TRADECRAFT 101 PART FIFTEEN; MONEY LAUNDERING THROUGH THE HOARDING OF PRECIOUS METALS AND VALUABLE STAMPS AND COINS

Even the most skillful career money launderers know that there is an ever-present risk that their clients' cash on deposit in the global financial system is always at risk of seizure and forfeiture, even when artfully cleaned. They therefore often recommend to their clients that they, like smart businessmen everywhere, diversify their risk by holding a significant percentage of their illicit wealth outside the financial system, preferably in liquid forms that could be redeemed rapidly, should the need (like arrest, for instance) arise. Even criminals are inclined to engage in risk management. 

Inasmuch as criminal defense attorneys have found themselves in serious professionals, as well as legal, trouble by accepting funds, for the express purpose of being prepared for their clients' potential future arrests, the clients are often instructed by their laundrymen on specific methods to accomplish the "diversification" of their holdings, outside of their attorney's knowledge. Also, if the lawyer has any personal exposure to criminal charges, if he or she knows where the clients are keeping their "rainy day" assets,  there might be a seizure and forfeiture if he becomes a Cooperating Individual (CI), in exchange for immunity from prosecution. 

Whatever the medium chosen, gold, silver, precious gems, valuable coins or even rare collectible postage stamps, it must (1) be portable, (2) be traded in an industry where cash is king, and records scant, for tax evasion reasons, and (3) where provenance (origin) of the items is not an issue. In Europe, the unique and very private storage facilities often set up to warehouse fine art and antiques can be utilized, so long as proper shell companies as putative owners is set up in a favorable jurisdiction. 

I once had a client who, having once been shot and left for dead, got out of the drug business, and who owned a business that sold extremely valuable coins to the public. He learned that one of the area's biggest cocaine traffickers, who was a regular client, was secreting his purchases by literally burying them in the rural backyards of his many girlfriends, in the dead of night, sometimes without their knowledge and consent. Unfortunately, he at one point had a falling out with one of them, and she knew about his stash out back. She gave that information to law enforcement, and received a six figure sum for her assistance.

Some clients use their portable assets as "working capital," transferring it to other criminals in payment for illicit purchases as there is absolutely no connection to the financial world, but most of them hold on tight to these assets, in the event that things go south at a later date. They do represent a vulnerability to the client if seized, for there is not way that they can account for Source of Wealth, and they generally end up forfeited. 

Inasmuch as such assets are intentionally kept outside the banking system, the only time that compliance officers encounter them is when the buyer of the goods from the trafficker, often a legitimate commercial dealer in that type of goods, cleans the sale proceeds, and delivers a check to the seller, who may claim that he acquired the items through family, or that they appreciated due to demand, such as rare coins or stamps. Should you see such a large check in the account of a bank client who previously did not maintain such an impressive balance, institute enhanced due diligence forthwith. Cleaned proceeds of crime often do not survive intense compliance scrutiny.