R is for Ricochet (Kinsey Millhone 18)

"Finally, deposits reached a level where the risks outweighed the benefits of doing business so close to home. Mr. Beckwith got nervous and decided to bypass the local banks and eliminate the paper trail. He acquired a Panamanian bank and an unrestricted banking license in Antigua, putting up the requisite one million in U.S. dollars as paid-in capital. He invested an additional five hundred thousand dollars for a second international banking license in the Netherlands Antilles, which doesn't have a tax treaty with the U.S. at this point."

I raised my hand. "A million and a half? Is it really worth that to him?"

"Absolutely. With his offshore banks, he can make deposits. He can write his own references, issue letters of credit to himself, all of this protected by complete privacy and with very little interference from the host countries. He doesn't even have to be there to handle management. Keep in mind, too, when people hear you own a bank, they tend to be impressed."

I said, "I'll bet." Cheney caught my eye fleetingly, probably thinking, as I was, about the banks his father owned.

Vince Turner paused and looked from Cheney to me.

I said, "Sorry. Go on."

He shrugged and continued as though his commentary had been recorded in advance. "By law, an American citizen is required to declare all foreign bank accounts on their yearly tax returns, but these guys aren't any more scrupulous about that than any other aspect of their business. Mr. Beckwith, under the auspices of the banks he'd bought, established an international business corporation, an IBC, in Panama, with shares being held in a Panama Private Interest Foundation, allowing him to avoid both U.S. and Panamanian taxation. With the shell company in place, he began to move currency physically from the States to his offshore havens. You move cash, Customs requires a CMIR – a Currency and Monetary Instrument Report – but Mr. Beckwith doesn't much care for filling out these pesky little government forms. No forms means no more violations, at least to his skewed way of thinking. Once deposited in one of his offshore banks, monies are returned to Mr. Castillo in the form of business loans with a twenty-year balloon.

"Of course, the transport of currency generates difficulties of a different sort. Bills are not only bulky, but weigh more than you'd think. The foreign markets prefer the smaller denominations – twenties and fifties. A million dollars in twenty-dollar bills tops out at over one hundred twenty-five pounds. Try toting that through an airport. Not a problem for our boy. The ever resourceful Mr. Beckwith leased a Lear-jet and now he flies suitcases full of cash to Panama every couple of months. Panama's currency is the U.S. dollar, so he doesn't even have to worry about the exchange rate. Between plane trips, he's been taking his wife on a series of luxury cruises, moving the cash in a steamer trunk that he keeps in his stateroom."

Turner polished off his bourbon, signaling the waiter for another round. "Anybody ever tell you how much money gets laundered every year worldwide?"

I shook my head.

"One-point-five trillion dollars – that's a one, a five, and eleven zeros – just so you get the picture. In the U.S., the figure's somewhere in the neighborhood of fifty billion, but we're talking about revenue that's never taxed, so you see how serious it gets."

Cheney spoke up. "How much can you tell her about the investigation to date?"

"Broad strokes? Four years ago the IRS, the DEA, the FBI, Customs, and the Justice and Treasury departments put together a task force to investigate gold and precious metals dealers in Los Angeles, Detroit, and Miami, all of whom we suspect are laundering money for a Colombian drug cartel. So far they've managed to place, layer, and integrate sixteen million dollars, running the cash through four businesses, using multiple accounts, at ten different banks, one of which has a branch here in town. Alan Beckwith is responsible for processing a substantial portion of that sum.

"Ours is painstaking work. We're still sorting out the particulars, developing as much hard evidence as we can before we make our move. The trick is not to alert him until we have all our ducks in a row. A U.S. District Court judge in Los Angeles and another in Miami have recently approved electronic surveillance. That's allowed us to monitor Mr. Beckwith's phone conversations. We've also obtained authorization to seize and remove trash from his home and business premises. Right now we have our merry band of agents picking through his garbage. They've found invoices listing fictitious addresses for nonexistent businesses, assorted handwritten notes, canceled checks, discarded typewriter cartridges and adding-machine tape. Mr. Beckwith has legitimate dealings with financial institutions on a number of fronts, and he's skilled at mingling the profits from illegal activities with the mundane business he does from day to day. What he's apparently unaware of is that financial institutions are required to save signature cards, account statements, copies of checks written for any amount over a hundred dollars. The banks also retain a transaction log of wire transfers, so they can properly account for funds passing through the system. The information is all coded, but it's possible to use the sequence numbers to identify the source bank, the target bank, and the dates and times the money was sent on its way. We don't yet have access to these documents, but we're putting together the necessary paperwork to subpoena bank records."