Can you give me an understandable example of money laundering? So say it’s a storefront that sells art but is actually money laundering. How does that work? What is actually happening?
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The simple version is think everything in CASH. Cold hard cash.
Lets say I’m a mobster, dealing drugs, doing shit. I have tons of cash from illegal stuff. But I can’t really spend it too much. If I buy a house or car or start living extravagantly, people will notice, and wonder, “how did you get the money?”. So I need to find a way to make it so my illegal money looks like it comes from a legitimate business and no one knows its true source.
So, I open a bar. Bars operate in cash mostly. Lets say my bar is an OK bar, I have real customers, and I make $2000 in sales a day. Cool. Now what if I “buy” some extra drinks with my illegal cash. Say a $1000 a day. I never serve those drinks at the bar, I just get paid for it. Now my bar makes $3000 a day. Totally normal, and for bars, people paying in cash with no receipts is normal. Nothing seems strange. Each day, I just take $1000 of my illegal money and give it to the bar, that I happen to also own. I just put it in the register.
Pretty soon, my business is doing well, nothing seems strange, I have a good business, I operate a successful bar. I can take out loans, show people my books, pay taxes, I’m just a good businessman who runs a bar. Everything seems fine. Little do they know, my bar isn’t a good businesses, I just lie and take money from my other business and say we sold drinks that never existed.
There’s a reasons a lot of mob people often operated bars/restaurants/strip clubs/casinos and such. Cash businesses where its easy to launder money and nothing seems off.
For art, you just take this to an extreme, instead of say $1000 in drinks a day I’m fudging on the books, what if I instead “buy” a $1M piece of art? Same thing.
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