How America became the money laundering capital of the world

By | May 7, 2021

Peter Stone writes:

In March, federal agents raided the Beverly Hills premises of a company called U.S. Private Vaults. According to a subsequent grand jury indictment, U.S. Private Vaults was a money laundering operation where drug dealers and others could anonymously stash fentanyl, guns, and “huge stacks of $100 bills” in safe deposit boxes. U.S. Private Vaults didn’t really bother to hide its business, boasting in ads, “We don’t even want to know your name.” It also shared its strip mall storefront with Gold Business, which allegedly specialized in laundering drug money via purchases of gold.

The case of U.S. Private Vaults is just one of the many money laundering schemes uncovered by federal investigators in the United States every year. Perhaps the most notable aspect of the story is how blatantly old school it all seems: the gold for cash, the drugs stuffed in safe deposit boxes. In our current golden age of money laundering, the schemes are usually much harder to suss out, the players are far more sophisticated, and the amount of money laundered in the U.S. yearly is nearly unfathomable: Experts say the figure runs into the hundreds of billions of dollars a year.

America’s money laundering problem became much clearer last fall, when BuzzFeed and the International Consortium of Investigative Journalists published a blockbuster exposé revealing that, from 1999 to 2017, banks filed reports detailing $2 trillion worth of suspicious activity to a tiny 300-person Treasury Department unit called the Financial Crimes Enforcement Network, or FinCEN. Known as the FinCEN files, the trove of leaked documents shone new light on how the U.S became a magnet for money launderers from around the world, from drug cartels and human traffickers to Russian oligarchs and African kleptocrats, due in good measure to systemic regulatory problems. All too often they found safe havens for their illicit gains in U.S banks, as well as real estate, Bitcoin, art, and other investment niches.

“The U.S. is still the venue of choice for money launderers, cartels, and corrupt politicians the world over,” Ross Delston, an independent American attorney and anti–money laundering expert, told me. “Our anti–money laundering framework is filled not with cracks or crevices but rather is replete with open doors, windows, and arms.” [Continue reading…]

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