Money Laundering, as I understand it, is where illegally obtained money is exchanged in a process to make it legal. When a stereotypical over-confident crime boss describes his money laundering scheme, it would probably sound like this:
"I didn't make millions of US Dollars by selling party drugs, good heavens no! I just happen to run a very successful pizza parlor franchise. These parlors may appear to be derelict and understaffed. But according to my financial records our pizzas are extremely popular/profitable and our overhead costs are easily manageable. We don't keep track of who's ordering our pizzas because we respect our customers privacy!"
For those of you who are bit slow, and there is no shame in that, there are no pizzas being made or sold. The crime boss is selling drugs but he can't deposit the money into a regulated bank. And he needs the legit bank because it can be used to transfer money long distances, like to untaxable off-shore bank accounts. But he can't tell the bankers "I'm depositing money that I made by running an illegal narcotics operations" because that goes into the banks records which are subject to review by government law enforcement. So instead the crime boss sends the cash to the pizza parlors where the employees deposit it in the banks as earnings. The employees are allowed to take a small cut of the cash flow but the majority has to go into the bosses legitimate bank account. Any employee who takes more than their allotted amount will have to answer to the boss's enforcers.
When law enforcement agents check the boss's legit bank account, all they will find is the proceeds from the pizza business. So it's up to investigators to do a lot of legwork: visiting the parlors, interviewing employees, and monitoring transactions. If they can find a correlation between drug sales and profits from the pizzarias, then they have evidence they can bring to court.
This is just an example, not every money laundering scheme involves fake pizzas, although that was a thing back in the 1980-90's. You can swap pizza parlors for casinos, hotels, warehouses, and any other legitimate business. And the pizzas could be works of art, real estate, property rights, and cryptocurrencies. Finally the drug money could instead be any money taken illegally, like stolen from a bank, skimmed off the paychecks of illegally employed laborers, and exhorted from legit businesses. Oh, the money could also come from the sale of illegal firearms! Almost forgot about arms dealing!
Anyways that's how I think money laundering works, if I'm forgetting something, let me know!
P.S.: Why are you looking up money laundering on tumblr?
