Money laundering on the menu

I’m not a fan of sushi myself (it’s raw fish, guys – plus I have an uncle who breaks into singing “If you knew Sushi like I know Sushi” whenever he sees me), but plenty of people are.  And the Mizu Sushi Lounge in Puerta Vallarta in Mexico was very popular with the trendy set.  Until the US Office of Foreign Assets Control got involved, and on 17 September 2015 froze the assets of the restaurant, along with four other businesses in Mexico, on the basis that “these entities provide financial support to and are controlled by Mexico’s Cartel de Jalisco Nueva Generacion (CJNG), which OFAC designated earlier this year due to CJNG’s significant role in international narcotics trafficking”.

So how does it work, this laundering through restaurants?  Of course, even in these days of credit cards and contactless payments, they are still cash-intensive businesses – and it seems you can charge a lot for sushi (again, guys – raw fish).  And a successful restaurant is particularly useful (especially a high-profile one), as the bank will believe you when you bring in bumper takings every week.  After all, no-one is checking whether restaurants are full or empty – there’s no regular supervision, apart from the occasional food safety checks.  Indeed, the most efficient laundering businesses will have accounts at several banks so that they can pay in the same bumper takings many times over.  (So if you have a restaurant business as a customer and they keep moving money between your bank and other banks, you might want to consider this possibility.  Have you all been told the same story, each of you believing yourself to be their only bank?)

When it comes to this type of local knowledge, the local bank can really earn its keep.  Head office in Mexico City might have no idea about restaurants in Puerta Vallarta, but you can bet that the local bank staff know the popular spots and the places to avoid, the hot ticket restaurants and the ones that are empty even on Saturday night.  For those of you operating accounts for local restaurants and cafés, it might just be worth handing out the luncheon vouchers to get your staff to keep tabs on them.

This entry was posted in AML, Money laundering and tagged , , , , , . Bookmark the permalink.

2 Responses to Money laundering on the menu

  1. wyntk14 says:

    Years ago there was a pizza restaurant in town (probably the first – I’m talking about the 70s). The story goes that HMRC counted the number of flour bags that went in and worked out how many pizzas they could make and used this to prosecute the owners for tax evasion.

    • Welcome to the blog, Andy, and thank you for your comment. Now that’s lateral thinking – and supports the idea that local knowledge, commonsense and simple observation can go a long way in “knowing your business”.
      Best wishes from Susan

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