What is money laundering?
In: Economics
Effectively, it is paying taxes on money to make the money legal. Suppose I’m a drug dealer and I make $1M a month. I can’t easily spend that illegally gained money easily without possibly drawing the attention of the IRS or police. If, however, I start or get involved with a business that has a lot of cash transactions (strip club, bar, laundramat, etc.) I can simply add my money to the legal revenue, claim the total as the revenue for the business, and pay taxes on all of that money. Voila. My illegal money is clean and legal.
Latest Answers