Money laundering is basically the process of hiding money that were obtained with stolen loot, whether it be drugs or USaid.
Depending on the amount that I have is going to determine how I get rid of the stolen money and get clean money. If I have $60,000 in drug money, for example, I can hide that by making normal purchases like groceries and dry cleaning and I can take my lawful income money, that I’m not using on day to day living, and do something else with it, like invest it. As long as I keep the money within a reasonable range of my income, it’s very hard without a forensic audit for the government to prove that I could not afford to invest the money from my income.
However, if I have more than that, than I have to do something with it and hide the money in another asset. The mob does things like open pizza shops and use the ill gotten gains to buy the supplies for the pizza shop, while selling the pizza to get money that is clean. With clever accounting, it looks like an honest business even I might be just throwing out all the pizza in the end. On paper, it looks like I sold the pizza. Lucky Luciano was an accountant for the mob and that’s what he did. He balanced out the pizzas that were actually sold with the pizzas that were “sold” to make it look like a very busy pizza shop.
Now with paintings and other assets, and I’m assuming everybody is in on this when I explain this, I will pay $10 million for a painting. The person I give the money too, which is traceable, will filter the money out in other ways to make it hard to track. Maybe he will use the money on legit things, spread over time, to make it hard to track. If the FBI found the money but it has exchanged hands dozens of times, it’s basically washed because it would be too troublesome to try and trace it fully.
There are still several Italian restaurants in Boston that only take CASH. They have signs on their doors NO CREDIT CARDS/ ATM around the corner.
I am in Nashua, NH. The Burger King down the street, plus two others were owned at one point by a cocaine distributor.
He got busted by the DEA. Eventually the government auctioned off the restaurants. It made all the papers.
Again, here in Nashua there used to be a Mexican restaurant called Manyana. One Saturday night in the late 1980s the owner closed up and was never heard from again. Turned out he was also a cocaine dealer. Everyone always wondered whether he ended up on the beach in Tahiti or at the bottom of the Atlantic.