Typically they will just lie about sales right, so couldnt tax authorities just monitor the number of people going in and out of businesses where they can track easily sales from the outside?(for example barber shop) Then they could just shut down the operation easily by proving fraud? I might be stupid here but it doesn’t make sense to me
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Sure, if law enforcement *suspected* that a business was a money laundering front there may be ways for them to prove that the revenue the business takes in doesn’t match what they report.
But not looking suspicious is the whole point of these businesses. It’s not obvious to authorities how much money a laundromat or restaurant “should” make. So they just see a business that does lots of cash transactions going to a bank and depositing cash, reporting their deposits accurately on tax forms, and paying taxes on it. It looks like a legit business owner following the law.
Also the law enforcement that can most easily see businesses financial documents would be tax authorities, and they mostly care about taxes being collected not where the money came from. For privacy reasons, a local police department or even the FBI cannot randomly look through every business’s accounts to find out who makes “too much” money.
So again, it is totally possible to prove and prosecute money laundering fronts when they are somehow found out, but not that easy to figure which businesses are sketchy to do further investigation.
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