleaning services. Moreover, a brokerage firm can serve as an excellent vehicle for laundering money. Contracts for artists can be constructed arbitrarily, and the value of promotional resources is often subjective.
Sean elaborated on his ideas, describing how an overseas scammer could invest in a film, with the brokerage handling production and distribution. Ultimately, whether the film succeeds or fails is irrelevant; the brokerage collects its fees and pays artists, directors, and staff according to the contracts, regardless of the outcome.
Saul was left speechless by Sean's revelations. After a moment, he pointed at Sean and exclaimed, "You're a natural-born criminal! All the elements of crime flow through your veins. What more can I say? Lansky has found a successor!"
"Shut up! I'm conducting serious business here!" Sean shot back, glaring at Saul. "Seriously, how is this a crime? Investment failures are just that—failures. Who says investments are guaranteed to make money?"
"Hollywood produces thousands of films each year. Only a few make a profit; losses are the norm!"
"Exactly! This is a massive opportunity!" Sean declared, raising his hands triumphantly. "I'm a genius!"
Saul rolled his eyes, muttering under his breath, "Genius? Are you sure you're not just a criminal genius?"
"Have you figured out what kind of business you want?" Saul asked.
"I'm leaning toward a pizza shop or something similar. I don't want to deal with drugs, so a gym might be a better option. It'll generate income faster!" Sean snapped his fingers. "And it could even be a designated gym for police officers!"
Saul raised an eyebrow. "But remember, your current legal income is only about $20,000, all from the Rockefeller family trust fund. Are you sure you can afford to open a gym?"
"Who says it has to cost a lot to start a business?" Sean replied, looking at Saul as if he were missing the point.
Saul shook his head in disbelief. "Alright, let me see how you plan to open a large fitness club with just $20,000."
"Listen, no guns allowed! Everything has to be above board!" Sean insisted, a mischievous glint in his eyes. "I'll keep everything legal and watch my back!"
Saul chuckled, recognizing the absurdity of their conversation. "You may think you're clever, but running a legitimate business while laundering money is a tightrope walk. You need to be cautious."
Sean waved his hand dismissively. "I get that, but think about it. The gym can be a hub for community activities. If I partner with local police, it could even bolster my reputation. Plus, there are plenty of ways to bring in cash without drawing attention."
Saul leaned back, considering Sean's words. "You really believe you can pull this off?"
"Absolutely! I'll create a membership model that attracts people, while also implementing services like personal training and classes. The cash flow will be steady." Sean's excitement was palpable as he outlined his vision.
"Just remember, you can't get too greedy. Keep your operations under the radar and play by the rules as much as possible," Saul advised.
Sean nodded, already envisioning the layout of his future gym. "I'll keep it moderate and build up from there. And I'll make sure my accounting is tight—no room for mistakes."
Saul smiled, slightly impressed. "You've got a plan, then. Just be careful, alright? The world of crime is unforgiving, and one slip-up can send you spiraling."
Sean grinned confidently. "Don't worry about me. I'm ready to make my mark. Just remind me to keep my eyes open and stay ahead of the game."
As the two continued their discussion, the lines between ambition and illegality blurred, but Sean was determined to carve out a path that was uniquely his—one that balanced the precarious dance of business and the allure of the underworld. The future was uncertain, but the possibilities were endless.