Spoiler alert: This article gives away plot details. In addition, some quotes have been streamlined and language made appropriate.
Anti-money laundering (AML) professionals should ponder the many places where money laundering appears in television and movies. Real-world case studies based on indictments and press releases can seem dry, but watching and analyzing visual media has entertainment and perhaps even professional development value. It also provides a common framework that helps us explain our work to those outside the AML profession to help them realize that financial investigations can be fascinating and are essential to keep crime at bay.
As a lawyer and former cop turned prosecutor, I bring my own experiences and biases to Hollywood’s depictions of crime, justice and money laundering. Sit back and let us explore a few movies and shows.
Scarface (1983) stars Al Pacino as Tony Montana, a Cuban refugee in Miami in the early 80s who becomes a cocaine dealer and then kingpin. The movie became a cult classic and launched the careers of several actors. Viewer discretion is advised, since it includes graphic violence and bad language, but most audiences can appreciate the musical montage set to the song Push it to the Limit. Reminiscent of the MTV music videos of the era, it shows the expansion of his drug empire. Tony and his associates bring duffel bags full of cash to the bank and are initially greeted by Jerry the banker with pleasure. However, as the duffel bags keep coming, Jerry’s anxiety becomes apparent. The depiction of Tony’s management company, travel agency and beauty salon will lead keen AML investigators to deduce that these are merely front companies created to help move all the money. Jerry attends Tony’s lavish wedding and eventually the music winds down and the next scene shows Jerry in Tony’s office. Jerry tries to explain the difficulty of laundering so much additional cash, which creates increased risk from the IRS. Due to the increased risk, he tells Tony that he needs to raise the rates. Tony is not happy, so he parts ways with Jerry and decides to try out a new money launderer.
The first meeting with the new money launderers seems to go well. Hours elapse as they count the cash and the money launderer periodically writes a check to one of Tony’s front companies. Cash counting is hard work and the money washers are sore from the strain, so they stretch—but they are really giving the “bust” signal and reaching for their ankle holsters. Unfortunately for Tony, they are undercover federal agents who arrest him for Racketeer Influenced and Corrupt Organizations (RICO) Act violations. Tony sneers at the agents because all they have him on is “changing dollar bills” and they have no proof he is involved in criminal activity.
Tony is charged, makes bail and visits his defense lawyer, who paints a bleak picture. It will be impossible to beat the tax charges, but he can delay the proceedings and minimize the jail sentence. Tony’s lawyer requests a fee of $100,000 by check, and $300,000 in cash—making one wonder what the lawyer intends to report on his taxes.
In the era of Scarface, the Bank Secrecy Act (BSA) of 1970 was already in place—banks had BSA responsibilities, but they were still evolving. In addition, there were some corrupt banks who participated in the money washing activity with drug dealers like Tony. The RICO Act was in effect, but it would still be a few years until the Money Laundering Control Act of 1986, so there were no specific laws against money laundering. Thus, the actions of Tony and his banker to conceal and disguise his illicit cash income did not constitute the crime of money laundering that we know so well today.
Consider the challenges real-world prosecutors would have proving that Tony evaded taxes. Normally, tax evasion charges require the calendar year to pass and for the offender to file a tax return. Then the government reviews the filing and attempts to prove there was unreported income. The enactment of money laundering criminal statutes, plus strengthening of BSA requirements, gave regulators and law enforcement better tools to identify and prosecute money launderers like Jerry and Tony.
HBO’s The Wire is a fantastic television show set in Baltimore that focuses on the urban drug trade, but touches on many other areas as well. Money laundering is a theme throughout the series. The detectives start looking at street-level drug dealers, and their investigation starts to sprawl by the ninth episode of the first season. Detective Lester Freamon directs the team to research public records and emphasizes the importance of following the money and paper trail, identifying who owns businesses and apartments and piercing the veil of anonymity that shell and front companies provide. It is a scavenger hunt for leads and Detective Freamon states: “In this country, somebody’s name has got to be on a piece of paper… And here’s the rub. You follow drugs, you get drug addicts and drug dealers. But you start to follow the money, and you don’t know where the heck it’s going to take you.”1
In later seasons, one of the drug kingpins goes to school to improve his business skills and looks for ways to become “legitimate” by purchasing real estate. This requires interaction and cooperation from the city’s business people and government officials. As the police attempt to investigate the money flow, including political donations, officials interfere and restrict the scope of the investigation.
This drug activity within blighted urban neighborhoods creates unlawful profits that filter to the outwardly respectable people of the city, including business people, politicians and lawyers. Maurice Levy is a criminal defense attorney, but he also helps drug lords conceal and disguise their income and assets to invest in “legitimate” businesses, bribes, obstructs justice and engages in criminal and unethical behavior.
Another personal favorite television show is AMC’s Breaking Bad, where Bryan Cranston plays Walter White, an Albuquerque chemistry teacher turned successful methamphetamine cook and dealer. He is aided by his student Jesse Pinkman and the amusing, but crooked attorney Saul Goodman (played by Bob Odenkirk).
In season three, Saul advises Jesse to buy a nail salon to disguise his meth-related cash income and walks Jesse through the basics. “Now, you know you need to launder your money, right? Do you understand the basics of it, placement, layering, integration?” Saul explains the consequences of not laundering his income and what the IRS will think of Jesse’s unexplained income. When Jesse suggests he will simply look like a drug dealer, Saul pounces:
“Wrong! A million times worse. You’re a tax cheat…They take every penny and you go in the can for felony tax evasion. What was your mistake? You didn’t launder your money…I take your dirty money and I slip it into the salon’s clean cash flow…your filthy drug money has been transformed into nice clean taxable income!”2
“So you want me to buy this place so I can pay taxes?” Jesse asks incredulously, slowly starting to grasp the strange reality of money laundering.
Saul also gives money laundering advice to Walter, whose illegal income vastly exceeds Jesse’s. Walter and his wife Skyler decide to buy a car wash, and it seems like the perfect money laundering plan. Skyler is an experienced bookkeeper and becomes the business manager in charge of mixing the cash from the drug income and car wash income. The mixed funds get deposited at the bank and it all looks legitimate.
Walter’s meth business is so successful that Skyler cannot deposit all of the cash into the car wash’s bank account without attracting suspicion. There are not enough cars in New Mexico to pretend to generate that much income, so the unlaundered cash accumulates in a rented room of a storage facility. Skyler finally brings Walter to the unit and confesses her helplessness, but also demands of him: “How much is enough, how big does this [pile of cash] have to get?”3 This pile of cash—in the middle of a storage locker and covered merely by a sheet—may be the stuff of visual entertainment, though sometimes truth is stranger than fiction. Next time around, Skyler should consider some sturdy file boxes to stack the cash neatly, keep it out of casual view and make it easier to transport.
Ozark is a recent Netflix series starring Jason Bateman as Chicago financial planner Marty Bird who launders cash for a Mexican drug cartel leader. Marty soon finds himself in trouble and moves to the rural Ozarks, where he starts laundering cash by investing in a resort lodge and strip club. When Marty’s son finds out and asks if he is laundering money, Marty puts an interesting spin on it: “I’m helping people get their money into the bank so they can pay their taxes.”4
Ben Affleck plays forensic accountant Christian Wolff, the go-to guy for criminal enterprises who are the victims of financial fraud (if something happens with their cooked books). He is an accounting savant, performing complex financial analysis without a computer or spreadsheet, and is also a martial arts and firearms expert, perhaps to ensure the movie has enough action to appeal to a broader audience. He helps unravel laundered transactions and launders his own income through front corporations. The government protagonists are Financial Crimes Enforcement Network (FinCEN) investigators and analysts, and their tools are spectacular compared to what The Wire’s detectives were working with. For FinCEN, following the paper trail and obtaining records and video surveillance is all done with a magical query of their database.
What to Watch, and What These Shows Tell Us
At this point, it is clear I watch too much television and movies, but this is what qualifies me to review them.
The Wire and Breaking Bad are both great series worthy of binge watching from start to finish, and are enjoyable upon second viewing. Maybe Skyler should stack her cash better and The Wire’s Jimmy McNulty diverges from reality once in a while, but none of that detracts from the experience.
Ozark and The Accountant try to be realistic, but fall short. I can suspend disbelief, but sometimes the clash with reality is distracting. Both have good qualities and novel plotlines, so watch these if you have time, but do not expect to fall in love.
Scarface tries to be over the top and succeeds, so there is little point in dissecting the movie’s realism. Otherwise, it contains constant foul language, extreme violence and takes place in the 1980s, any of which are turnoffs for many. Consider starting with some popular Scarface clips available on YouTube before investing nearly three hours to watch the entire movie.
Returning to our AML discussion, these shows illustrate how the illegal drug trade creates significant cash income, which challenges criminals who seek to place it into the financial system. Consider that other cash-based crimes require similar money laundering techniques and contrast that with the many crimes today that garner illicit profits in alternate forms, such as virtual currency or property. Cybercrime payment methods substitute virtual currency for cash, which creates a different dynamic. AML investigators should examine the stream of both contraband and payments, and consider how this affects the money laundering process.
Criminals use front corporations and shell corporations to conceal income and assets, and inadequate transparency in the beneficial ownership of these corporations creates a hurdle for AML investigators.
Sadly, lawyers sometimes play a role in money laundering. “Send lawyers, guns, and money” was the refrain from the similarly named 1978 song by Warren Zevon, where the protagonist needs these three things to get out of a bind. Criminals sometimes find themselves in difficult legal situations and criminal defense is an important service that many ethical attorneys provide. But successful career criminals think ahead and sometimes need unethical or corrupt attorneys to assist with their enterprise. Crooked lawyers advise clients on how to break the law without getting caught, including by laundering money. Lawyers like Maurice and Saul do what no law-abiding or ethical lawyer would do, seeing business opportunity in criminal activity.
Television and real-life criminals also take advantage of corrupt, compromised or unaware financial institutions. Jerry and Marty exemplify this in fiction and a host of criminal and regulatory actions show it happens in fact too.
If you decide to watch some of the shows or clips available on YouTube, hopefully it is at home or in accordance with your employer’s policies. Your supervisor or human resources department may not be persuaded when you protest that you were simply doing AML research and training. As you watch these shows, consider the legions of aspiring criminals who have also watched them and thought about whether the techniques depicted were suitable for them.
Hopefully this discussion has been amusing, but it is worth remembering that profit-motivated crimes affect all aspects of society and the AML profession plays an important role in fighting them.
- The Wire, “Game Day,” Blown Deadline Productions/HBO, 2002.
- Breaking Bad, “Kafkaesque,” High Bridge Entertainment/Grand Via Productions/Sony Pictures Television, 2010.
- Breaking Bad, “Gliding Over All,” High Bridge Entertainment/Grand Via Productions/Sony Pictures Television, 2012.
- Ozark, “My Dripping Sleep,” Media Rights Capital/Aggregate Films/Zero Gravity Management/Headhunter Films/Man, Woman & Child Productions, 2017.