McMafia shows us how to hide the money

The new BBC series McMafia is about to show viewers how crooks try to hide their ill-gotten gains in shell companies and offshore accounts and ‘clean’ the money in legitimate businesses. However, it will be interesting to see whether it also shows how financial investigators are able to peel back the layers of offshore secrecy.

In the series, Alex Godman, the respectable, British-educated son of a Russian ‘businessman’ is pulled into the world of international crime after his father’s brother is brutally murdered in his presence by henchmen of the Russian mobster who drove the family out of Moscow. In a story where art imitates life, the other characters range from drug dealers to gambling fraudsters and oligarchs.

In the scene where Alex is first tempted into entering an ‘investment deal’ with a nightclub entrepreneur, Alex explains how he might get the man’s funds to Mumbai “without leaving a trace”. He explains that he would set up an elaborate chain of companies in different tax havens across the globe, where a “special purpose vehicle” would lend money to another in the Bahamas and so on until no one would know who was at the end of the chain. It remains to be seen whether, now he is embroiled in his new world, whether he will succeed in keeping the money’s origins hidden.

Back in the real world, investigators have uncovered similarly complex dealings through painstaking research. In the case of the Panama and Paradise Papers, for example, shell company upon shell company has been revealed but only through trawling through hundreds of thousands of documents and financial papers.

The offshore industry is a very complex terrain but forensic accountants are expert navigators.

Author: Roger Isaacs, 5 January 2018