Yes and no. These arrangements are often grounds for prosecution once they come to light. Just because moving money from A to B and from B to C is legal, it doesn't mean that going from A to C is still legal.
Tax authorities usually struggle to reconstruct the entire chain, so they don't prosecute... until somebody else does the job for them, and then they piggyback.
Tax authorities usually struggle to reconstruct the entire chain, so they don't prosecute... until somebody else does the job for them, and then they piggyback.