Henriad (History Plays, Book 5)

15: redeeming time when men least think I will

Harry

So, since Oddcastle has brought it up, it's about time in this story that you understood how money laundering works, because it's about to become a bit important.
If you've got an illegal business, say drug running, then you're getting a lot of cash flow in, that you can't account for, because your goods are illegal. You're selling something that you can't have traced that you ever possessed it, so there's no good reason for you to have that money. Now, some of that money you use to acquire your illegal good, but not all or you wouldn't be making a profit, right? Follow? Good.
We'll use a slightly more legal example, so as not to incriminate anybody, all right? Say I'm doing other people's homework at school, writing essays for them, and making a couple of hundred dollars a week doing that. Well, I can't explain to my parents, or anyone, where I got all this money, now can I? So I have to have a legal reason why I've got this money. So I start a legal business, but one rich in hard to trace cash, say mowing lawns or washing people's cars. I do that, but I do the bare minimum, that way I have an excuse for having all this cash.
Now, obviously on the macro scale it's a bit more complicated, but the principal remains the same. You buy up various businesses, strip clubs, valets, laundromats, car shops, run down gyms that take daily fees and are mismanaged by a disabled alcoholic, that type of thing. Then you spread out your less than legal earnings into these various enterprises in such a way that it's nearly impossible to tell that a few thousand dollars are skimming in every week. Thereby legitimizing the gain and 'laundering' it.
But why do you want the government to know you've got this money, Harry, you ask? Then you've got to pay tax on it? Well fun thing, governments have no issues with punishing businessmen such as ourselves by using any method possible. Namely, attempting to prove we've evaded taxes. Also, we're paying less taxes on these businesses than we would, because they're small and by all accounts, failing. They are, shell corporations, and while I may control them it's mounds of paperwork that I can burn at a moment's notice, to trace them back to me.
That brings us to the next topic, how are we not getting caught doing all this? Well, that's the beauty of the shell corporations. Take someplace like Eastcheap gym. It's not owned by me. It's not owned by my father. It's owned by an LLC, which is owned by an offshore holdings syndicate, and that is what I own. But since it's offshore do you think that our local government can easily request all those documents for no good reason? Not on your life. For all anyone can tell the gym belongs to someone, we'll use a fictional name like Oddcastle, and should anything go down then he owns it and is only backed by a web of LLCs that then it would take literal years to track through to get anywhere close to my good self.
So, since the gym is a shell, should it be discovered to be a front, then I could abandon it, sell it in reality or sell it to another corporation that I also happen to hold, and the domino affect of legal retribution is stopped. Our dealings are structured much like a spider's web. If one part is snipped, the rest remains in place because while they were connected, they weren't reliant on the other for support. Any one of our dealers or middle men could be arrested, or turn traitor, at any time, and with a few snips of the web I can have the issue cauterized completely, and the rest remains strong.
Needless to say, the deeper someone is in the web, the harder it is to extricate them. It can be done. But it takes work. That's why my father was less than pleased with my adjustments, he thought that his influence was being cut off, likewise he changed most everything I did when he decided he didn't trust me, to cut off what I was touching so that he could isolate me if necessary.
Make sense so far? Right, this is drastically simplified but it's what you need to know to go forward. I'm not actually teaching you to do this but you do need to basically get where going and coming from.
Now, how would someone go about betraying you? All right, let's take a fictional example. I'll call these people something ridiculous that nobody would ever be named. Let's call them, Percy and Glyndower.
Since all this cash is, by nature, not documented, it's relatively simple for mid level dealers, whom we're going to refer to by the completely fictional monikers of Percy and Glyndower, to start skimming from the take. After all, in theory all of this is off the books so how is someone to know it's missing?
Well, if for example you're me, you run the numbers as to what they should be turning in versus what they say they are turning in, and you notice it's not adding up far too often. So what do you do if you're me? Then you change up their role, and dress up with your clever religious friend, and become the person they were picking up the money from, hand them say a million dollars, see if they hand you eight hundred thousand the next day. Grossly simplified, completely fictional example because I'm not a criminal but we'll move on for the sake of this fictional story about these fictional people.
So, now you know Percy and Glyndower are skimming from you, and you know that they've got people under them supporting it. So you've got to cut the head off the snake and end this now. But unfortunately, your father doesn't believe you or read your evidence, instead he throws you out of the house and says he wishes he had a different son. But I digress.
Now, you're Percy and Glyndower. You've got all this money you've been stealing from your boss—but you're in the same boat as we were back in the beginning. You've got all this money lying around that you have no logical reason to have. IRS is knocking, your boss is knocking, what's to be done? You don't have any shell corporations, and you can't utilize your boss' shell corporations to launder the money, because your boss's son who is indescribably smarter than you has already made arrangements such that it would be obvious if anybody but his esteemed self made large deposits.
So what are you to do if you're a pair of traitors called Percy and Glyndower? Well, you can't launder the money properly not if your boss's clever and handsome son seizes a front business you were trying to obtain. So. Time is running out. And you need to come up with a great reason why you have all this cash not just for the government but more importantly for your murderous boss who is one of the more dangerous people on this half of the continent evidenced by the time he had his former business partner executed in cold blood.
Well, you've got to get this money at least partially laundered and quickly, time is running out before there's a target on your back. So what do you do? You turn to the easiest and one of the oldest ways to launder money. Gambling.
Not to get too into the math of it because that's tedious and frankly irrelevant to our story, but if you are both the house, and at least one of the betters, it's fairly easy to make a whole lot of money change hands in a relatively explainable way. Not a legally explainable way unless you go to the trouble to go over state lines, but the fines for illegal gambling are much less than for, I don't know, racketeering. It's messy, and it's barely passable, but if you're not smart and you're trying to fool you're definitely smart boss and his definitely smart sixteen year old math prodigy son, then it ought to work.
But Harry, you ask, it's gambling isn't the outcome up to chance? No, not in this case. Supposing you're Percy, and you've got a son, let's call him something stupid and inane that nobody would be called ever, something totally absurd. Let's call him Hotspur. If you're Percy, and you've got a son called Hotspur and you enter him into something, say, a boxing match at your old boss' gym on a fight night. Well loads of people bet on these fight nights. So you make sure the 'house' the person running the betting, is on your payroll, and you bankroll him with your dirty money.
You bet a small sum in favor of your son. And then your partner, Glyndower, bets massively against him. And your son, he's good at this sport, he's got really high odds to win, doesn't hurt that you bribed the house to do that.
Now all that's left is for your son, Hotspur, to the throw the fight, or lose a hockey match, or whatever sport you chose to bet on, and your partner, Glyndower, reaps all this money that was of course yours and his to begin with.
It's messy, and it's definitely not going to hold up to scrutiny if your boss's son has a head for numbers and a grudge against you to begin with, but it ought to get the job done. The only weak link in this chain is the person that you have acting as the house if this person is either a double agent, or just a blithering idiot, then your scheme could unravel.
"Excellent these are everyone's bets for tonight?" I ask, picking up the list.
"Yeah, I can give you better odds, Harry; you only told me this morning you were even doing it," Oddcastle says.
"And Percy didn't tell you why he's bankrolling the bets?" I ask.
"Why wouldn't he? He thinks his boy is going to win it's easy enough to promise me that," he says.
"Hm, yeah," see? "All right. You might not want to bet on me."
"Why? You're full of pent up rage and I like drinking money," Oddcastle says, "You're not paying me to babysit."
"I'm fairly certain Skander is the one doing the supervising in this situation," I say, patting my little brother as he drools on Oddcastle's desk.
"Oh, you're not fighting Master Harry?" Hilda rushes in, carrying beer no doubt Oddcastle sent her to get. He acts like he doesn't like having her around, but he clearly does. Do they speak each other's language? Not a bit. Has that stopped him from working out sign language to get her to do things for him while he does the easier chore of holding the child? Absolutely not.
"I am, Hilda, and don't worry about me, it's not allowed, I'm always doing precisely what I mean," I say, in German, winking at her.
"Ned coming to watch?"
"He said no, which probably means yes, he's got class tonight though," I say, fiddling with wrap for my hands, "We've got a couple of hours, I might go for a run."
"I don't suppose I get to know what you're up to?" Oddcastle sighs.
"You may someday in Christendom."