What is money laundering?
In: Economics
It’s a way to make illegally earned money look legitimate, for tax purposes, for income verification purposes, to create a cover for lifestyle, for ease of use day to day.
Say you’re a drug dealer making $5,000/wk dealing drugs. So you’re making $250k/yr dealing drugs, but can’t really live the lifestyle of that income when it’s all in $50 and $100 bills. But you also own a tanning salon, which actually generates $10,000 in weekly revenue, but you add your $5,000 in drug income to the books, deposit it into the bank with your real revenue, report it as income for the tanning salon, etc. so that taxes get paid on the money, so that you can go to a bank and get a mortgage based on that income, so that you have ability to get credit cards and such. So that you’re a successful businessperson driving that Mercedes, not some street punk with unknown means to afford such a car.
Latest Answers