thebomb asked:
i was learning about stocks and bonds today and was hearing of course you could put all your money in stocks and bonds investments what not but was wondering is it easy to wash illegal drug money or dirty money in these systems im very well sure cause you could just say it was investment right .
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17 Year Old Company – Generate Monthly Income
No, its very difficult. Adding to the fact that the act itself is illegal and is called money laundering it has very serious consequences. The reason why its difficult is due to the Patriot Act. All banks have anti-money laundering policies that work in conjunction with the Patriot Act. Simple ways banks protect against this problem, you can only deposit personal checks into a brokerage account, you cannot deposit cash, you cannot deposit money orders, you cannot deposit cashier’s checks. Deposits greater than $10,000 are put on hold for up to 2 weeks while they are verified and cannot be transfered out into another bank account during that time. All banks are required to verify the identity of the account holder using government issued identification. For more information on these requirements you can check out this link:
Edit: Actually I have traded stocks as a matter of fact I am FINRA/NASD Series 7 and 66 licensed and have been for the past 10 years. If Scottrade allows people to deposit cash they are doing so with a program that is not completely compliant with the Patriot Act and they are probably the only one. It all comes down to how good their compliance officers are, and clearly Scottrade has questionable compliance standards The greater majority of firms like Fidelity and Schwab don’t accept anything that isn’t a bank check (meaning no cash, money orders, or cashier’s checks), Etrade doesn’t accept cash or money order, and the major brokerage firms don’t accept those forms of deposit. All firms accept ACH and wire transfers but they require additional information and approvals to set up.
17 Year Old Company – Generate Monthly Income
Well to answer your question I’m going to assume this is based on a purely ‘hypothetical’ situation. And my personal belief is that legal money is the best money. You never have to look over your shoulders. lol
That being said my answer would be ‘Yes’ it is pretty easy to wash money through it. Your talking about billions of stock traded daily. That’s alot of transactions to monitor. The key would be to keep things simple. The ONLY thing I would agree with the other poster is that it needs to be under $10,000. And I mean ALOT under it. Like $500 here,$500 there, $1000 here… etc. You would just have to be patient.
If you get caught it would not be because of the SEC it would probably be at the local level like your bank. But like I said if you kept it small they wouldn’t know where the money was coming from so it wouldn’t raise any red flags. And let’s be honest the people monitoring you have extra cash coming in too from waiter, exotic dancer, part-time surveyor or mechanic, etc.. So unless it’s an unreasonable amount of money you wouldn’t have to worry.
If I were you in this ‘hypothetical’ case I would have two accounts. And split the deposits between both. Like with Scottrade you can actually walk into one of their offices with a cashier’s check or money order and use the other for direct deposits from your bank to the broker. The only problem is that you have to report this income to the IRS. So you have to pay taxes. Which is all that the government cares about. Let’s be serious here if there was a way to tax illegal drugs then selling drugs would be legal today. lol You would be able to walk into a grocery store and buy some. Might even get a coupon for a discount. lol The only thing the government cares about is can they tax your income.
Another way to do this would be a Casino. I know alot of people who take their ‘extra’ money to Casinos. Buy in, play for alittle while then cash out chips. But again the only way to launder/make clean the money would be to report it as gambling winnings and pay taxes on it.
So my top 3 are:
1. Stocks
2. Casinos
3. Cash Purchases like flat screens or pay bills in cash
Obviously the other poster has never traded stock. Because you can in fact deposit money orders and cashier’s checks into your account and most online brokers like Scottrade and Sharebuiders you can deposit directly from your bank account. So it’s Simple put ‘cash’ into your bank account then use Electronic Funds Transfer to move it to your online brokerage account
Edit: You mentioned Scottrade “clearly Scottrade has questionable compliance standards” which is absurd. I guess that’s why JD Power and Associates had them ranked #1 for eight out of nine years. You also mentioned that Fidelity and Schwab wouldn’t except cashier’s checks like Scottrade. Well I left their links on here too. So either the government is not doing their job or you don’t know what the hell your talking about. So if you want to use your questionable funds to retire just set up an IRA on Schwab, you will even get a write-off on your questionable funds or open a brokerage acct. on Fidelity.
I’m also curious why you keep bringing up the Pat. Act. That is more for the CFTC which governs Foreign currencies, Foreign government securities, Foreign stock indices, Commodites and Futures trading. We’re talking about common stock like Microsoft which is govern by the SEC. Look at the link that ‘you’ gave and you will see all the pat. acts are about foreign banks and accounts or internationally this and that. Hell the first paragraph at the top reads “prevent, detect, and prosecute international money laundering and the financing of terrorism”. Do you notice the words ‘international’ and ‘terrorism’. The pat act is protecting us from actual foreign terriost not Billy from texas winning $1000 as some home Poker tournament and now he wants to invest it in stock.