"recklessly engage in money laundering."
It seems to me that he was calmly and thoughtfully engaging in money laundering.
Police in the Australian State of Queensland have arrested a man they say set up bank accounts to collect ransoms from victims of tech support scams, and funnel funds to scammers. Queensland Police say the 75-year-old man “ fraudulently set up three Australian companies, JC Enterprising, JC Web Creations and ITZ Services …
When legitimate businesses who offer this service are going out of business.
"The scam appears to have been lucrative: Police allege the man “transferred funds in excess of AU$1 million [US$760k) to a number of overseas entities” over the three years he ran the dodgy companies."
“fraudulently set up three Australian companies"
How would one set up a company fraudulently? I suppose one could use a false name. Otherwise one could legitimately set up the company even if the intent was to use it fraudulently but deciding on intent would be a matter for the courts to decide. Without evidence to the contrary it's entirely possible that this bloke thought he was being offered a genuine business deal.
The police wouldn't be trying to prejudice the trial would they?
Perhaps this Ozzie chap was genuine and thought he was just the local rep for a tech support company in Asia or wherever they are based so he set all the companies up using his real name and address. The scammers are obviously quite clever and probably had flashy looking websites genuine phone numbers for him to call etc and could fake official looking documents to make it all look genuine.
I mentioned a similar thing on another post a few days ago where people are duped into selling goods using their own ebay account from drop shipping companies and the ebay sellers get to keep 50 quid per item for everything they sell. Obviously when the goods don't arrive with the customer the police come tracking it back to the ebay seller. These scammers rely on people being a bit naive and also out to make a fast buck.
Every time I get professional advice or make a financial transaction some one pays, sometimes it is me. I am a technophile, I hang around on the Register and other tech forums. I know the pit falls of acting as a conduit for someone else’s money.
However if I wanted money, or needed it because I was poor with children say, an offer to share the commission that would otherwise be paid to a rapacious bank may persuade me to help the "law abiding company".
Yes, if it is too good etc is a good maxim to assess any offer but those not equipped (knowledge, morals, intelligence) to do so may fall into a trap. I would like to say that banks have some responsibility here but nothing sets me off like my bank, after an over 45 year relationship, doing it best to stop me getting at my money because of money laundering rules.
Anyone who owns more than one company has fraudulently set up a company in my opinion , but not the law's opinoin. The way I see it the only reason you'd have more than one is so that you get more chances to go bankrupt, leaving honest suppliers / customers in debt .
This scam ranges from the corner shop owner with a couple of small businesses , to multinational conglomerates of "holdings" and "groups" , often these child companies themselves are multi company companys.
The way I see it if a company goes bust any brother / sister / parent companies should be on the hook until debts are paid.
I have to politely disagree there mate. That is exactly what Limited companies are for.
If you set up a company to sell IT equipment, and it's ticking over nicely - to the extent that you don't need to input more than a few days a year - then you may find twiddling your thumbs a little boring.
Now let's say, you think to yourself "I don't think I can grow that anymore, diminishing returns and all that, but I reckon there is another market I can pursue in cleaning peoples houses."...
Why jeopardise the payments/deliveries to the suppliers/customers of the IT equipment company by taking on additional risk that is nothing to do with that revenue stream?
Set up another business! Then if a cleaner goes berserk and steals millions of pounds of someone else's property/kills someone/whatever - to the extent that your business insurance will not cover the damages, the cleaning company is rightly responsible - but not the IT equipment company. (<you can see I have no idea what companies a liable for, but I think the point stands)
There are infinitesimally small risks that something horrendous might happen in one line of business that destroys it (and larger risks, obviously). Limited companies exist for that reason, perfectly legally and perfectly logically.
The fact that you are responsible for two things does not make those two things responsible for each other. For example, if the EU decided (and was able) to fine Google 100,000 times it's annual revenue because of it's practises in the EU - the American/Global business would have to fold completely so that the EU is paid. That's a nice money extraction mechanism, but I think limited risk is more sensible.
p.s. I don't own/operate any businesses :)
"The way I see it the only reason you'd have more than one is so that you get more chances to go bankrupt, leaving honest suppliers / customers in debt."
OK, let's try and think of a few reasons.
1. You have business A, say a shop. You have some spare money and decide to start up a second line of business B, say student flats. Both are going well but you decide that in future you just want to concentrate on B. If you have them in the same company then all you can do is close the shop, sell the stock and give up the lease (or sell the property if you actually own it but I think rental is more common). That doesn't really give you the value that the shop has as a popular local business. If A and B are separate companies then you sell company A as a going concern which rewards you for the effort you put into building it up.
2. You have a simple but successful small business, A. You then decide to branch out into something which has a much more complicated regulatory regime, B. Do you really want to impose the regulatory regime of B on A? You might unless they're separate companies.
Builders (here in the US of A) do this all the time. They create an LLC, which builds a bunch of houses, then liquidates itself. The benefit to the builder is that once the houses are occupied, there is no one to sue, should something unfortunate happen (drains collapse, road needs paving in 2 years, etc. There may be some nominal legal restrictions on how long liability lasts, but they don't keep the LLC extant for any longer than the statute requires.
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