Quora Answer: How Realistic a Portrayal Does Ozark Do of a Cartel Money Launderer?

The following is my answer to a Quora question: “How realistic of a portrayal does Ozark do of a cartel money launderer?” 

I watched a few episodes.  Whilst the human drama is compelling, their portrayal of money laundering is unrealistic.  Of course, I can understand that they do not want the show to be a tutorial on placement, layering, and integration. 

Firstly, money laundering is best done in a place with high movement of funds such as New York, Singapore, or London.  In all that bank movements, it is easier to conceal the movement of illicit funds.  Large amounts of money in the middle of nowhere are far too obvious, and easily flagged. 

Secondly, for large scale money laundering to work, there has to be a legitimate reason for funds to be there.  Property development, large investment-linked insurance policies, trading, and logistics businesses and restaurants are the best ways to layer and integrate funds, and keep it reasonably liquid so that they can eventually be used. 

Thirdly, money laundering is not a one-man job, as the show premised, or even a couple job.  It involves a team of high calibre lawyers, tax accountants, forensic accountants, investment bankers, fund managers, and insurance advisors.  It involves a high net worth network with access to the sort of large-scale projects which would allow the movement of billions of dollars across borders.  Money laundering shenanigans include using WOFEs out of Hong Kong, revolving letters of credit, construction projects that never seem to finish in places like Bangkok, ledger to ledger transfers in banks, and portfolio prices on major insurance policies assigned to entities such as trusts and companies with multiple levels of ownership. 

It is complicated because it is worth it.  The going rate for fund movements begin at 20% of principal.  For those who are especially desperate, it goes up to as much as 40%.  The 1MDB is unusual in that for a money laundering exercise involving such connected individuals, they got caught because they got complacent, cocky and careless.  Mohammad Najib bin Abdul Razak is not the sharpest tool in the shed, and his inability to listen to the experts he hired lead to the entire edifice unravelling. 

Money laundering involving vast sums of money happens all over the world, and it is impossible to be a financial advisor to high net worth and ultra-high net worth individuals and not get enquiries.  There are seasons for this.  For example, when Barisan Nasional lost to Pakatan Harapan, there were enquiries by people who suddenly needed to move assets overseas.  When Congress lost to BJP, there were enquiries for funds stuck in India and Dubai.  And when there is another change of government elsewhere in the world where the system is corrupt, there will be another series of enquiries. 

Cartels are in bed with certain politicians and parties in different parts of the world, and are affected by this as well.  However, because they are used to moving funds quickly and illicitly, they simply make adjustments, and the financially savvy will notice certain funds and counters increase or decrease in value that is out of step with the market, or when certain currencies move contrary to market expectation and current account relative to the USD.  Even an economy as large as Singapore, you cannot simply move more than a billion USD in a short period without skewing the exchange rates slightly.  Pin-pointing the exact source and fund owner, however, is like looking for a needle in a haystack.