Laundered Cars & Thirsty Aquifers

What Crime, Car Washes & Project Management All Have In Common

Jun 03, 2025

Today, we're going to merge two things that don’t usually end up in the same conversation unless you're either very curious, very caffeinated, or sitting at a backroom poker game where the buy-in is cash only, the stories are unbelievable, and everyone claims they’re in "real estate."

We’re talking about money laundering through car washes and groundwater depletion in Central Texas. Yeah, I know what you're thinking: “Mark, how in the absolute hell are you going to tie organized crime to aquifer levels and project management?” But hang tight. This one’s a master class in unintended consequences, and more importantly, in what happens when leadership checks out, people stop asking the hard questions, and nobody’s managing the whole damn project.

Picture Central Texas right now. The sun has been out for weeks, months even, cooking the ground into cracked patterns that look like bad tile work. The lakes are low, the rivers are lazy, and the cloud, well, they just pass through like tourists, snapping a few photos before moving on. Rain hasn’t really visited in any meaningful way, and the Edwards and Trinity aquifers are wheezing like a pack-a-day smoker. Yet somehow, in the middle of this hydrological drought, there’s not a dirty car in sight.

Drive down any stretch of highway around Austin, San Antonio, or one of the dozen exploding suburbs wedged between the two, and you’ll see the same surreal landscape. On one corner, a shiny new express car wash with neon signs advertising their $19.99 monthly unlimited wash plan. Right across the street? Another car wash offering the same deal, promising cleaner tires and “eco-friendly” soaps. Down the road, another one pops up like a Starbucks that sprays water instead of brewing coffee. It feels less like a car wash industry and more like a full-blown invasion.

But here’s where it really gets wild. While these businesses stack up side by side, each with glistening cars streaming out of their tunnels, the regular folks who actually live here are getting emails from their water utilities saying: “Don’t you dare wash your car at home. Don’t water your lawn on Wednesdays. Don’t even think about hosing down your driveway.” You can pay someone else to wash your car, because they have permits and closed-loop recycling systems, at least the good ones do, but you can't run your own hose in your own driveway because the aquifer can't handle it. Welcome to Texas, where the water rules are like the weather: completely unpredictable, occasionally unfair, and always just a little absurd.

And yet, buried beneath all this shiny chrome and spinning brushes is something far darker than just water math gone wrong. Behind some of these sparkling facades are operations that aren’t just washing cars, they’re washing cash. Organized crime figured out a long time ago that car washes are the perfect front: high cash flow, vague transaction tracking, and very little outside oversight. The same things that make car washes attractive to private equity investors make them equally irresistible to cartels and criminals looking to launder dirty money into clean books.

This is where bad leadership comes into focus. Because when you allow unchecked growth, when regulations don’t keep pace, and when nobody’s asking why a town of 30,000 people needs fifteen car washes in a five-mile radius, you’ve basically handed the bad guys a golden invitation. They build the businesses, shuffle the money, and hide behind a wall of suds and shell corporations while the rest of us sit in drought meetings yelling at each other about HOA lawn restrictions.

So yeah, buckle up. Because this rabbit hole doesn’t just take us into the world of crime and water scarcity. It takes us straight into a live-fire case study of what happens when leadership abdicates responsibility, project oversight goes missing, and short-term profits blind everyone to long-term consequences.

TL;DR:

Why are so many car washes popping up in Texas during a drought?
Central Texas is facing a water crisis, but thousands of new car washes are opening, many using millions of gallons annually. Some without water recycling systems. Residents are under water restrictions, but commercial car washes often operate unchecked.
Is organized crime using car washes to launder money?
Yes. Car washes are ideal fronts for money laundering: high cash volume, low oversight, and vague transaction trails. From local busts to global scandals like Brazil’s Operation Car Wash, the model is proven and it’s happening in Texas.
How does private equity factor into this?
Private equity firms are pouring into the car wash industry, drawn by tax incentives, recurring revenue, and real estate gains. But unchecked expansion is adding immense pressure to strained aquifers, often without accountability for environmental impact.
How much water do car washes really use?
Texas has over 5,600 car washes using approximately 4.6 billion gallons of water annually. Equal to the usage of more than 46,000 households. Recycling systems help, but many older washes still run open-loop, wasting water in a region desperate to conserve.
What’s the leadership and project management failure?
This crisis isn’t just about soap and water. It’s about failed oversight. When short-term profit trumps long-term planning, the result is resource mismanagement, environmental risk, and systemic blind spots. That’s not just bad policy. It’s bad project management.

The “Clean” Business of Dirty Money

Let’s start at the beginning, where all good criminal enterprises start: the money needs to get clean. Car washes are tailor-made for that task. They’re cash-heavy, simple to run, and most importantly, nobody asks too many questions. Every dollar bill looks the same when it comes out the wash, both figuratively and literally.

It’s not theory. It’s happening right here in Texas. The DEA has busted multiple laundering operations in the state, including one in 2021 involving Dallas attorney Rayshun Jackson. Jackson wasn’t just laundering pocket change; he was offering what you might call a full-service laundering package for drug traffickers. His operation helped funnel cartel drug proceeds through shell companies attached to car washes, coin laundries, and other cash-intensive businesses. Jackson advised his clients to set up layers of shell corporations, produce fake invoices, and structure deposits small enough to avoid the federal reporting threshold of $10,000. Techniques known collectively as "smurfing." According to court documents from United States v. Jackson (Northern District of Texas, 2021), Jackson laundered over $380,000 in drug proceeds before the feds finally shut him down. He wasn’t even subtle about it. He charged his clients a fee, took a cut of the washed cash, and kept the carousel spinning until federal agents caught wind of the cycle.

And this isn't some isolated Texas problem. This tactic has been deployed globally and at much grander scales. If you really want to see how far the rabbit hole goes, look at Brazil’s infamous Operação Lava Jato, better known in the media as Operation Car Wash. That wasn’t just your neighborhood mom-and-pop car wash taking some sketchy deposits. This was a full-blown international corruption and laundering ring involving Brazil’s state-run oil company Petrobras, construction giants, and shell companies moving money through car washes, offshore accounts, and luxury real estate. The total amount laundered? Over $42 billion, according to the Brazilian Federal Police (source: The Guardian, 2019). Billion, with a B. The scope of that operation was so massive it toppled presidents, CEOs, and sent dozens of political figures to prison.

Now zoom back into Texas. Same playbook. Same rules. Just on a smaller scale. The product might be different, oil contracts in Brazil, meth and fentanyl here, but the mechanism is eerily familiar. Stack enough shell companies, keep the transactions messy, and you’ve got yourself a “legit” car wash empire that doubles as a criminal cash pipeline.

Private Equity Meets Criminal Enterprise

Now enter the private equity boys, rolling up in their Teslas and throwing around investment decks like poker chips. They don’t care about dirty cars or water shortages. What they see is a perfect storm of recurring revenue, tax advantages, and low-overhead operations that print cash with every wash cycle. The subscription model alone is catnip for these firms. When a car wash can lock in thousands of customers on monthly memberships, customers who keep paying whether it rains or shines, the revenue streams start looking more like SaaS businesses than service businesses. Predictable, scalable, and algorithmically attractive.

But it’s not just the cash flow that has their attention. The tax code practically begs investors to pile in. Through accelerated depreciation allowed under Section 179 of the IRS code, car wash operators can write off expensive water recycling systems, tunnels, equipment, and even real estate improvements in the very first year of purchase. A $2 million wash can be turned into an aggressive tax shelter while spitting out steady income almost immediately. As one analysis in The Wall Street Journal (Feb. 2023) pointed out, private equity funds have increasingly targeted the car wash industry specifically because of these accelerated depreciation rules combined with rapid growth in suburban and exurban markets.

The land speculation component just sweetens the pot. In booming towns across Central Texas, these private equity-backed companies often swoop in, buy undervalued parcels along high-traffic corridors, and slap up shiny new express washes long before the neighborhoods fully build out. If the car wash makes money, great. If not, they sit on the land, banking on rising property values as Austin’s endless suburban sprawl marches forward. Either way, they're holding an appreciating asset wrapped in a depreciable business model.

This is why Central Texas now finds itself with more than 5,600 car washes generating over $2.2 billion annually, according to recent industry data from IBISWorld’s 2025 Car Wash & Auto Detailing report. And no, it’s not because Texans have suddenly developed an existential hatred for dust and pollen. It’s because this business model works on spreadsheets, even if it makes zero sense at street level.

Drive around Austin and the visual evidence is everywhere. In some neighborhoods, you can stand at one car wash and literally see the neon signs of two others blinking across the intersection. The market isn’t just saturated; it’s stacked. Three, sometimes four car washes crowd into a single square mile, competing for the same commuters who, if we're being honest, probably aren’t even getting their cars that dirty to begin with. The physical clustering would make sense if this was coffee or tacos, but it starts looking absurd when you realize that every tunnel is pulling from the same stressed water systems underneath the ground.

While the financial models make sense on paper, the hydrological models tell a much different story, and that's where the cracks start showing.

The Water Problem: Drought Doesn’t Care Who Owns the Land

Here’s where my construction folks, my PMs, and my old grizzled well-drillers start nodding. This isn’t theory anymore, it’s simple project math. Every decision, every unchecked buildout, eventually shows up in the numbers. Water doesn’t lie, and unlike balance sheets, you can’t fudge the aquifer.

Modern car washes, the good ones, the ones that spent the money on closed-loop systems, can squeeze their water use down to around twelve gallons per wash. It’s actually a technological marvel when you think about it. Capture, filter, reuse, repeat. But not everyone’s playing that game. A surprising number of facilities are still burning through water like it's 1995 and nobody’s heard the word drought. Older or cheaper operations are running open-loop systems that pull somewhere between sixty-five to eighty gallons per vehicle. Most land somewhere near the seventy mark, give or take a few sloppy rinses.

Now scale that out. Take one older car wash that doesn’t recycle. Assume they see a modest one hundred cars a day, which is conservative, especially in booming markets like Austin and San Antonio where folks wash their trucks like they’re raising them for show. At seventy gallons a wash, that single facility is using seven thousand gallons of water per day. Stretch that over a full year, assuming 350 operating days to account for some closures or maintenance, and you’re looking at roughly 2.45 million gallons of water consumed annually by one non-recycling car wash.

Now compare that to its modern, recycling counterpart. That same one hundred cars a day at twelve gallons per wash burns through only twelve hundred gallons daily. Over the same 350 days, that recycling car wash only uses about 420,000 gallons a year. It’s a night-and-day difference, one that really shows why recycling mandates are so critical in drought-prone regions.

So far, the industry estimates suggest that about twenty to twenty-five percent of car washes still operate without recycling systems. The rest have adopted some form of water reclamation, whether for environmental compliance or to save money once water bills start climbing. With Central Texas sitting at roughly 5,600 active car wash facilities, that means you’ve got around 1,120 facilities pulling water straight from the system with no recycling whatsoever, while the remaining 4,480 are running with modern systems.

Now the ugly math. Those 1,120 non-recycling washes are each pulling approximately 2.45 million gallons per year. That’s a combined draw of nearly 2.75 billion gallons annually from facilities still running old school. The newer recycling systems, despite their efficiency, aren’t water-free. Their 4,480 locations still collectively use about 1.88 billion gallons per year. When you add both numbers together, you’re staring at a total water draw of approximately 4.63 billion gallons per year just to keep cars sparkling across Central Texas.

To put that in perspective, the average Texas household burns through about 100,000 gallons of water a year between showers, cooking, toilets, laundry, and the infamous lawn sprinklers that make HOA board members feel important. That means the total water use of Central Texas car washes is equivalent to the annual water consumption of about 46,300 households.

In other words, we’ve essentially created a small city’s worth of water demand, not for drinking, cooking, or growing food, but to make sure nobody’s Silverado has water spots on it when they pull into the Buc-ee’s.

And all of this is happening while the region faces a thirty-to-forty inch rainfall deficit since 2022. The Edwards and Trinity aquifers have been dropping like bad stock portfolios. Austin’s population has jumped thirty-four percent since 2010, adding enormous pressure on municipal systems already playing catch-up. And while agriculture remains the undisputed heavyweight champion of groundwater consumption, these thousands of unregulated commercial draws stack up like hidden fees on a contractor’s invoice. One or two don’t kill you. But when they start multiplying under lax regulations, you wake up one day and realize you’re bleeding out slowly from a thousand tiny cuts.

The car washes didn’t cause the drought. But they sure as hell aren’t helping.

The Leadership & Project Management Takeaway

The real takeaway here has nothing to do with water or soap or even drug money. This is a straight-up masterclass in what happens when leadership sits back, assumes the system will take care of itself, and nobody asks the hard questions before it’s too late.

In project management, we live and die by oversight. Every job site I’ve ever walked onto had a checklist, an inspector, a punch list, a second set of eyes. Not because we like bureaucracy, but because we’ve learned, usually the hard way, that if nobody’s watching, mistakes don’t just happen. They multiply. The same rule applies here. Public policy is no different than project management in this sense. When you let an entire industry scale unchecked, when you wave through permits without requiring data on water recycling, when you fail to connect financial regulation to environmental oversight, you hand the wheel to whoever wants it most, and sometimes that’s private equity firms chasing tax breaks, and sometimes that’s cartel front men looking for a place to scrub their cash.

Systems that lack redundancy break faster and harder. In construction, you never build something assuming everything will go perfect. You build to absorb failure: backup plans, alternate suppliers, contingency budgets. But here? These non-recycling car washes are effectively one-failure systems. When the water starts running short, and it already has, they’ve got no flexibility. No cushion. They're pulling straight from the same stressed aquifers everyone else depends on. It’s the same as running a job site with no float in your schedule: one sub blows the timeline and the whole thing collapses.

The real seductive danger in all of this is how good the short-term numbers look. Tax breaks. Depreciation. Easy capital. Rapid expansion. It’s fast money, just like underbidding a job to win it and hoping to make it up on change orders later. But eventually, the cost shows up. And when that bill lands, it doesn't go to the investors or the criminals who’ve already cashed out, it lands on the backs of residents, farmers, city planners, and regulators trying to clean up a mess that was avoidable from the start. Water scarcity, rising rates, tighter restrictions. It’s all part of the delayed invoice for leadership failure.

Good leadership, whether you're running a job or managing public resources, starts by asking the unsexy questions before the crisis. What if the model’s wrong? What if the aquifer doesn’t recharge? What if this growth isn’t sustainable? What if the people funding these expansions don’t have the region’s best interest in mind? These aren’t fun conversations. But they are essential ones. And the leaders who skip them, whether in a boardroom or at city hall, are the ones who end up reacting to disaster instead of preventing it.

#HardKnockLesson: Bad leadership doesn’t look like chaos at first. It looks like unchecked growth, clean cars, rising profits, and empty wells. The crash only comes later, when the bill finally arrives.

Hard Knock Policy Suggestions (Because You Know I Can't Help Myself)

Now, you know damn well I can’t walk through a mess like this without throwing out some policy suggestions. It’s the builder in me. I see a crooked frame, I start thinking about how to square it up before the whole thing collapses. And what we’ve got here is a structure that's been leaning for years because nobody bothered to get out the level.

First off, we need to stop playing footsie with water recycling mandates. This patchwork of voluntary compliance, city-by-city ordinances, and grandfathered exceptions isn’t cutting it. If you’re running a commercial car wash in Texas, you should be recycling your water. Period. I don’t care if you're in Austin, Edinburg, or some unincorporated corner of the Hill Country; the technology exists, it’s proven, and frankly, if you can afford to build a multi-million dollar express wash with disco lights and monthly subscription plans, you can afford a closed-loop water system. We need a statewide standard that makes recycling the rule, not the exception, so we stop draining irreplaceable aquifers for the sake of shiny paint jobs.

But plugging the water hole doesn’t stop the money from getting laundered. That’s a separate, equally sloppy problem that’s been allowed to thrive in these cash-heavy businesses because the reporting requirements are too weak, the audits are too rare, and too many folks in enforcement keep pretending it’s someone else’s job. High-cash businesses like car washes, laundromats, and certain types of restaurants have become a playground for organized crime because there’s very little scrutiny unless someone’s already on a watchlist. That needs to change. The reporting thresholds for cash transactions need to come down, and the rules for financial disclosure on these businesses need to grow some teeth. If you’re running a business moving tens or hundreds of thousands in cash each month, the government shouldn’t have to wait for a criminal trial to start asking questions.

And finally, we’ve got to stop thinking about aquifer health like it’s a moral issue and start treating it like an engineering problem. Conservation is important, sure, but you can only tell people to take shorter showers and let their lawns die for so long before you hit diminishing returns. What we need is investment, real investment, in stormwater capture, recharge basins, and smart infrastructure that helps us bank water when we get it, because the rain’s never been consistent out here and it’s only getting worse. Every gallon that hits the pavement during a rare Texas storm should be treated like liquid gold, not wasted runoff. That’s how you start future-proofing a region, not by crossing your fingers and hoping the next season brings more rain.

Final Thought: Project Management Lessons Are Everywhere

If you’re really paying attention, and I mean the kind of attention that comes from getting your boots muddy on real job sites, or from sitting through one too many city council meetings that accomplish absolutely nothing, then you start to see the truth. Everything is a project management problem at its core.

On the surface, a car wash looks harmless enough. Soap, suds, colorful LED lights, and some teenager’s stolen Drake playlist blaring through Bluetooth speakers while a line of SUVs idles in the Texas sun. But that’s just the pretty front-of-house view. Scratch the paint, and you see the whole underlying system exposed. You see the financial machinery humming behind the scenes, with criminal enterprises moving dirty money through spotless storefronts. You see regulatory gaps wide enough to drive a fully-loaded concrete truck through. You see resource management failures where everyone talks about sustainability but no one installs the damn water recycling system until they’re forced to. And you see leadership blind spots, where short-term profit keeps winning over long-term responsibility, again and again.

This isn’t unique to car washes. That’s why you’re here at Hard Knock University. Because leadership isn’t some clean textbook model where everything works as planned. It’s not a PowerPoint presentation full of buzzwords and fake optimism. Leadership is applied. It’s messy. It’s real. It’s standing in the middle of conflicting interests, limited resources, and unintended consequences, and still finding a way to build something that won’t collapse five years down the road. It’s asking the uncomfortable questions before the collapse comes. It’s fixing the foundation while everyone else is still busy admiring the shiny facade.

And at the end of the day, that’s exactly why this matters. Whether you’re managing a job site, a company, a city, or a water system, the same rule applies: you can’t afford to wait until you’re in a full-blown crisis to start leading. That’s reaction. And reaction is what got us here in the first place.

🔥 #HardKnockLesson:

You don’t fix a cracked foundation by painting the walls. Real leadership starts when you pull back the drywall, face the ugly truth, and have the guts to rebuild what’s broken, before it breaks you.

Previously On Hard Knock University Dispatch:

Texas Passes HB49: Will Treated Frack Water Become the State’s Next Environmental Crisis?

Mark Caples

May 29

Texas Passes HB49: Will Treated Frack Water Become the State’s Next Environmental Crisis?

Update (June 20, 2025): This article was written before House Bill 49 was officially signed into law by Governor Greg Abbott on June 20, 2025. The bill is set to go into effect on September 1, 2025, granting legal immunity to oil and gas companies that transfer treated produced water, effectively shifting liability for any future contamination away from…

Read full story

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