Mecum Auction in Denver - Motivated by Money Laundering?

[Nickshu]

I had an interesting conversation with a patient the other day who is a fellow car-guy. Mecum is having an auction here in Denver in June, the first time they have come to Colorado. He says they only reason they are coming to the state is because they realized that legal Pot dealers have tons of dough which they can't put it in banks or any insured investment as the feds can sieze it if they do. According to him Mecum thinks these dealers will use classic cars to launder the money. He claims Mecum thinks that the pot dealers/growers will buy then transport the cars to the next Mecum auction out of state and sell them off to "clean" the money.

Make any sense? Interesting regardless.

[1990C4S]

Okay. I have cash, but it never occurred to me to buy a nice car until Mecum comes to town? And I get to 'clean' more of my 'dirty' money by paying a buyers premium.

[widebody911]

I've always suspected that car auctions are a money laundering vector; there is no other explanation why someone would pay such stupid amounts of money for rather pedestrian cars.

[wdfifteen]

It's plausible, but it seems like there are less expensive ways to launder money. Are there a lot of car washes in Denver?

[1990C4S]

Originally Posted by widebody911

I've always suspected that car auctions are a money laundering vector; there is no other explanation why someone would pay such stupid amounts of money for rather pedestrian cars.

Stupid people with money is one explanation.

[herr_oberst]

If pot is legal, and the money made is legit, why are we calling it laundering?

[widebody911]

Originally Posted by herr_oberst

If pot is legal, and the money made is legit, why are we calling it laundering?

Pot problem: Banks still don't want this cash - Apr. 14, 2015

Colorado marijuana businesses have a big problem: Banks won’t take their money.

[herr_oberst]

I get that. I just don't get why they keep saying laundering. These pot dealers made their money on legal pot. The money is legit. They aren't trying to hide it, they just need somewhere to put it and hopefully get a dividend of some kind.

Laundering money by definition means the concealment of the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses.

We need a better term.

[911SauCy]

Originally Posted by herr_oberst

The money is legit.

Not if a bank won't accept it

[herr_oberst]

Originally Posted by 911SauCy

Not if a bank won't accept it

Yep. I guess it comes down to this. Stupid banks.

[sammyg2]

Originally Posted by herr_oberst

I get that. I just don't get why they keep saying laundering. These pot dealers made their money on legal pot. The money is legit. They aren't trying to hide it, they just need somewhere to put it and hopefully get a dividend of some kind.

Laundering money by definition means the concealment of the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses.

We need a better term.

What's legal in a particular state may not be legal in the UNITED states.

Just because colorado says it's OK doesn't mean the feds can't swoop in and take all that drug money away from the dealers.
As they should (IMHO).

[911SauCy]

I'm no accountant, but doesn't this mean if they aren't claiming it or it's not being accepted, thus not tracked by the Feds as income then you're also not paying taxes?

[aschen]

seems like a good business opportunity for less prudish business peoplw

[Noah930]

Maybe I'm dense, but I don't get the premise of this scheme.

Pot shops make lotsa money, but banks won't allow pot shops to open business accounts, so pot shop owners have no place to safely store money (and conduct normal business banking activities like credit, payroll, etc.). So, pot shop owners now flush with cash go buy expensive cars at auction to then sell via auction in another state, thereby laundering the money.

OK, but now the pot shop owners still have bags of cash with no where to put it and no bank willing to extend them normal business banking accounts. How does that solve the banking dilemma of the pot shop owners? Where are they going to put all this money, still? The money is now in the name of the pot shop owner, as opposed to the pot shop, itself? What's the IRS going to do when they notice that transaction?

Instead of all this hassle, why wouldn't the pot shop just be able to dole out the money to the owner as profit (like any other business) and let the owner deposit the money in a private (not business) banking account?

[911SauCy]

I have some very, let's say, personal connections to the DEA.

Noah930, you used the right term, scheme.

As I've had it explained to me, this "legal" selling of pot along with all of these other strange stipulations regarding income and taxation, is the most high level of organized crime, which happens to be government regulated/monitored...

[herr_oberst]

Originally Posted by sammyg2

What's legal in a particular state may not be legal in the UNITED states.

Just because colorado says it's OK doesn't mean the feds can't swoop in and take all that drug money away from the dealers.
As they should (IMHO).

Yes! MORE government involvement in our lives, please!

[tabs]

The oldest money laundering scheme of them all is paying cash for everything.

[legion]

I think, if true, this says more about the mentality at Mecum than about pot shops in Colorado.

(IIRC, anything purchased with illicit drug money can be seized as well--with almost no proof.)

[group911@aol.co]

Originally Posted by 911SauCy

I'm no accountant, but doesn't this mean if they aren't claiming it or it's not being accepted, thus not tracked by the Feds as income then you're also not paying taxes?

Oddly enough, it's fully taxed and allowed to be paid in cash.

[Nickshu]

Originally Posted by herr_oberst

I get that. I just don't get why they keep saying laundering. These pot dealers made their money on legal pot. The money is legit. They aren't trying to hide it, they just need somewhere to put it and hopefully get a dividend of some kind.

Laundering money by definition means the concealment of the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses.

We need a better term.

It's legal per the State of Colorado, but per the Feds it's not. Banks are insured by FDIC, which is Federal, not State of CO. Banks lose their federal backing if they accept money from anything that is federally legal, and hence they won't touch money from (or loan any money to) the "legal" pot business.