money-laundering
Can a business which only loses money be a &quot;money laundering&quot; method?
<p>Let's say a criminal opens a business (a restaurant) which only loses money, there are basically no customers at all or there are very few in a way which is certainly non profitable in a given time period (say, a tax year).</p>
<p>Can that be a &quot;money laundering&quot; method, somehow?</p>

<h2>Sure</h2>
<p>You run a restaurant employing relatives and cronies and you scrupulously pay them and their taxes. Say $500k. That is clean money.</p>
<p>You take some money from running the restaurant but not enough to cover costs. Say $200k. However, you declare that your revenues were actually $800k with the difference being $600k of dirty money which “customers” paid in cash. You pay your taxes on your $300k profit and now have nice clean legitimate money.</p>
<p>Now, what legitimate businesses typically do is <em>under</em>report their cash income to minimise taxes but a laundering front <em>over</em>reports and pays too much tax to clean the money. For every $1 of dirty money going in you only get 70c out (or whatever depending on local taxes) but that money is clean.</p>
