Well, that's his problem right there: MS is NOT akin to money laundering. It's a legal activity, and money laundering is not.
Again, what good does a pile of GCs, receipts, etc do to help in the case of an audit? Assuming that one buys numerous MO's with the GCs, and then deposits into regularly used accounts, the credit card records are a better source of data: you spent $10K on GCs on 5/7, two weeks later, when the GCs arrived, you started buying MOs, and the CC record shows that the 10K was paid off within three weeks.
SEE? Ms Auditor, I have this shoebox full of plastic that proves only that I had a bunch of GCs. That's gonna help, right?
Yeah, we live in MSP, where police and prosecutors have bigger things to worry about than small scale MS.
The absence of positive proof and an accused's big mouth, combined with $100K/month of entirely legal MS behavior can be spun into very ugly and fantastical accusations that will take some fancy lawyering (at a cost well in excess of your benefits from MS) to work your way out of. At the very least, it could turn your life upside down for months. Not to mention, a cop *could* assume based on personal biases and preconceptions, that a $10,000 plus pile of gift cards and money orders on your person are involved in criminal activity, and decide to relieve you of them and send you on your way.
I'd say, keep everything and keep it well organized. I am more into reselling than MS these days, but I still do all my MS in batches, and keep the paper/plastic from each batch together (printouts from online billpays included), so that the entire flow of funds from a gift card purchase would be completely evident to anyone looking through them.
My concern is that prosecutors and police have ample incentives to be willfully blind to exculpatory evidence, and have no incentive beyond their sense of personal integrity to do otherwise. At the end of the day, juries are still predisposed to believe what cops and prosecutors tell them on the stand. There are certain jurisdictions in Wisconsin where I'd hesitate to buy MO with gift cards.
Having gift cards/receipts/deposit slips in hand and well organized, is dispositive proof that you indeed bought gift cards with your CC, cashed them out, deposited the funds, then paid your CC bills with the funds. It makes it much harder to sustain a fantasy of something that isn't there. I don't even use MS accounts for anything but MS, to keep things even simpler.