The Curious Business of Black Money

Explained In Detail

Well in simple terms, Black money is referred to any sort of cash physical or non-physical like bitcoin which is obtained from Illegal sources or by illegal means. So that is what Black money means.

Now, for those of you who don’t know how black money is so prevalent despite it being completely illegal, the answer is straight. There is a huge intermediatary secret business which deals with conversion of black money into regular or “Legal” white money.

Now, I can explain how this business largely works but not exactly. The reason being that even though many methods of conversion are known there are still huge loopholes in the legal system of countries which allow other unknown conversion methods to go unnoticed.

To make it simple for you to understand, I'm gonna use examples to explain the matter and process.

So, firstly let’s say that there is a company called Rhinestone Industries. In public record it deals with pharmaceuticals but behind closed doors there is a huge drug trade business going on. A pharmaceutical business is a perfect cover for such a business right?

So, the company receives payment from the people they sells the drugs to but they cannot show the money received in their public account records which are reviewed by auditors since the source is illegal. Now, they have a very clever idea with which they convert their dirty money.

They will buy some pretty ordinary shops or businesses usually small businesses like dry clean stores, game stores basically anything small and low-profile(If they don’t have any yet). Now, shops like these don’t have regular customers. Their customers come from different parts of the country and don't have anything common in between them. So, when an auditor checks the records of such stores he will have no option but to believe what the accounts record says.

Now there will be people in these stores who are In charge of modifying the records. Lets say the company got 80,000 rupees in black money and it has 5 such type of stores. To avoid suspicion about the revenue they will divide the money into 5 parts. That is 16,000 revenue for each store. Now that is a revenue which isn't too low but not too high either. Perfectly concealed.

Now all the black money they received has been added to records under false names therefore turning that 80,000 into legal money with legal sources. If anyone asks for records they show these records and the matter ends then and there. Nobody knows , perfectly concealed.

There are mainly two ways in which such businesses get caught.

1. Someone from the inside due to any reason decided to leak the information.

2. An investigation by police or any legal authority out of suspicion.

In detail-

1. Any person from the inside has a fight with someone else in the business or due to trust problems or anything for that matter decided to tip the police or authorities. The person who reports it by himself generally receives less jail time or punishments compared to the others. Therefore that is a motivation for the person to give up the secret.

Sometimes even after so much coverup and concealment, clues are left behind. Some sort of fault will be present which will exploited by responsible and dedicated police officers or auditors which will cause a suspicion about the revenue source of the company. They will not ask the company directly because they’ll get enough time to coverup the evidence before a case is declared.

The officers will go undercover in such stores and pose as workers therefore gaining an inside view on the matter. With this loophole they will investigate the company and by using their methods they will find out all the foul play and during their time in these stores they will collect evidence required to prove the case and once they have enough evidence, they proceed with the case and the defaulters are prosecuted and punished.

So that’s how this whole business works. Hope you guys understood the matter.

Also the examples I have used are purely fictional and are not about any real companies or people.

There is a whole world of e-money like bitcoin etc. put currently I don't have any knowledge on that matter so once I properly research about it I will come back with a part 2.

Hope you liked it, bye!

See y’all soon!