Casino Money Laundering: A Theoretical Example
Let’s say a casino makes $100 in a year. Their expenses are $60 a year. Profit should be $40. Which means taxes owed on $40. The casino owner thinks paying taxes is for “losers.” What to do?
Step 1: What if the casino-instead of reporting it-shovels some of their cash income-let’s say $10-into a briefcase for trump to take home with him spend as he pleases. The casino won’t pay taxes on unreported income (this is illegal by the way). Now it looks like they brought in $90.
With expense of $60/year, that’s $30 of profit to show the IRS. Meaning the casino owes taxes on $30.
Bonus: trump doesn’t teport that cash income. (Legally, he DOES have to, but he’s a cheater so he won’t)
Step 2: What if the casino pretends there were more gambling losses than they really had-they claim they had to pay out $20 more in gambling losses than they really had to. That $20 goes to whoever is laundering money through the casino-they make bets with dirty cash, pay out a cut to the casino for laundry services, but now can declare legit gambling income to show to the IRS.
“No Mr. Taxman, my millions didn’t come from trafficking minors for the global rape trade! I’m just really good at poker.”
The why of laundering splainer thread here:
Now it looks like the casino only brought in $70. With $60 in expenses, it shows a $10 profit, on which it will owe taxes.
But wait! The casino owners have to pay back/bribe the politicians and mobsters who helped them get & keep the casino license! How best to do that?
Well, bribery and kickbacks are illegal so they need to find a way to legitimize those payments.
Step 3: Have one of your trusted (mobbed up) vendors inflate the sale price of goods to the casino by $15. $3 cut to the vendor for acting as a conduit for the bribes, and the vendor pays $12 to whoever you need to bribe. Via “consulting fees” or whatever.
Now the casino’s expenses show as $75, income shows as $70, and your casino is showing the IRS that you had a loss of $5.
Voila! You just avoided paying taxes on a whole bunch of money.
Enjoy prison!
