eli5: How and why do people launder or clean money?
In: Other
You have a legit source of income, and you funnel your illegitimate money through it so that the government doesn’t see you earning mysterious money that has no explanation.
In the TV show *Breaking Bad*, for example, the main character is a drug dealer, and he also owns a car wash. He puts his drug money into the car wash business, he lies on his taxes saying his car wash earned, say, $500,000 when really it only earned $400,000 from actual car washes, and the extra $100,000 is money from his drug dealing. Now it doesn’t look like he just has an extra $100,000 for no reason, it just looks like he has a successful car wash. Nothing suspicious about that.
The reason you do this is because money is visible. If you put it in a bank account, the government’s going to want to know where you got it. And they’re going to want to tax it. As a criminal, you’ll attract less attention if you have a good explanation for where your money is coming from, and if you’re paying all your taxes on it.
Latest Answers