The Masters of Money Laundering - Part 4

In this edition of our newsletter, we turn to arguably the most famous criminal ever known: Al Capone.

Capone is often credited as the inventor of money laundering as he literally purchased laundromats to make his illegally earned money ‘clean’.

This concept served as inspiration for the character of Walter White in the famous series Breaking Bad, who laundered his money in a carwash.

Like the stories of the previous Masters of Money Laundering, there is much to be learned from the case of Al Capone.

Capone’s Money Laundering (ML) techniques

Capone invested his money in legitimate, cash-intensive business such as restaurants, nightclubs, and laundromats. In doing so, he mixed his illegal earnings with the legal profits that the companies made. This made it impossible for law enforcement agencies to trace the source of his wealth back to his criminal activities.

Even though this may seem like an ordinary money laundering scheme today, back in the 1920s, Capone was the first to think of this technique.

Influence on modern ML techniques

As the inventor, Capone’s impact on money laundering is widespread. The money laundering techniques that we know today are in their core very similar to Capone’s techniques.

Criminal organizations nowadays also often invest in cash-intensive businesses like casinos and high-end luxury goods. Furthermore, criminals today also move their money through complex financial networks.

Aftermath

In 1931, Capone was sentenced to 11 years in jail for tax evasion. Around this time, the crime of money laundering was not regulated, so the authorities convicted him for tax evasion.

Capone died shortly after being released from jail. At the time of his death, his net worth was believed to be around $100 million, which is equivalent to about $1.5 billion today.

Even though it has been almost 100 years since Capone ruled his criminal empire, his influence is still deeply rooted in our financial system.

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Next week we turn to another Master of Money Laundering!

Best,

Sep from CDD Solutions Solutions