To wash and iron clothes, or illegally to disguise the origin of money by moving it through legitimate businesses.
From Old French 'lavandier' (laundry worker), derived from Latin 'lavandus' (needing to be washed), from 'lavare' (to wash). The criminal meaning emerged in the 1980s as a metaphor for 'cleaning' dirty money.
The criminal use of 'launder' is pure genius as a metaphor—mobsters literally needed to wash their illegally-earned cash through laundromats and restaurants to make it look clean, so the slang term perfectly captured the process of transformation and disguise.
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