Can money laundering occur in non-financial businesses?

Money laundering can indeed occur in non-financial businesses, and the scenarios where it is most likely to happen often involve entities that handle large amounts of cash. This is because cash can be more difficult to trace compared to electronic transactions, allowing illicit funds to be concealed with less risk of detection.

Non-financial businesses, such as restaurants, casinos, and pawn shops, typically engage in cash transactions that can provide opportunities for money laundering. For instance, a business might inflate its sales figures, providing a cover for the placement of illegally obtained money. This process allows criminals to disguise the origins of their funds and integrate them into legitimate financial systems.

While financial institutions are heavily regulated and monitored for suspicious activities, non-financial businesses may not face the same level of scrutiny. Consequently, those that handle significant cash amounts present a higher risk for laundering activities since they can easily mix illicit funds with legitimate cash flow.

The other choices suggest limitations on where money laundering can occur, incorrectly implying that it is confined to financial institutions or specific business types. In reality, the spectrum of businesses vulnerable to money laundering is broader, encompassing various sectors, especially those involving high volumes of cash transactions.