The Connect- with Johnny Mitchell - This Is Exactly How You Should Launder Money | Ep #3

Episode Date: October 6, 2022

Johnny breaks down exactly money laundering works, describes his failures as a drug money launderer, and explains the best ways to launder money and the ultimate goal of being a gangster. Learn more about your ad choices. Visit podcastchoices.com/adchoices

I said, oh, fuck. My mom had just thrown away 40 grand in drug money. The legitimate world colludes with the criminal world to hide and clean up money. When you look at the most successful gangster families in this country, it all traces back to illegal money. This was my shot to build dynastic wealth. Hey, what's up you guys? Welcome back to The Connect. My name is Johnny Mitchell.

Before we get started, go ahead and hit that subscribe button and turn on your alerts. so you get notified whenever we drop new content. Of course, follow me on Instagram as well at Mr. Johnny Mitchell, and be sure to leave us a comment. All right, let's get into it. So in this episode, we are going to be talking about money laundering. Now, I told you how I made my millions shipping pounds of weed to the East Coast. I got about 1,000 pounds there in a little under 18 months.

Almost all of them made it through. It was the money getting sent back to me that ultimately led to my downfall and arrest. We're going to be talking about how most drug dealers launder their money, how I did it, and what I learned is the best way to do it from talking to people in prison, from my own failures, and just seeing the inner workings of law enforcement and how they come after drug dealers cash as hard as they come after the drugs themselves. Money. It is the most important part of any business, and especially the drug business. And authorities know this. And that's why it is now policy for them to come after

and seize drug money as aggressively as they go after drugs themselves. That's because they know that if a drug organization loses all of their money, they can't go get a loan to float them as they try to get back on their feet. You know, drug dealers can always go get more product, but if a package of a million dollars gets seized on its way back to the drug seller, that could put them under for good. So money is just absolutely crucial. And it's crucial. that it gets laundered in the appropriate ways. What is money laundering? Money laundering, you've heard about it

in every single drug documentary, you've seen Netflix shows about it. To make a long story short and to put it in layman's terms, it's taking illegal money, money that was earned through illegal means and making it legal or making it look legal. The only way to win as a drug dealer

or as any kind of criminal is ultimately to quit and to quit while you're ahead. It's like playing the casino. You gamble and you make as much money as you can and you get up with your chips and you walk away. Because every single element of society, all the resources of the government are in place to stop you. And you are usually just one individual. So you've got no chance long term of staying out of prison when you are a high level drug dealer. So the way you win is by stashing your money away.

So when you do get arrested or you decide to quit, there will be something left over for you to pick up and go legit when you get out. So the way the big guys do it, the international drug cartels, the kingpins, the Colombians, the Mexican cartels, the Italian mafia, who is big players in the drug business, the Andran Geta, the Calabrian mob out of southern Italy, they're the biggest drug importers in Europe. So they get their Coke directly from Colombia and distribute it to the rest of Europe. So these guys are bringing in billions, literally billions of dollars a year in drug money. So how can you possibly clean all that money up? There's only so many laundry mats you can buy, right? So they have armies of lawyers, accountants, they corrupt bankers and other finance people, and they create shell companies and they use layers of different professional people, legitimate people to bounce their money all over the world using wire transfers and phony businesses.

And they move their money into countries where there are very lax money laundering laws. So the islands, Kurosau, these obscure places in the Caribbean. Panama is a big one. We've all heard of the Panama Papers, that big scandal that Netflix did a documentary about a couple of years ago. It was about how the biggest banks, HSBC is the famous one that, huge international bank was fined billions of dollars because they were found to be colluding with drug traffickers to clean up and hide their money. London, England is a huge money laundering

capital, which surprises a lot of people because it's a first world European city, but that is one of the biggest places where Russian oligarchs hide their oil money and where drug traffickers go to hide their drug money. And everybody's in on it. I could go do a two-hour episode about the way that the legitimate world colludes with the criminal world to hide and clean up money. But how does a guy like me, a middle class drug dealer, right, a guy who's got a couple of million bucks or even a couple hundred thousand bucks who's not connected to a big international drug cartel who's basically just a small business? How does somebody like me go about laundering their money? Well, I had a few ways of doing it. And admittedly, I was not the most sophisticated with it.

Obviously, a lot of my money got seized, and I did not have an opportunity to clean it up and invest it in ways that I wanted to. But a few of the methods were Las Vegas. I would give a couple of buddies five to $8,000 in cash, and we would fly to Vegas for the week. weekend and we would go purchase chips in the casino. So if I gave a guy $8,000, he would go purchase $8,000 worth of chips and he would maybe go gamble away $2,000 of it, right? And then he would take

$6,000 worth of chips or maybe he would win some, right? And I would let him keep whatever his winnings were, obviously. He would then go cash out the $8,000 worth of chips at the box office of the casino, and then he would give me the receipt and the check for it. And then I would actually go deposit this into my bank, and I would have a paper trail. Because the idea is you want to get your money into the bank. You want to have a paper trail. You want to be able to explain how you got this money and how you got it in a seemingly legitimate way. So that was one of the ways. Another big one for me was buying small ticket items like jewelry, sneakers, and clothing. I would pay for it in drug money, right?

Cash. I would buy sneakers from a sneaker store retail. I would buy jewelry from friends who had it or jewelry stores. And I would buy clothing off the rack. It didn't really matter. You know, anything under a thousand bucks, right? I would buy a couple of leather jackets. Then I would actually post and sell them online.

And the money that I got was obviously digital. And it went into a bank account. Then what I did was created a company, an LLC. And it didn't matter what this LLC was. It just was a way for me to declare income. So then I would get that money and pay taxes on it. Now it looks like I have $10,000 in the bank that I could actually declare as income to the IRS. That was another way that I cleaned my money up.

And frankly, if I had had more time, I would have really probably cleaned up most of my money in this form. Now, of course, would it have been possible for the IRS, for the DEA, for the FBI if they looked into me hard enough to say, wait a minute, he's selling $20,000 worth of sneakers every month and paying taxes on that? But where did he get the money in the first place to buy those sneakers? For sure. And I would not have had an answer for that. That's why if anybody is thinking about laundering money, it's imperative that you're not actively doing the crime, which, got you the money in the first place. Because then, yes, you could get a fine, you could get even charged with some kind of tax evasion or money crime, but there's no way if you're not actively committing other crimes that got you that money, that the law can tie those two together and put like a big RICO case on you because then you're really fucked. And the third and probably

best way to launder your money is through cash gifts. And this is something I should have taken advantage of way more when I was a drug dealer is the cash gift. So this means that somebody can give you a gift in cash of up to $16,000 annually. So without declaring it too. So that means you could have 10 friends that all give you a gift of 15 grand and you've just cleaned up $150,000 right there. So again, I could go to my mother and give her $16,000 in cash. She could write me a check for 16 grand, and then I can go put that in my bank account legitimately. And I would probably declare it, too. Even though there is no tax burden on it, I would drop it into an LLC or my S-Corp, or whatever vehicle I'm going to use to then make that cash look even more legitimate. The other reason

that Gifts is such a great way to launder money is that because it's money that doesn't have to be declared by the person who's gifting it to you, if you are doing dirt and you get jammed, and you get up and arrested, you've got money that's now being held legitimately that it would be much harder to tie into whatever kind of criminal operation you're conducting. So in other words, if your friends and family gift you $150,000 in one year, that is completely legitimate. And it's not something that they have to declare. So therefore, if I'm an IRS or a DEA agent, I can't go to them and legally

lean on them and press them as to how they got that money that they gifted you. That's against the law and something that a good lawyer could beat back. Now, this is something I wish I had taken advantage of way more when I was a drug dealer, but unfortunately, I just didn't know enough at the time. I was 23, 24 years old, and I was kind of just learning on the job, you might say. I was also not surrounded by a bunch of criminals or people who were willing to commit money laundering with me, who were willing to accept a bunch of drug money knowingly and then give it back to me in the form of Akashya. So therefore, it took me a lot longer to clean up my money. And I had to hide a lot of it in the meantime in really kind of precarious, sketchy places. I would hide it in my mother's

garden. I would dig up her rhododendrons, make a big hole, and then that, and then put $50,000 wrapped up in plastic and duct tape into the hole, cover it with dirt, and put the rhododendron back on it. I would put it in my parents' attic in their house. I would put $100,000, $200,000 here and there into safe deposit boxes in my bank, right? Which is something you never want to do because, of course, even though it's not technically in your bank account, that's fair game for law enforcement to seize. So if you hide money in bank accounts, you always got to have it understableness. somebody else's name. I would put money in duffel bags and stash them in the trunk of old junk cars

and have them parked around the block from where I lived. I was constantly on the run with it. And it makes it very hard to sleep at night when you know you have hundreds and hundreds of thousands of dollars just kind of out there in the world. I remember one time I had like 40 grand in cash and I was genuinely out of places to stash it. So I went over to my mother's house one day when she was not home, and I took the money. I wrapped it up as I did in plastic and then duct tape and I put it in a big trash bag and I went up to her bathroom and I kind of just stuffed it behind the cleaning products underneath her sink and I said, okay, I'm going to come back in a couple of days and pick it up and bring it to wherever I was going to stash it. I just needed to think of somewhere. So a couple of

days later I come back, tell my mother hi, I go up to her bathroom. I reach behind the cleaning product and the garbage bag's gone. So I ask her, hey, mom, was there a trash bag you found underneath your sink? And she goes, oh yeah, I threw that out yesterday. Memorial Day weekend is almost here, and it's time to kick off summer right.

When I'm getting ready for the first big weekend of summer, total wine and more is my go-to, especially when I'm firing up the grill with family. I'll grab refreshing beers, easy-drinking wines, and some hard seltzers for the cooler. And with everything that goes into summer, it's nice knowing you're getting the lowest prices. Total Wine and More. Your Memorial Day made easy.

Shop total wine and more in store or online. Spirits not sold in Virginia and North Carolina. Drink responsibly must be 21. I said, oh fuck. When was Trash Day? She goes, it was this morning. They already picked it up. My mom had just thrown away 40 grand in drug money.

that was being driven off to some landfill as we spoke. And I couldn't blame her. It was just part of the game. I had so much money. And of course, I was pissed off. But, I mean, look, that's one shipment. The point is, it's a very dangerous thing to be sitting on so much cash. If I could have done it over, I would have put it in a treasure chest and buried it all in one place.

But that's history. What are you going to do? I was learning as I went. So cut to the day when I get arrested. The cops had traced the package of money that was coming from the East Coast, which a drug-sniffing dog had alerted them to at the FedEx sorting facility. So I'm in handcuffs and they're doing their due diligence. They're searching for clues. They find about 100,000 at the residence, the apartment that I was staying at.

I always kept some getaway money right next to my bed and a safe. I just liked having cash next to my bed. It helped me sleep good. So they found all that money and they knew they were on to something and they found codes and addresses to banks where I kept money in safe deposit boxes. They also went over to my parents' house where they were able to seize not all of the money, but a good chunk of the money. So at the end of the day, they were able to locate over a half a million dollars in cash simply because I was getting sloppy with it because I had so much money that I had. that I was not properly laundering. So ultimately, I was indicted and forced to plead guilty to actually not a drug charge,

but it was money laundering. That was the crime, money laundering and conspiracy. And I ended up getting sentenced to prison. So, of course, while I was in prison, as every criminal will tell you, they spin their wheels day after day after day thinking about what they could have done differently. You also spend a lot of time around career criminals. And that's where I got a master's degree in how to launder money. And that's really why I'm the most qualified to talk about laundering money.

People are always like, well, John, you lost all your money. How could you be in the position to tell other people how to do it? That's precisely why, because I failed. You learn the most from failure, and you learn the most from being around failures, and everybody in prison is a failure. That's why they're in there. That's what prison is. It's, oops, got caught.

So if I could do it over again, this is what I would do. Not only would I utilize the cash gifts, which I talked about previously, I would get involved in cash businesses right away. So I would open a pizza shop, a shoe store, a clothing business, a bar, and I would give my friends and people that I knew money, drug money. I would give a bunch of my buddies, $10,000 in cash, and I would say, come spend it at my joint, come spend it at my store, right? I would then keep the receipts from the purchases they made at my business. Boom. Now I'm paying taxes to the IRS. Now I'm in the system.

Now I'm legal, right? So I would use these cash businesses as the first step in taking dirty money off the street and starting to clean it up. So now what I want to do is keep pushing the money further and further away from its origin point, which, of course, was illegal. So I would take that money from the cash business that I run, and I would then use it to purchase a piece of real estate. Say I want to do make a down payment on an apartment building, and I had 50 grand that I had received and declared to the IRS, and I would put a down payment on a fourplex. Now I've created another layer of legitimacy around me. You sell the real estate, and now you have more legitimate income to declare. And maybe you take this money and you purchase a home out of the

country and you just keep building layers of protection around yourself. So again, the government, the IRS, the FBI, at the end of the day, these are just organizations comprised of human beings. The harder you make it and the more layers you put between yourself and the dirty money, the better off you're going to be and the better chance you have of avoiding detection. And these agencies obviously operate on budgets and they need to produce results. So unless you are a very high profile dealer with a target on your back, you have a good shot of slipping in under the radar if you can bring in money off the street and little by little incrementally start creating layers around it. You look more legitimate and you're building equity because of course the idea is not just to quit while you're ahead. the idea is to make your drug money work for you.

And I know that sounds so funny, but wealthy people have money working for them. Most people work for money. The wealthy have assets that are building wealth and making them money all of the time. Passive income. That was my whole goal. I knew this. I knew what a great and unique opportunity I have by sitting on all this money. I knew that this was my shot to build dynastic wealth.

And if you look at the history of this country, I'm talking about the Roosevelt's. I'm talking about the Kennedys. You can trace their origins of their wealth back to drug dealing with the Roosevelt's. It was grandfather Roosevelt. It was Teddy Roosevelt's grandfather, who was a big time player in the opium trade during the Chinese opium war. of the mid-19th century. They made a lot of money, and it built a dynasty.

It created a family of oligarchs that we know as the Roosevelt's. The Kennedys, of course, you go back to Joe Kennedy and his mob ties and his rum-running and bootlegging during the prohibition of the 1920s,

was able to build an empire that still really persists to this day. So that was my thinking with it. It was not only cleaning up the drug money and creating layers between myself and the street life, it was using that to buy businesses in real estate and equity that would create sustainable, legitimate wealth well into the future so I could have something to pass on to my kin. And that is the goal of a gangster. At the end of the day, it is to not be a gangster.

That's what most people don't understand, is that real gangsterism is not the end. It's a means to an end. And when you look at the most successful gangster families in this country, it all traces back to illegal money. I think that's a quote from a famous philosopher behind every great fortune is an even greater crime. I think Balzac said that or something. And even if you look at a lot of the Mexican cartels, their children are doctors and scientists and chemists and business people. And they have almost completely assimilated into legitimate society to where they're almost not even criminals anymore. Now, of course, a lot of them like El Chapo's son, choose that gangster life, but that's ego and that's because they grow up privileged and they think it's cool.

It's not cool. The coolest people are the ones who you never hear about who get away Scott Free and turn that illegal money that originated from the street and use it to create a whole. other life for themselves and to move themselves up in the class structure. So that's ultimately the point of money laundering. It's to allow yourself to get out of the game. At the end of the day, money laundering is a privilege. If you were in the position to launder money, that means you have had some success in the drug game. The vast majority of drug dealers on planet Earth are doing it out of sheer desperation because they have no other choice. They're literally doing it as a way to put food on their table and they will never ascend high enough in the business to even have enough money

to launder. You know, it's like the Scarface line when Tony first meets Frank. Then you want to find out your biggest problem was not bringing in the stuff. What to do with all the fucking cash? I hope I have that problem. Now, I didn't have a chance to implement all of these money laundering strategies because I got arrested too quick. But if I had to do it again, I'm confident that I have the knowledge and the experience to launder my money correctly. And I want to be clear, if you sell drugs at the level that I was doing it or higher, and you do that enough, you're going to be arrested.

You're going to be caught. It's in inevitability. The state, the government just has too many resources dedicated to going after people like that. You're at the casino long enough. The house always wins. So the idea is to stack your chips and put them away. so after you're arrested, you do your time and you come out, you don't have to go back to that life. It's like a drug dealer's 401k plan.

You put it away, and by the time you get out and you want to retire, you're able to. And it's built you enough wealth to where you never have to go back to the game. All right, so that's been today's episode. Thank you so much for tuning in. Make sure to like and subscribe to the YouTube channel and turn on your alerts so you can get notifications whenever we put out new content. And of course, follow us on Instagram at Not the Connect. And then my personal Instagram at Mr. Johnny Mitchell. I am a stand-up comedian.

So if you want to come out and see a show, go to my website, johnnymitchellcomedy.com. I put all of my updates for my live shows on there. And I hope to see you soon. We'll see you next week with another episode of The Connect.