What is it called when a criminal uses a seemingly legitimate company to launder money?

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Using a front business to launder money involves creating a believable, operating company that appears legitimate. This kind of business processes real transactions—sales, invoices, payroll—so illicit proceeds can blend in with ordinary income. The money then moves through ordinary channels, making its criminal origin harder to trace and easier to reintegrate into the economy as seemingly legitimate earnings. A shell company, by contrast, is typically largely inactive on paper and used mainly to hide ownership or to shunt funds without real business activity. A tax shelter focuses on reducing tax obligations, not on concealing illegal proceeds. So the scenario described fits a front business.