24 Dec 2020
Gangsters, drug dealers and sex traffickers are using money transfer businesses to launder at least £1 billion in cash every year, the National Crime Agency said after a Times investigation.
Sophisticated home-grown and foreign organised crime networks are known to use the UK outlets, which outnumber by four to one those in France, Germany, Italy, the Netherlands and Spain combined.
The Treasury warned last week in its national risk assessment that terrorists were depositing cash into the financial system that “moved through formal banking mechanisms or via money service businesses (MSBs)”.
Intelligence has suggested that about 15 per cent of more than 31,000 outlets are exposed to money laundering from groups involved in human trafficking, importing drugs and other crimes.
The sheer number of the businesses, including bureaux de changes and cheque cashing companies, makes the practice difficult to identify and, despite long-running concerns, figures suggest failures in self-regulation.
Of half a million suspicious activity reports the authorities received from the financial sector last year, only 17,701 were from money service businesses, thought to be mostly larger companies.
Gangs use criminal-controlled money transfer services or pass off the sums as legitimate. The money is moved abroad, often through many countries including “high-risk jurisdictions” such as Albania and Pakistan.
Ben Russell, deputy director of the National Economic Crime Centre, said that crime syndicates were “career criminals building their lives and their lifestyles running citywide, countrywide significant criminal networks”. He stressed that most money service businesses were compliant and legal.
Last month a businessman who laundered at least £5 million through his money transfer company in south London was sent back to prison for breaching a crime prevention order. Shafiq Ahmed, 53, arranged for drug money to be paid into UK bank accounts and immediately wired to Pakistan, Afghanistan and the Far East. Ahmed, who was first jailed in 2013, used falsified business records and forged documents to cover his tracks.
By John Simpson, The Times, 24 December 2020
Read more at The Times
RiskScreen: Eliminating Financial Crime with Smart Technology
Count this content towards your CPD minutes, by signing up to our CPD WalletFREE CPD Wallet