1660s, "to wash linen," from noun launder "one who washes" (especially linen), mid-15c., a contraction of lavender, from Old French lavandier "washer, launderer" (12c.), from Medieval Latin lavandaria "a washer," which is ultimately from Latin lavare "to wash" (from PIE root *leue- "to wash"). Criminal banking sense first recorded 1961, from notion of making dirty money clean; the word in this sense was brought to widespread use during U.S. Watergate scandal, 1973. Related: Laundered; laundering.
late 14c., "place for washing;" mid-15c., "act of washing," a contraction (compare launder) of Middle English lavendrie (late 13c.), from Old French lavanderie "wash-house," from Vulgar Latin *lavandaria "things to be washed," plural of lavandarium, from Latin lavare "to wash" (from PIE root *leue- "to wash"). English meaning "articles that need to be or have been laundered" is from 1916. As a verb, from 1880. Laundry list in figurative sense is from 1958.