The bank would report it, and in theory the feds could track down Periwinkle LLC.
But tracking down holding companies consumes precious resources, and would be strategic, not just legal, decision.
The US is obsessed with having a clean financial sector, but doesn’t care one jot or tittle about corporate transparency.
Better to make finance focus on ensuring there are quality, documented links where legally required... and then perform the judging elsewhere (e.g. legal system, FBI, journalism).
That the US (and especially certain states) permits opaque corporate structures is a different problem.
(1) is probably not good for that country, but do other countries care? To some extent, this is just colonialism by proxy: extracting wealthy inequitably from a foreign country. Historically, few third party countries take issue with that, when they're the winners.
(2) is where the more interesting point is. Does the country accepting the money net benefit, or net loss? Aka the London banking question in a nutshell.
I'd argue that if money is political power (it is) and corrupt money can't be firewalled (it can't), then it's net loss.
Inevitably and especially if we're talking lifestyle roots (e.g. property, establishing a home, etc), that corrupt money corrodes government and civil systems in the banking country. At minimum, because the wealthy corrupt people bring their expectations and behavior with them!
In practice though that’s exactly what happens. Banks have to look for transactions that are potentially illegal (including OFAC and AML). And the banks not only report but have to block some of those transactions or they become liable for the initial crime (if it existed at all).
And 9x/10 when you track down Perwinkle LLC you'll find that it's owned by a couple American brothers who own a successful regional HVAC business and everything they are doing is legal.
People love to act as if all this offshore stuff is frequently closely connected to illegal things but if you just randomly pull samples you'll be hard pressed to find anything that isn't just a case of someone completely legally doing what the law incentivizes.
There was a minor scandal a while back when it became clear Queen Elizabeth was using exotic techniques to hid her assets.
She wasn’t doing anything wrong. She just didn’t want people conflating her private assets with her royal persona.
Even Jeremy Corbyn (socialist, republican, then-head-of-Labour) didn’t criticize her for it.
She just didn’t want the public snooping in her private business.
I got a "no-doc" non-conforming FHA loan back then. They fucking strip searched me. It was not easy--I still have PTSD from it. That same loan is still available on the market.
You also need a citation on your reason for the financial crisis of 2008.
I had to walk away from my home BECAUSE of the financial crisis (after having paid down 90% of the principle). Was it triggered by defaults or the credit default swaps themselves? Sure, maybe some bad loans were floated,but the sophisticated, hot off of the regulation preventing it, people in New York started gambling on the plebs losing their homes. Well, a few plebs (really, over-leveraged affluent people) lost their homes, and a cascading effect of credit default swaps came due and spun out of control. The crisis was directly caused by Bill Clinton signing a bill that removed key regulation that would prevent the very thing that happened: Gambling on Wall Street.
So STFU.
It's unreasonable to blame one source for something that metastisized over years, involving most parties in the financial sector, until exploding.
Banks could have chosen not to do this business or to hedge their risk in a better way. Credit ratings agencies could have shown some independence and objectivity. Derivatives buyers could have done more due diligence on what they were buying. Home buyers could have looked at the market and said "This is way too hot, and the party can't go on forever."
Deregulation handed everyone rope, including us, and we all hung ourselves.
It stings when you get personally @+$#ed, and it feels good to blame massive, systemic failures on one source, but they're systemic failures for a reason -- because the entire system was culpable.
This is a general comment, nobody is saying every bank required zero documentation.
> I got a "no-doc" non-conforming FHA loan back then. They fucking strip searched me. It was not easy--I still have PTSD from it
I cannot imagine how bad some forms and id checks would have to be to give me PTSD.
> So STFU.
Not useful.
But insurance doesn’t have “know your customer” like banking.
If a customer commits a crime, we just don’t renew (unless we do). If a customer commits a crime and expects us to insure the criminal act, we refuse (unless we don’t).
Mortgage companies can issue small print dealing with much of legitimate financial uncertainty. Most mortgages require several types of insurance (title insurance, home insurance, and mortgage insurance).
If the financial strip search was about underwriting, it could be done in a way that didn’t require tons of paperwork from the customer.
But it’s about complying with “make sure your customer isn’t a criminal” laws.
What is this an example of? You are submitting a financial strip search because the lender wants to ensure the borrower can pay the debt, not to ensure they are a criminal or not.
And that is because prior to 2008, lenders were giving out loans to people with zero underwriting, hence the cascading defaults, and then financial crisis, which led to more regulations on proper underwriting.