Suppose a piece of equipment has a market value of $200k if it's working, but only half that if it's in need of major repairs. They go to a farmer and offer them $100k plus another $100k piece of equipment for the $200k one, but instead of listing it as a $200k transaction, they specify the condition of the expensive one as non-operational and list only the $100k in money. The farmer is happy because they get to write off a $100k loss on their taxes and get the other $100k piece of equipment off the books. The other party then claims to have repaired the $200k equipment even though it was never broken and sells it for $200k, thereby laundering $100k in dirty money.
This is why attempts to prevent money laundering have extremely low effectiveness. All you need is two parties, one of which wants to get something of value off the books, the other other of which wants to get clean money on the books. They engage in an on the books transaction and an off the books transaction at the same time, account for the value of the off the books transaction in the price for the on the books transaction, and agree on a reason for that to have been the price which is plausible but hard to verify.
Suppose a piece of equipment has a market value of $200k if it's working, but only half that if it's in need of major repairs. They go to a farmer and offer them $100k plus another $100k piece of equipment for the $200k one, but instead of listing it as a $200k transaction, they specify the condition of the expensive one as non-operational and list only the $100k in money. The farmer is happy because they get to write off a $100k loss on their taxes and get the other $100k piece of equipment off the books. The other party then claims to have repaired the $200k equipment even though it was never broken and sells it for $200k, thereby laundering $100k in dirty money.
This is why attempts to prevent money laundering have extremely low effectiveness. All you need is two parties, one of which wants to get something of value off the books, the other other of which wants to get clean money on the books. They engage in an on the books transaction and an off the books transaction at the same time, account for the value of the off the books transaction in the price for the on the books transaction, and agree on a reason for that to have been the price which is plausible but hard to verify.