What I meant is I've been to a restaurant which turned out to be a money laundering front but I can't seriously describe myself as a victim. In fact, the food there was cheap and delicious!
But I appreciate your clarification. To rephrase what you are saying: it falls under US jurisdiction because some US persons were victims of a crime and some of that crime money ended up being traded on BTC-e (allegedly).
Yeah my favourite pharmacy just closed - pretty sure it was a money laundering op. Huge warehouse, fully staffed, inventory from pharmacy to electronics, hardware to perishable goods (but just random retail packages). In a couple years I've never seen more than 1 other car in the 50-space parking lot. Amazing service.
And of course there's no victims in money laundering. It's a victimless crime that has the sole purpose of helping prosecutors when they aren't able to find a real crime.
And of course there's no victims in money laundering. It's a victimless crime that has the sole purpose of helping prosecutors when they aren't able to find a real crime.
While the laundry operation is victimless it often directly assists crimes that have very real crimes:
Trafficking
Drug abusers [0]
Illegal weapons trade [1]
[0]: Esp. as since it is currently illegal they suffer a lot as getting their drugs means dealing with people you normally don't want to deal with and doing stuff you rather wouldn't do.
[1]: no, I'm still pro guns. I just don't want them sold illegally.
Right. And cars manufacturers assist kidnappers and bank robbers escapes. And cell phones can be used as remote detonators. And end-to-end cryptography... no, this is an abomination, you shouldn't even think of it unless you willingly submit your private keys to the appropriate government agency for safe escrow to aid lawful investigations!
(I would have put /s here, but all these lines will be used at face value soon enough).
Money laundering is knowingly assisting criminal activities. You're actively hiding where the money comes from, exactly because you know it comes from illegal sources. (If the source were legal but embarrassing, all you'd need is standard bank privacy, not active laundering.)
The car-related analogy isn't a car manufacturer. It isn't even an anonymous, stealth rental car service (although plenty of crimes could benefit from it).
The analogy is a taxi service that advertises itself as willing and able to crash through police barricades.
Actually, no. Money laundering is generally defined as obscuring the source and/or destination of funds whatever the reason. It is a false equivalence to say that because one wants to hide the source or destination of funds that one knowingly is doing so with an illegal activity being the motivating cause. There is no such thing as "standard bank privacy" when nearly anyone in that organisation can look up your data without explicit justification or judicial review. In an era where, for corporations at least, money is speech, it certainly is limited for us mere mortals who can't setup shell corporations to sacrifice themselves for our causes.
Edit: I should be quite clear, I am neither for or against AML regulations. I, however, am for an equal playing field. I would like to see a world where the increasing quantity of money one has doesn't have an increasing effect on how many times one's vote counts at the expense of those who don't have as much. Privacy and the ability to act collectively to support unpopular opinions should not be a commodity that can be bought and sold in the form of a corporate veil.
> Money laundering is knowingly assisting criminal activities. You're actively hiding where the money comes from, exactly because you know it comes from illegal sources. (If the source were legal but embarrassing, all you'd need is standard bank privacy, not active laundering.)
Building an encrypted messaging app is knowingly assisting crimial activities ... all you'd need is standard communication privacy laws, not actual encryption.
Like I said before, not everything that is illegal is wrong. In Germany, homeschooling is illegal. In Russia, telling teenagers that some people are gay and that's OK is illegal. The US law is a hodgepodge of contradicting legal statements which are different in different states, and many things can be counted as legal or illegal based on your wealth, political connections, race, or just luck.
Law is not a bright shiny source of truth from outer heaven, it is a sketchy framework of hacks and patches written in haste to aid people in resolving their conflicts.
"Like I said before, not everything that is illegal is wrong."
But things that are illegal are... illegal.
Nobody in this thread is really debating the morality of illegal actions we're talking about. And while debating morality can be entertaining, it doesn't really change what happened here.
Yes. Two questions are: did the BTC-e founder knew that he is helping to legalize proceeds for MtGox hack? Or some general hack? Or just he didn't make due diligence on the source of money and just agreed to help for a fee? And second — what authority the US government has in running the trial? Why the case is not tried in Japanese or Russian or Cyprus courts?
That might be totally true, but money laundering as a crime itself is just a cover for prosecutors inability to find the real crimes. It's about as morally defensible as asset seizures.
That seems pretty bogus. You're telling me that you think if I operate a front business and help human traffickers launder their money (thereby helping them to cover up their crime), but don't involve myself with human trafficking itself, I've done nothing wrong, and prosecuting me would be morally indefensible?
Yes, the money laundering part should not be prosecutable as long as you weren't involved in any crime. The very concept that not telling the government about everything you do financially is somehow a crime is simply abhorrent.
>[0]: (Actually it is stricter now - borderline hilarious as my bank for the last twn years starts asking for my passport because of the KYC rules)
That's an issue, isn't it? Everyone can easily be in violation.
Anyways yes if you are working with the criminals that's one thing. Running a BTC exchange, if you aren't inquiring about the customers funds (you shouldn't, it's none of your business!) then it should be no issue. If you somehow know the BTC was stolen from Mt Gox, then yeah, you're helping with the hack and should be charged for that (not for money laundering, just for whatever the general charge is as a participant to a crime).
At the bottom of it the regulations create an objective standard for when you "should have known" the provenance of money, so it seems fairer to have them than not.
Yes. The crime in question is the human trafficking. Pursue and prosecute that.
If you go by the economic definitions of money, which generally include uniformity and fungibility, money laundering is really a whinge from law enforcement that police work is difficult, and can't they please go after someone who may be less dangerous and less guilty, but is much easier to catch?
You can't reasonably expect people to investigate the full history of all money they receive as payments. Merchants have the right to presume that their customers are innocent in the absence of blatantly obvious evidence to the contrary.
As they say, gold has no smell. A coin that was obtained by murdering its former owner cannot carry residual guilt from the crime. Once it is used to buy a sack of oranges at market price, it is indistinguishable from a coin that was mined and refined by devout monks, repeatedly donated to charity, sequentially blessed by all the religious figures at that bar where all the jokes happen when they walk into it, and then spent on a sack of grapefruits.
If you buy a house with 50% legit income, and 50% black market contraband profits, you don't seize half the house and claw the other half back from the previous owner. The proceeds of criminal activity attach to the criminal, not to the property. The money has no soul or conscience. It is innocent whenever the person who carries it is.
And money laundering is not a crime, in my opinion, because in order for it to be a crime, certain inaccurate assumptions about money have to be true--namely that money is not uniform and fungible. It artificially makes money from a marijuana dispensary business different from money from a pharmacy. Cash should be cash, agnostic of the sins of its bearer.
You seem to be conflating multiple issues here. As far as I know, nobody considers it money laundering to unwittingly accept money from illegal activities as payment. But I don't buy the idea that if I knowingly set out to conceal the source of ill-gotten funds then I've done nothing wrong. I've colluded with criminals to abet their crime in that scenario.
Know-your-customer laws do just that. Go to a bank with $20000 in cash and no ID, and try to open an anonymous account with it. Take that $20k to a car dealership, and try to buy a car off the lot with it. As you walk away, cops stop you and take your cash via forfeiture. The prevailing assumption seems to be that anyone carrying that much cash is a criminal. The assumption should be that cash is cash, is cash, is cash. The whole point of having it is to dispense with ledgers and accounting books in everyday commerce. They burned the tally sticks and stocks to make us use paper money, and now they want the account history back.
Money with a history is not uniform and fungible.
If you make a dollar that came from a criminal worth less than a dollar that came from a saint, you are attacking one of the foundation concepts of money.
For the sake of argument, let's say I get $1 from my crime boss for intimidating a witness. I put it in my pocket. Then I find $1 lying on the street. I put that in my pocket. Then I help an old lady put groceries in her car, and she tips me $1. I also put that in my pocket. Then I go to the convenience store and buy a pack of gum. I reach into my pocket and pull out $1. What is the source of that money?
My pocket. Most people simply don't care where that dollar came from before that. Most people have no conceivable means of knowing where it came from before that. And if they knew, they wouldn't have the recordkeeping capacity to distinguish which dollar came from which activity. They only really care that I pay for the gum instead of shoplifting or strong-arming the clerk.
But ever since the invention of forensic accounting as a crime-fighting/investigative-reporting tool, it would seem that following the money often remains a valid tactic even when other methods of investigation fail. This is because financial businesses must keep meticulous records, as a consequence of being such juicy targets for fraudsters. So all the cop has to do is pop down to the bank records office with a warrant.
So as a society, we have a choice between having money that is more suitable for open trade, and money that is more suitable for combating crimes. My personal preference is for the former. Those who would like for money laundering to be a crime in and of itself--rather than an inchoate offense dependent on other crimes--prefer the latter.
The root question is whether you believe that criminals should be allowed to participate in white-market commerce, like normal people. I do. With that opinion, their blood lucre spends the same there as all the more righteous bills. They might be discouraged from committing crimes if they are less able to profit from them, but I don't think that's the case. If you make the cost of whitewashing black market money 25% of its face value, the criminal just does more crime, or charges more for their black market stuff. It's just another cost of doing [black market] business.
If you're trying to make crime unprofitable, you really need to seize assets and revenue streams only after a conviction, and in proportion to the magnitude of the crime. Civil forfeitures with inanimate defendants and prosecuting inchoate offenses in the absence of primary offenses is just slapping justice across her blindfolded face.
I think you are still confused about what constitutes money laundering. Accepting money from a criminal in exchange for goods or services is not money laundering, yet your whole post is about that.
Like, let's take the complication of know your customer out for a second. Of course you should not be prosecuted because a bank robber comes to your store and uses the money he stole to buy something. But if you are keeping fraudulent books in a cash-heavy business to conceal the source of tens of thousands of dollars you or your associates made through criminal activity, why shouldn't it be a crime?
Can you explain this? If someone has a bundle of cash from illegally selling drugs, then they give it to their store front to "launder" as retail income, aren't they now paying tax they wouldn't otherwise pay?
Why would there be personal income tax on the criminal activity? Guy sells drugs but obviously can't record the profits as DrugCo's profits, so he records it as RetailCo's income. If DrugCo was legal, the taxes would be on that company instead. His personal income tax is unchanged: whatever he takes out of RetailCo is still taxed, and RetailCo pays whatever corp taxes are applicable.
The only difference is in the details of the corporate taxation. Selling meth legally might be taxed differently than laundromat services. So an ethical money launderer should look to use front businesses that have an equivalent tax rate and not take advantage of any special tax discounts that wouldn't apply to the original source.
What I meant is I've been to a restaurant which turned out to be a money laundering front but I can't seriously describe myself as a victim. In fact, the food there was cheap and delicious!
But I appreciate your clarification. To rephrase what you are saying: it falls under US jurisdiction because some US persons were victims of a crime and some of that crime money ended up being traded on BTC-e (allegedly).