It's money laundering, but how is in untraceable ?

Or you need a legit business where you control the books from start to finish. Did you watch the "Kitchen Nightmares" that featured Amy's Baking Co.? Did you notice that the male owner, who was the ONLY one who was allowed to touch the till and the computers that did the accounting? What he was probably doing was entering higher values for everything from price to tips. Then he adds money from his illegitimate sources into the till, and it becomes legit. You get the money out of the illegitimate source using a "mule." This is someone who you pay to do basic tasks on the side as an administrative assistant type, and mixed in with some of those tasks, the mule will receive a wire transfer in their name from, say, Liberty Reserve and drop off the cash at the restaurant. Magically, the wire transfer will make up the difference between the amount that was recorded as coming in and the amount that was actually charged to a customer's credit cards, so the books will balance at the higher price point. If it gets audited, it just looks like a customer paid partially in credit and partially in cash. Since the amounts that the mules carry fly below the amounts that would flag a suspicious activity report, and it's a double blind transaction unless someone really looks at it hard to find the connections since you pay the "personal assistant" in cash anyway. So, in the case of Amy's Baking Co., you keep your hairbrained jailbird wife out of the way in the kitchen, and you have a "front" to launder your illegitimate money into real cash.

Right. Money laundering isn't about anonymity or untraceability, so much as it is about making the money usable or legit. Making figuratively dirty money figuratively clean. If you make $100 cash a week and $1000 in salary a week, you can probably pass that $100 and not raise any flags. But if it's 50/50 or worse, you are going to raise some flags. You report $20,000 in income to the Feds, but you are spending $100,000 a year? They are going to get you. Casinos were great for that before they started making things traceable. You walk in with $10,000, churn it for a while so you convert it into $10,000 in chips, and then you cash in the chips for cash and a receipt that says you just won $10,000 a a casino. Report that on your taxes and bingo! You've got $7000 after taxes that is legit. Same thing with the laundromat or the bar. You (very basically) take your ill gotten gains, convert it into quarters and start plugging them into washing machines. Now, your store's manager empties out the quarters once a week and reports that as business income that filters back to you as investment income. Pay your taxes and now you have legit money. (It's the opposite of embezzlement, actually, because you are putting extra money into the system, instead of skimming cash out.)

money flows in, but seems to get it out you can't do it anonymously. The whole point of laundering the money is that you don't have to spend it or possess it anonymously.

(So the hard part is in how to make it look like you're a legit seller of goods/services that can pass a sniff test ? Or in some cases, actually are selling goods/services, just not legal ones, like most cybercrime ? It just seems like even the bar example, a look at the ins/outs would show they weren't buying enough booze to justify $1mill profits, or is that all part of the charade -- cooked books, invoices, accountants etc ?) Bitcoin and (presumably/allegedly) the Liberty Reserve isn't about laundering as untraceability. Laundering is taking illegitimate money and making it look legitimate so you can buy things without law enforcement knocking on the door wondering why a guy who reports $10,000 in income is driving around in a Bentley and has $5000 in his pocket. When you launder, you WANT a paper trail so nobody thinks you are into any funny business. Whereas with your cases, you aren't worried about looking like you are spending more money than you have, you just want to buy some cocaine without having a credit card receipt or cancelled checks made out to "my dealer". You could just send cash, but electronic currencies are easier and faster. Then, the dealer will want to launder his bitcoin profits. So he'll figure out a way to make it legit looking so he can buy his pastel sportcoats and speedboats without raising any eyebrows.

I believe Western Union requires identity verification, at least within the US. You could possibly get around this with fake IDs and/or sending from abroad. But if you just want an anonymous store of money, you only have to convert your money into a pile of cash. The trick with laundering is that not only does it conceal the original source, it provides a plausible alternative. So you need a business like a laundromat that normally deals in cash transactions that aren't recorded anywhere except by the proprietor.

To answer part of your question, Western Union, Moneygram, and other money service businesses (MSB) are very much required to submit currency transaction reports (CTR) and suspicious activity reports (SAR) to the U.S. government, as well as screen customers against the list of individuals who are not allowed to bank in the U.S. (usually, but not always, due to ties to terrorism). Here are a few links from the U.S. Department of Treasury's Financial Crimes Enforcement Network, which oversees the reporting program: http://www.fincen.gov/financial_institutions/msb/materials/en/prevention_guide.html http://www.fincen.gov/financial_institutions/msb/materials/en/bank_reference.html http://www.fincen.gov/financial_institutions/msb/materials/en/report_reference.html

These answers raise more questions ;) It seems maybe it isn't as easy to dump anonymous cash into the account via western union etc ? (Unless doing it all in small transactions to avoid scrutiny ?) If taking it out isn't the problem, rather making it look legit is, how does one make it look legit ? Claim to be running a business and selling goods/services and taking LR/bitcoins as payment ? (So the hard part is in how to make it look like you're a legit seller of goods/services that can pass a sniff test ? Or in some cases, actually are selling goods/services, just not legal ones, like most cybercrime ? It just seems like even the bar example, a look at the ins/outs would show they weren't buying enough booze to justify $1mill profits, or is that all part of the charade -- cooked books, invoices, accountants etc ?)

Also, this kind of crime is why there are no longer any bills over $100. There used to be $500, $1000, $5000 and $10,000 bills. But this made financial crimes like money laundering too easy, so they got rid of them. Now if you have an illegitimate business, dealing with the bales of cash is a serious hassle and very often gets people caught.

It seems maybe it isn't as easy to dump anonymous cash into the account via western union etc ? (Unless doing it all in small transactions to avoid scrutiny ?) Correct - "traditional" laundering is orders of magnitude easier if you have piles of cash and a cash-heavy business to run them through. Once it's in a bank account in a non-corrupt area, it's too late. (ie, you might keep it offshore in a place that doesn't care, but you can't just Western Union in $1M to the US and not have questions asked about how you came by that million.) If taking it out isn't the problem, rather making it look legit is, how does one make it look legit ? Claim to be running a business and selling goods/services and taking LR/bitcoins as payment ? Like I was saying before - you actually run a business that really does take cash as a payment. Classic examples are bars, laundromats, restaurants, and casinos. Then you just inflate the business's income with your ill-gotten money, so that instead of the "real" modest profit/loss the business really did, you claim it's very successful, see, look at this giant pile of money we have from all the business we do. (So the hard part is in how to make it look like you're a legit seller of goods/services that can pass a sniff test ? Or in some cases, actually are selling goods/services, just not legal ones, like most cybercrime ? It just seems like even the bar example, a look at the ins/outs would show they weren't buying enough booze to justify $1mill profits, or is that all part of the charade -- cooked books, invoices, accountants etc ?) This all comes down to "it depends." I'm sure there are money-laundering operations that are entirely fake, but it's safer if you have an actual legitimate business. And, yeah, you do have to get things to pass the smell test, especially if the cops know you're a bad guy and are looking for proof. And you're right -it can look suspicious if you only buy $X in booze but supposedly sell it for some improbable profit. How do you handle that? Well, you can cook the books a little, you can accept a smaller "rate of return" in return for greater safety, or you can just take the risk that the authorities won't look too deeply. Regarding selling illegal services - well, you don't say that, right? If you're a hacker, you don't invoice somebody for $100,000 in Illegal Activities. But one way of laundering that money is to bill for something innocuous or legitimate - instead of "hacking your competitors" maybe you bill a client for "search engine optimization." That's another way of laundering, assuming the people paying have 'clean' money to do so with.