Why and how hundreds of £billions of money laundering happens in the UK every year

Mid way through last year David Cameron, the British prime minister, vowed to crack down on the huge scale of dirty money or money laundering flowing into UK property. Many experienced property commentators dismissed it merely as headline seeking. Anyone involved in the money laundering business in the UK knows that this call for a clean-up is as hollow as his promise to keep the NHS safe, because money laundering is a much bigger business than the NHS and unlike the NHS, it actually generates much needed cash for the treasury.

“We need to stop corrupt officials or organised criminals using anonymous shell companies to invest their ill-gotten gains in London property without being tracked down,” he said in a speech in July without actually stating any hard numbers that the authorities are all too well aware of. Cameron did not elude to the sheer scale of laundering or of tax evasion.

In the same month Donald Toon, the director of economic crime at the National Crime Agency (NCA), spoke after a spike of receipts appeared in tax on homes bought up by companies, trusts and investment funds rather than individuals. This equated to £12 million a week in the tax take for the treasury. Because this tax is collected by lawyers and deposited at the treasury it is one of the cheapest taxes to collect and another reason why the government will not stop money laundering on property transactions.

The NCA boss also made money laundering the focus of of his department’s first report entitled “National Strategic Assessment of Serious and organised Crime” that highlighted “hundreds of £billions being laundered every year” through the UK facilitated by the banks and legal professions.

All this activity is hardly surprising as there has been a 600 per cent increase in foreign millionaires buying property in Britain since David Cameron got his knees under the table at No 10 in 2015. Behind Russian millionaires getting visas to stay in Britain, Chinese investors are the second largest category of investor visa applicants, accounting for 15 per cent. Around 30 per cent went to high net worth individuals from the Former Soviet Union states, including Armenia, Azerbaijan, Kazakhstan and Ukraine.

The visas are merely seen as a fast-track process for wealthy foreign nationals, irrespective of their suitability, to acquire British citizenship, experts claim. Many are hiding stolen money and assets in what is seen internationally as the safe haven of Britain.

Sipping champagne in the finest restaurants and walking the streets of Britain we now offered sanctuary to war criminals, drug barons, weapons dealers, genocidal killers and monsters of every breed and brand with their own special skill sets capable of inflicting horror and persecution on humanity.

For instance, take the £10 million London house, previously belonging to Colonel Gaddafi’s son, Saadi Gaddafi. The High Court in London quite rightly ruled that the property, in the very up-market London suburb of Hampstead, rightfully belongs to the Libyan state as it had been purchased with diverted Libyan state funds and thus was handed over. Here is a man accused of murder, shooting protestors in the Arab Spring and facing charges of war crimes. Yet he was able to walk into Britain buy a London mansion and no-one asked any questions. Before being captured, Saadi Gaddafi enjoyed a frenzy of parties, orgies and drug-taking, becoming well known as a cocaine user. Is this the type of people we want in Britain?

Then there’s the mystery owner of a £147m London property empire which included the Elvis and Beatles’ Stores linked to a former Kazakh secret police chief accused of murder, torture and money-laundering, new evidence from Global Witness reveals. The property includes 221 Baker Street – where Sherlock Homes would have lived had he and his fictional apartment 221b really existed.

This came about in 2009, when an unknown individual acquired a network of offshore-owned companies which in turn invested its £147 million into prime London property. Documents seen by Global Witness reveal how the managers of these companies are linked to Rakhat Aliyev, the aforementioned former Kazakh secret police chief who was eventually found hanged in an Austrian prison in February 2015 while awaiting trial for the murder of two bankers in his home country. Britain welcomes with open arms dangerous, psychotic and unbalanced criminals – as long as they have money.

But the British authorities turn a blind eye. Maybe because Tony Blair signed a multi-million pound deal to advise Kazakhstan’s leadership on good governance, just months after its Prime Minister was controversially re-elected with 96% of the vote around the time of the massacre of people protesting for higher wages. More likely that the treasury cannot afford to stop the housing market generating so much money for it.

In the meantime you might be wondering how money laundering transactions on assets such as very prominent mansions or entire streets in central London happens in the first place without some sort of suspicion. After all, if you attempt to draw out more than £1000 from your bank account, the bank wants to know what you’re going to do with it and can block the withdrawal if they have a suspicion you might be using it for less than legal reasons, like, paying an unemployed decorator in cash.

It appears that the majority of conveyancers are not carrying out identity or electronic anti-money laundering checks. It appears that 38 per cent of conveyancers never carry out electronic identity checks to verify the identity of a customer and a further 29 per cent only sometimes carry out electronic anti money laundering checks.

The results from this research also reveals a stark difference with identity check practices by company size. Sole practitioners are leaving themselves exposed to the risk of identity theft as only 5 per cent carry out electronic checks for all transactions. The majority of conveyancing transactions are conducted by smaller legal practices. About half of larger firms, of 15 partners or more, carry out electronic checks for all transactions.

Making the conveyancing industry check who is buying and where the money comes from would be a start as cleaning up the banking industry would be impossible.

Graham Vanbergen – truepublica.org.uk

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