How does money laundering work in Ozark? Fact or fiction?
- Most of 'Ozark' revolves around money laundering
- The protagonist, Marty Byrde, launders money for the Navarro drug cartel through various methods
- This article examines these methods and the accuracy with which they are depicted
Season 4 Part 1 of Netflix's crime thriller, 'Ozark', was released on January 21, to the delight of fans who had been waiting with bated breath. Most of 'Ozark' revolves around the practice of money laundering for drug cartels, and this article dissects the same.
The protagonist, Marty Byrde (played by Jason Bateman), starts off as a Chicago-based financial advisor who launders money for the second-biggest cartel in Mexico, the Navarro drug cartel. Marty's business partner, however, is caught stealing from the cartel and is promptly eliminated, but Marty is spared on the condition that he repays the money stolen and continue laundering money for the cartel.
Also read | Ozark Season 4 Part 2: What to expect?
What is money laundering?
Money laundering entails processes that can make large sums of money from criminal activities, such as the drug trade, appear legitimate. The money generated from criminal activities, called 'dirty' or 'black' money, is laundered, to make it 'clean' or 'white' money.
How is money laundering carried out?
There exist a wide array of tools for criminals to launder their dirty money, and their arsenal of tools has greatly expanded with the advent of cryptocurrency. However, traditionally, money laundering has been done through cash-based businesses with large volumes of transactions.
Under the cash-based method, dirty money is usually inserted into the legitimate financial system covertly, by means of concealing the dirty money through the transactions of a legitimate cash-based business or through accounting tricks.
As a simple example, a criminal enterprise owning an eatery might inflate the daily cash sales of the eatery: if daily cash sales amount to $100 dollars, receipts may be fraudulently generated for $150 dollars, with the extra $50 dollars coming from dirty money. This money, $150 dollars, is sent to the restaurant's bank account under the guise of a legitimate transaction, and the $50 of dirty money is rendered clean and can be withdrawn legitimately later on.
Also read | Ozark Season 4: Characters to watch out for
Money laundering in Ozark:
In 'Ozark', following the murder of his former business partner, Marty relocates with his family to Missouri tourism hot spot, the Ozarks, in a bid to continue laundering money for the Navarro cartel away from the prying eyes of US law enforcement.
With $8 million to launder within a deadline, under the threat of certain death for himself and his family, Marty gets into cash-based businesses in the Ozarks. He quickly purchases the Lickety Splits strip club and the Blue Cat Lodge inn beside the Ozark lake, both of which are in need of renovation and have high operating costs.
Marty's purchase of these businesses allow him to launder the cartel's money in two ways. First, Marty can artificially inflate the revenues of both the strip club and the inn by physically injecting extra, dirty cash into their periodic earnings, which is then entered into the legitimate financial system as earnings of these enterprises.
However, there's only so much money that can be laundered using cash in a small business before it starts to look suspicious. Hence, Marty's second method of laundering involves fraudulent purchases. In the Blue Cat Lodge for instance, Marty places orders for goods and services - air conditioners, wiring, burger patties - all of which exceed the requirements of the place. He orders 25 air conditioners, but installs just four; he orders carpets far exceeding the lodge's built-up area, wiring that is never completed, and far more burger patties than he can hope to sell.
These orders are placed with vendors that are owned by the cartel, who help launder the money. So, for example, if Marty places an order for 25 air conditioners at $500 each, that comes to $12,500. He gets four installed, which costs $2000, while the extra $10,500 paid to the vendor is laundered by the cartel as a legitimate income from the sale of air conditioners.
Also read | 5 shows to binge if you love Ozark
Yet, even then, the volumes of dirty money that a cartel generates cannot possibly be laundered via small cash-based businesses. It is for this reason that Marty, later on in the show, goes on to purchase a riverboat casino. As a cash-based business that sees large volumes of cash flow every day, the casino serves as the perfect front for laundering money at scale. Marty even hires ringers and supplies them with cartel cash so they can pretend to be gamblers and lose money to the casino, which then becomes legitimate income for the casino, thereby allowing for large volumes of money to be laundered on a daily basis.
The attention to detail is indeed praiseworthy in 'Ozark': the show not only explicates how Marty launders his money, but also informs viewers of the steps Marty takes to cover his tracks. Marty channels money through a series of offshore shell companies in Panama and elsewhere, none of which bear the name of a real person. Channeling funds through offshore accounts beyond the jurisdiction of US authorities and then bringing the money back into the US as legitimate funds allows the money to be withdrawn legitimately without suspicion.
As Marty, the brains behind the operation, explains, "Okay, money laundering 101. Say you come across a suitcase with 5 million bucks in it, what would you buy? A yacht? A mansion? A sports car? Sorry, the IRS won’t let you buy anything of value with it. So you’d better get that money into the banking system. But here’s the problem, that dirty money is too clean, looks like it just came out of a bank vault. You gotta age it up, crumple it, drag it through the dirt, run it over with your car, anything to make it look like it’s been around the block. Next, you need a cash business, something pleasant and joyful with books that are easily manipulated, no credit card receipts, etc. You mix the five million with the cash from the joyful business, that mixture goes from an American bank to a bank from any country that doesn’t have to listen to the IRS. It then goes into a standard checking account and voila, all you need is access to one of over 3 million terminals because your work is done. Your money is clean. It’s as legitimate as anybody else’s."
Also read | Ozark Season 4 Part 1: Ending explained
Is 'Ozark' an accurate depiction of money laundering?
'Ozark' is a television series meant to entertain first, it is not a guide to the illegal activity of money laundering. That being said, despite certain creative freedoms taken by the show, the depiction of money laundering in 'Ozark' is certainly plausible and indeed creative.