Money Laundering: From Nail Salons to Magic Cards

The scene from Breaking Bad is iconic: Saul Goodman explains to Jesse Pinkman that buying a nail salon is the perfect way to transform drug money into clean, taxable income. "Your filthy drug money has been transformed into nice, clean, taxable income," Saul says. It's a classic example of money laundering—but as fraud prevention expert Patrick McKenzie puts it, "I really wish money laundering was as easy as it appears to be on Breaking Bad. It's really much more complicated than that."

The United Nations Office on Drugs and Crime estimates that laundered money makes up 2 to 5% of global GDP—trillions of dollars every year. And as society moves toward a cashless economy, criminals are ditching the nail salons and finding new ways to hide their money.

The Three Stages of Cleaning Cash

Money laundering, at its simplest, is the act of moving money to obscure the proceeds of a crime. Carrie Myers, a former FBI special agent who now teaches forensic accounting at the University of South Florida, spent 25 years investigating these schemes. He explains that whenever a crime produces proceeds, there's a 95% chance a money laundering charge exists alongside the underlying crime.