‘Laundromats,’ explained: How shell companies are used to launder money

Credit: Svetlana Tiourina
Published: September 24, 2019

Much of the money that moves around the world is hidden.

There are many reasons people send cash through secretive channels: To launder the proceeds of serious crimes, evade taxes, or simply stay away from the prying eyes of regulators.

This is done through a combination of complexity and opacity. When a fortune flows through dozens of companies and accounts, many in offshore tax havens or countries with poorly regulated banking systems, its origins become nearly impossible to trace. The authorities remain in the dark.

The demand for this service is so great that it is often carried out by vast, interconnected systems that are used by thousands of clients.

Over the last several years, OCCRP and its network of member centers has uncovered no less than four massive financial vehicles — which we’ve called Laundromats — for moving money across international borders.

These systems have their differences. But they each consist of dozens of offshore companies that enabled corrupt politicians, organized crime figures, and wealthy business people to secretly commit crimes. Through these systems, money stolen from some of the world’s most vulnerable people is laundered for political influence and personal enrichment.

Money laundering used to be very expensive. Laundromats changed that by allowing money that belongs to many different people or criminal organizations to flow through the same bank accounts. By pooling their money together, criminal organizations, corrupt politicians, and others drive down the cost of laundering it.

For more detail on how these Laundromats worked, explore the projects below, or jump to our Frequently Asked Questions.

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