Money laundry OR Money laundering (See more…)

Both terms are correct but they play different roles.

We talk of ‘laundering’ when large amounts of money generated by criminal activity are moved illegally.

We talk of ‘laundry’ with regard to washing clothes, among other things.

It is a misconception to think that money can be washed. It is the misunderstanding in meaning and the mix-up in spelling that drive this belief. That could be the origin of ‘money washing’ as we know it in Nigeria. 

However, the term ‘laundry’ has an interesting history and its association with money washing.

Laundry comes from the Old French word ‘lavanderie’ meaning ‘washing’ or ‘place for washing.’ Initially, it referred to the act of washing clothes or the facilities for doing so.

The term ‘money laundering’ is said to have originated from the United States in the 1920s-1930s during the Prohibition era. Criminal organisations needed to conceal the illicit origins of their money.

The term ‘laundering’ may have been borrowed from the legitimate laundry industry where dirty clothes were washed and cleaned. Similarly, money launderers ‘washed’ dirty money (illicit funds) through legitimate channels making it appear clean and legitimate. 

‘Dirty money’ referred to illicit funds; ‘laundering’ meant concealing the money’s origins through various financial transactions.

Chemicals are not related to money laundering but the idea is that illicit funds are ‘cleaned’ or ‘purified’ through financial manipulation.

Laundry hides stains; money laundering hides illicit origins.