I'm 6 episodes into season 1 and I'm hooked. It's not necessary for understanding the show but I realize I don't understand money laundering. I get having a cash business, like a titty bar, in order to falsify elevated income but I don't get falsely elevating expenses. In episode 6, Rachel discovered Marty cooking the books at the Blue Cat. For example, he's claiming expenses on 25 air conditioners when only 4 were actually installed. How does that help the Blue Cat show it's making money?

It doesnt really make the blue cat earn more. It simply obfuscates the origins of illicit money. Ie prostitution, drugs, blackmail, gambling etc

i believe it works this way:

the IRS / Treasury / FBI isn't stupid... they would know 'about' how much a strip club, dry cleaners, convenience store, beauty salon would make - cash business based on size, location, etc.

So say you have $500k you need to launder - the strip club cash 'In-Flow' only realistically covers half that ... so to hide the additional $250K you have to make up fake expenses too -- like repair work, air conditioning work, etc...

then your money is laundered - ie its 'accounted for' -- I made some - spent some and have xx left over 'clean money'. Maybe even - 'in the red' on paper but not really because it's a stack of sham invoices...

That would be my guess - but I am not an accountant.

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I do not follow that. Any expense, be it for a tangible asset or a service provided, must show a corresponding income to prove it could be afforded.

quote:

Originally posted by Keystoner:
I do not follow that. Any expense, be it for a tangible asset or a service provided, must show a corresponding income to prove it could be afforded.

I am your sham contractor uncle. i have several fake businesses... even have business licenses... you 'pay me' 200K to resurface your lot, cut your grass, re-roof your house in actuality you never paid me shit.

you kept the money you made selling drugs. (maybe gave me a kicker) but the money is 'laundered' because you have receipts that say you spent it.

Its a two part deal-

you have to be able to show 'where it came from' - ie cash from the strip club, dry cleaners whatever

and where it went -- the fake invoices...

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quote:

Originally posted by Keystoner:
I do not follow that. Any expense, be it for a tangible asset or a service provided, must show a corresponding income to prove it could be afforded.

Or, you run a cash business. Like a strip club / bar. Prove how many customers come in and out, how much they spend.

Car wash; same thing. Cash business, prove how many customers come in, pay $20 for the premium wash, $18 for the gold, $15 for the whatever....

Those are the simple ways.

Slowly, incremental, and make it somewhat "believable" as to stay off the radar.
It's usually not the IRS that says "Hey, this doesn't add up" unless they hit you with and audit. It's usually DEA/other law enforcement that points it out.

Who owns the sham contractors in Ozark? The cartel?

sorry haven't watched that show specifically

was speaking in general terms from things i have read ...

they love cash businesses though - like gambling, bars, etc because you can make up numbers more easily to create false income...

where i grew up gambling was illegal but 'BINGO' parlors did big weekend cash business ... looking back years later it was pretty sketchy and I think a money laundering process.

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Cash business makes sense for the income. These sham contractors have problems as well. If they have an invoice for 25 air conditioners, they better have a receipt for the 25 air conditioners they bought. And what happened to the other 21?

quote:

Originally posted by Keystoner:
Who owns the sham contractors in Ozark? The cartel?

I think they are all shell companies set up by Marty. I don't want to spoil anything but there is a sort of off-hand comment in season 2 that leads me to believe that.

It depends. You have straight up cash businesses like the strip club to push income through. But then you use that income to fix up the motel, hence the air conditioners and remodeling (remember the motel was in shambles) and those are true expenses, so the following year you can then say the motel is making double/triple the money (when it isn't) and wash 2-3x more money through the motel. If someone checks it now looks like a nice place that does business and is busy with customers and can justify a huge income increase.

For example: It's kind of hard to wash $600k in income a year through a decrepit gas station that is in shambles and has 2-5 customers a day. But really easy in a nice shiny new racetrac station that's got 10 cars a minute driving in and out of it.