Quote:

someone is evading their share of IRS payments



I can understand how you would think that, but your response really puts the problem back-to-front. You are confusing money laundering with tax evasion.

In most cases, the money laundering is linked to illegal activities. As a result the money is outside of the economic system. In order to move larger amounts of money (say, to buy a house or business or pay a credit card bill), you need to get that money into the system. Money laundering fills that gap by converting cash into bank deposits, usually at a significant cost.

In fact, money laundering results in higher taxes for the "launderer" because new money enters the system and (usually) becomes taxable. If the drug dealer/Pimp/Pornographer didn't launder the money but just kept coffee cans full of $100 bills around, they would be paying no tax at all, so it's not about collecting tax.

The gov't is after these guys because money laundering is where the underground economy meets the aboveground one. Catching the launderers typically catches the criminals.

It's a big issue in Vancouver where lots of young guys have heaps of cash from grow-ops that they need to get into bank accounts somehow.
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