The National Crime Agency – dubbed Britain’s version of the FBI – has begun an inquiry into the UK end of a $20bn (£13bn) money-laundering scam revealed by The Independent involving some 19 British shell companies.
The investigation highlighted the ease with which Britain is being used by organised crime syndicates to set up sham businesses with which to make ill-gotten cash look legitimate.
Sources of the money could range from people trafficking to corruption and large-scale tax avoidance.
NCA officers have just returned from Moldova, where they have been working with police there on the complex investigation.
Moldova is taking the lead on the so-called “money laundrette” because the hub of the alleged activity took place there through carefully staged court cases tried by Moldovan judges.
However, it would not have succeeded without the use of the British front companies, which The Independent traced to addresses in cities across Britain, from London and Birmingham to Belfast.
Nigel Kirby, deputy director of the NCA, said: “The Independent’s excellent reporting was the first we knew of this and we are grateful to the newspaper for bringing it to our attention. Of course, it is deeply concerning that the UK has been used in this way. It threatens the reputation of Britain and the City of London.”
His investigators are now expected to be interviewing the individuals identified in our investigation and attempting to piece together the finer details of the case in the hope of aiding the Moldovan investigators’ efforts to follow the money trail.
It is also likely the NCA will be looking into more than a dozen UK firms which, completely unwittingly, received payments from companies allegedly connected to the laundrette.
Mr Kirby said he had never seen an alleged scam of this size before, and that the NCA would be using it as a core part of its discussions with the Government and Companies House about what new powers police investigators need in order to tackle such large-scale and well-orchestrated money-laundering operations.
Moves are under way to tighten up rules around disclosing who the real people are behind companies – the so-called “beneficial owners” – and their directors. In this case, the 19 companies are all owned through opaque corporate structures offshore involving dozens of other companies in secretive locations from Belize to Mauritius.
Their directors were often nominees who lend their names to companies in return for a fee but have nothing to do with their actual running.
The problem for investigators here is that the vast majority of the activity in the UK is likely to have been entirely legal. Laws on setting up companies in Britain are notoriously lax.
One company-formation agent told The Independent of how he had, entirely legally, sold an off-the-shelf company allegedly involved in the scam to a Ukrainian man over the telephone. No checks were needed, he said.
Mr Kirby said even if no criminal case could be formed against any individuals for the UK end of the laundering, the NCA would learn from it what “red flags” could prevent such scams coming here in the future.
In Moldova, the investigating officer Vasile Sarco has been busy following the money trail around the world and attempting to get information from large numbers of countries as part of his hunt into who the Mr Bigs might be.