RE: Laundering money through commodity futures

["Pat Farrell" <pfarrell@netcom.com>]

 hughes@ah.com (Eric Hughes)  posts to C'punks:
>> This zero sum nature is the key to laundering the money. Person A and
>>  Person B get together and guess that the price for a commodity is going
>> to go up.
>
> Guess.  Read that word again; it's important.
>
>[stuff elided]
> The example is ludicrous, but the conclusion is valid.  More
> transactions means more interactions between them and more possibility
> to hide something inside the ever-increasing flux.

On the OP-Ed page of the WSJ a week ago thursday (page A14) is an article
that describes a way to make a $100,000 bribe look like extrodinary luck
in the cattle futures market.

The trick that both the initial poster and Eric missed is that you don't
guess. You need a shady broker who makes a saddle - both side of the trade -
and doesn't register either. Once the market has moved, one will post a
gain, and the other a loss. So you could, hypothetically of course,
post the loser to a huge poultry conglmerate, and the winner to a successful
laywer's account. The Poultry firm would write it off as a normal market
loss that was protecting their operations. The laywer would claim that she
read the WSJ and was lucky.

But untracable electronic markets will have lots of transactions, so there
will be lots of ways to play these games. This is what drives the taxman
crazy.

Pat

Pat Farrell      Grad Student                 pfarrell@cs.gmu.edu
Department of Computer Science    George Mason University, Fairfax, VA
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