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Anti-Money Laundering Laws
Newsflash: you're not supposed to launder money.
No, no one will come get you if you accidentally leave a $5 bill in the pocket of your jeans on laundry day. "Laundering" in the financial sense refers to hiding money from the government.
There are lots of ways to launder (and yes, it's legal for us to tell you about them).
In the good ol' days, the system was very straightforward: A bootlegger made a ton of money selling illegal alcohol but wanted to find another way to show that he had "legitimately" made the dough so the authorities wouldn't catch on. Well, a theater could show a cheap film but still be "sold out." So a bootlegger buys a movie theater and—voilà—the theater business shows itself to be hugely profitable with repeated "sold out" showings... and the bootlegging profits are now hidden.
Today, money laundering usually involves fake accounts, fancy transactions faked on computer screens, and offshore accounts. The idea is the same: you create falsified documents in some way (called "cooking the books") to hide what you're doing from the IRS and the government. Anti-laundering laws are out there to catch people who do it and make sure their goose is cooked if they cook the books.