Eli5: Why does counterfeit money need to be “washed”?

Question

I’ve been watching way too much Good Girls. Why does counterfeit money need to be “washed”? Why can’t you just spend it like a normal person spending normal money?

In: 0

Answer 1

None of the answers have been ELI5 enough for me.

**ELI5**

Pick one:

* You just earned $100,000 in cash by selling some illegal drugs.
* You just finished printing $100,000 in fake bills that look real.

Now you have a bag full of cash. What do you do?

I know! I’ve always wanted a fast car. I’ll go buy a Corvette! So you go to the Chevy dealer and you plunk down your cash.

The dealer says … “Um, sir, we don’t deal in cash. So few people buy cars in cash. We don’t allow it. You’ll have to pay by check from a bank.”

So you go to a bank. “Here, bank, take my cash, put it into an account, and I want some checks that I can write”.

But, you see, the bank has a legal obligation to keep an eye out for big huge cash transactions.

So the bank guy says “I’m supposed to report this amount of cash to the authorities. If you got it legally, then you’re fine, but they’re going to look into how you got it”.

And now you’re screwed. If the authorities look into how you got the money, you’re going to jail.

So what can you do?

There are people who are good at turning “dirty” money into “clean” money. The ways they do that aren’t important.

**The point is,** you can’t just walk around with $100,000 in cash and buy big things. Nobody will take that kind of cash, and the bank is required by law to report it so that it can be verified as LEGAL.

“Okay, I just won’t buy a car. I’ll buy groceries and maybe pay my rent.”

Yeah, okay, that works. You could do that. Nobody at the grocery store will bother reporting you spending $300 on groceries.

But that only gets you so far. You want to take a trip? You can’t buy an airplane ticket with cash (I don’t think). You want a car? You want an apartment? Those things generally don’t work with cash.

You want to send your Aunt Mabel $2,000 so she can pay off her mortgage? How are you going to do that? You’re going to put cash in the mail?

I’d bet that many high-end jewelry stores don’t take cash. You want that shiny necklace that costs $4,000? You aren’t paying in cash.

You can see that cash only gets you so far.