To think this sounds like money laundering?

[Beetleback]

There’s a takeaway shop on our high street that is constantly being refurbished. It occasionally opens for a few weeks or months, then closes again for a long, elaborate refurbishment. This has happened maybe four times in the last few years.

There’s a lot of muttering locally about money laundering, but I really don’t understand how that would work? Can anyone explain it to me?

What's going to happen to money laundering when cash gets phased out?

Moussaka not mousses. Sorry for all the typos.

Cash based money laundering is only one type of money laundering. A lot of law enforcement at the moment are focused on what's known as High End Money Laundering (HEML) which is - simply - when rich corrupt people use their wealth (which may have been obtained illegitimately) to buy cars and houses and art work etc. Post the invasion of Ukraine, it's become a massive priority. You also have lots of other forms of laundering too - crypto, trade based money laundering. Cash based money laundering is predominantly related to drugs but there are loads of other crimes where the proceeds will be laundered not in cash. You also have circumstances like, for example, a gang that deals with mainly cash, linking up with a gang that deals with mainly crypto and they fundamentally swap.

Cash is only a small part of money laundering really.

Some drug dealers are already carrying card readers linked to "proper" businesses, so when Wayne buys a bag of something for £50 by card, it goes through a card reader linked to "Terry's Turkish Barbers" business as some kind of fancy hair-styling. Or when Tammy buys some, it goes through a card reader linked to "Nelly's nail bar".

The anti money laundering courses I've been on have emphasised that it's not just cash transactions to look for, it's any transactions by any means that seem too good to be true, outside "normal" ratios/margins, etc.

As cash is phased out, the organised criminal gangs find new ways. In fact, not having to deal with physical cash probably makes life easier for them in that it removes an entire link in the chain (i.e. handling, "washing" and banking the cash).

Ironically, it's probably the money laundering laws that have caused the rise in these "fake" businesses such as takeaways, tattoo parlours, nail bars, car washes, laundrettes, amusement arcades, as previously, the criminals could just bank the cash "no questions asked". As always, the criminals are one step ahead of the law and smarter than the law creators/enforcers. They'll always find a way, especially when there's very little proper "enforcement" from the police, HMRC, local councils, etc., and successive governments have abdicated responsibility and passed on the legal burdens of discovery to banks, accountants and other financial services firms!

It's also said that there's a lot of money laundering (and drugs/arms purchasing) going on through the art market, i.e. where a particular painting is sold at auction for a crazy amount of money. It's said to be a way whereby someone who owes a shed load of money to someone else (for drugs or arms), buys something like a painting from them, for way more than it's market value, to legitimise the payment of money from one to the other - people are "placed" in auctions to ensure the auction price rises to the amount of money pre-agreed to be paid, i.e. bid against each other to avoid it selling below the value of the debt.

There's no way the authorities can police such markets because there's no actual "free open market" in artwork and even legitimate people like collectors can pay stupid amounts on a whim for something they like, so there is no proof that drug dealer bought the artwork for a million more than it's worth to transfer an extra million to the cartel who sold him the drugs! Apparently, some artworks are constantly being bought and sold on a regular basis, as some kind of alternative currency. It's said the same happens with expensive cars, even private planes, yachts and helicopters, where likewise, some people pay more than expected in the open market, but that because they're mostly bespoke/tailored, the "open market" is a lot more flexible due to being one-offs etc.

Of course, there are more modern ways such as crypto currency which is well beyond the reach of the authorities as it's all so secretive.

I’m learning so much from this! I love that whatever the subject mumsnet has it’s experts!

Exactly - if it takes 8 people 10 minutes to wash and valet your car, and they are only charging £10 for it, simple maths should tell you they aren’t making minimum wage.