Money laundering is a very intriguing topic for those whose experience in it all lies in documentaries and series. So, for the greatest laundering schemes of all time, read on…

Anyone who’s seen the Netflix shows Dirty Money, Narcos, Breaking Bad, or Ozark will be familiar with money laundering and its influence on modern entertainment. It really is a huge source of intrigue for many due to how far removed it is from most peoples’ lives.

Because of this, you might want some real-life examples of money laundering to sink your teeth into, going beyond these TV shows.

If this sounds like something that might intrigue you, this post will provide just that. So, for some real life cases of drug conspiracy charges and terrorist crime, where money laundering was a key part of it all, read on…

What is Money Laundering?

Before we get into the greatest money laundering schemes of all time, we’re going to quickly go over what it is, so you have some context.

Essentially, money laundering is the illegal process of making money earned through criminal activity look like it’s legitimate. The money made from the criminal activity is considered ‘dirty’ and it needs to be ‘laundered’ to make it clean.

Dealing in large amounts of dirty cash can leave criminals open to getting caught. In order to deposit their money into a bank account, it needs to be clean.

To launder the money, criminals usually follow these three steps:

1. Placement: putting the money into a legitimate financial system.
2. Layering: concealing the original source of the money through a series of bookkeeping tricks and transactions.
3. Integration: withdrawing the laundered money from the legitimate bank account and using it for whatever the criminals need it for.

There are tons of different money laundering techniques that use the above steps, but the most common one is to use a cash-based business owned by the criminal organisation to clean the money. With all this in mind, it’s time to look at how some of the greatest money laundering schemes ever were carried out.

What Were the Greatest Money Laundering Schemes?

This is the moment you’ve all been waiting for, the greatest money laundering schemes to ever have happened. Here our list:

1. HSBC

Investigators into a HSBC money laundering scandal found that the bank had been serving as the chief launderer of Mexican and Colombian drug cartels. Apparently, the bank had some poor regulations that made it easy for the cartels to exploit, resulting in both cartels laundering a collective $881 million through them.

They did this by selling narcotics in the US, smuggling the money across the border to Mexico, and depositing it in HSBC’s Mexico branch without arousing the suspicion of US officials.

When this case concluded in 2012, HSBC had to pay a $1.9 billion fine to avoid prosecution. This included another case where the bank was found to be moving money for Saudi banks who were tied to terrorist groups.

2. Wachovia

Similar to HSBC, Wachovia is one of the largest banks in the US and became embroiled in an investigation into a money laundering operation conducted by the cartels.

In April 2006, a DC-9 jet landed in the port city of Ciudad del Carmen, on the Gulf of Mexico. It was then raided by Mexican soldiers who found 128 cases stuffed with 5.7 tons of cocaine worth $100 million.

They were able to trace the purchase of the jet back to money that was laundered through Wachovia, and the investigation started there. The US Drug Enforcement Agency found billions of dollars in wire transfers and cash and traveller’s checks in the bank, forcing Wachovia to settle the case with a $110 million asset forfeiture.

The most astounding part of this money laundering scheme is that the cartel managed to launder an estimated $350 billion through Wachovia over the years. This is equal to one-third of the GDPR of Mexico.

3. Nauru

You’ve probably never heard of Nauru, but the money laundering that happened on this tiny island near Australia was rampant in the 1980s.

The island became a money laundering haven for the Russian Mob and al-Qaida, as it had tighter privacy restrictions than both the Cayman Islands and Switzerland. It’s estimated that $70 billion of Russian mob money was laundered through Nauru in a single year.

Nauru specialised in something called a shell bank, which only exists on paper. It didn’t keep records of the transactions that went through these banks or the identities of the people who used them.

The only reason Nauru isn’t still laundering money is because of sanctions imposed on them by the US. These were more severe than those placed on Iran, which led to them passing an anti-money laundering and terrorism financing law in 2004.

Once one of the premier economies in the world, Nauru is now an economic wasteland, with no way to make money and a grim outlook for their future.

4. Al Capone

No list of money laundering schemes would be complete without a nod to the famed starter of it all, Al Capone. In fact, Al Capone literally laundered his mob money by purchasing laundromats.

Despite his eventual arrest and conviction being based on tax evasion, it’s estimated that Al Capone laundered upwards of $1 billion through various means.

On top of that, he perpetuated and encouraged crime in Chicago more than any other figure, which was arguably worse than the money laundering itself.

5. Liberty Reserve

To bring ourselves back to a more modern case, Liberty Reserve laundered more than $8 billion in the US through the use of a virtual currency. This money was made through 78 transactions processed by Liberty Reserve, many of which were related to hiding the proceeds of:

• Credit card theft;
• Identity fraud;
• Hack attacks;
• and Ponzi scam investment schemes.

The founder of the company, Arthur Budovsky, was sentenced to 20 years in prison for money laundering, and the company was shut down in 2013.

6. Tom DeLay

Tom Delay, a former majority leader in the US House of Representatives, was convicted of money laundering in 2010. However, he managed to overturn this conviction in an appeals court in 2013.

Delay was originally convicted of improperly funnelling about $190,000 in corporate money through the republican national committee. The money was used to fund the campaigns of individual republican senators, six of whom won. This caused the republicans to control the legislature for the first time in modern history.

Are There More Money Laundering Cases Out There?

Today, we’ve talked about what money laundering is, and shared six of the greatest money laundering schemes with you. These schemes are just the tip of the iceberg, as there are hundreds of other cases of money laundering out there that you can look up. Also, if you want more details on these schemes, they’re just a quick internet search away.

If you’d rather be entertained by flashing images and re-enactments of these great schemes, you don’t have to look too far. TV shows listed previously, as well as any film depicting the actions of Al Capone, will certainly satiate your curiosity.