Matthew Cox

I can speak from personal experience in Los Angeles, was just principally a money laundering venture.

Whether it was two popular nightclubs in Beverly Hills, there was one on the Sunset Strip, there were at least two down in Newport Beach.

They're just all pushing through money.

The reason why the nightclubs are really, not only because it's a cash-intense business, but you'll notice a club will have a two-year run or three-year run, then they shut down.

Then they'll reopen six or eight months later.

Well, that's a model that was generated by the Italians in the organized crime context.

Because that's how they set up the strip clubs.

Because there was a guy who was South Florida.

In fact, he's deceased, so I'll say his name, Michael J. Peters, who would go around setting up strip clubs.

Like one of the guys in my case met with Peters to get in on a strip club out of Minnesota.

And so they'll take a minimum of a million dollar investment,

And they'll funnel it through the strip club.

However, the way they would do it is they would take a business that's bankrupt.

They purchased the bankrupt business to capture the tax loss credits.

Because when you take that business and then inject new capital into it and operate it, you can write off those tax loss credits.

So not only are you surfacing the money, but you're doing it tax-free.

And you're laundering the money.

And then over the course of that next three-year period, you're going to be able to write off all of the renovations.

It's depreciation.

So you're laundering the money through depreciation.