Tax Guru-Ker$tetter Letter

Thursday, May 18, 2006

Money Laundering?

I received the following from a Texas CPA in response to my earlier post on helping a friend (caps were his):

Subject: MONEY LAUNDERING

HI KERRY, [RE: BELOW]

I USUALLY CONCUR WITH YOUR ANSWERS AT LEAST 90-95%, BUT THIS QUESTIONS CONJURED UP VISIONS OF MONEY-LAUNDERING IN MY MIND. ESPECIALLY IF THEY WANT TO PAY IN CASH, AND GET BACK A CHECK, OR CREDIT FOR SOME THING THEY WERE GOING TO PAY LATER ANYWAY. BESIDES, IT JUST SOUNDS TOO GOOD TO BE TRUE. [AND WE KNOW WHAT THAT MEANS].

HAVE A GOOD ONE.

My Reply:

You're correct that this was intended to be a form of money laundering.

However, I felt what was more important for my client to understand was the real underlying substance and motivation for the transaction his friend was proposing. That was obviously to mislead the leasing company and obtain cash under false pretenses, which would have implicated my client even though he wasn't going to be keeping more than a small fraction of the money.

Luckily, he took my advice and turned this deal down. He didn't say how well his friend accepted that decision.

Thanks for writing.

Kerry Kerstetter

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 5/18/2006 09:07:00 PM Send this post: