The ‘Azerbaijani Laundromat’
Service Area: Criminal and Regulatory
Member: Roger Isaacs
The Evening Standard has recently won a case allowing it to view previously undisclosed documents in the ‘Azerbaijani Laundromat’ case but is not allowed to name the couple at the centre of the allegations.
The National Crime Agency (NCA) had submitted confidential papers to the court detailing the alleged activities of a husband and wife team who are accused of bringing at least £14 million of ‘dirty money’ from Azerbaijan into London to be ‘laundered’.
According to the NCA papers, the frozen bank accounts held by the couple contain funds derived from international corruption that was laundered “through a myriad of limited companies”, in countries that include Belize, the Marshall Islands and the Seychelles.
The papers also apparently contain allegations that the pair “received £13,897,280.00 from 21 corporate entities” which, it is argued, constitutes “grounds for suspicion” in the case in which “a number of the entities have been directly linked to the reporting of the Azerbaijan Laundromat”.
This criminal scheme was allegedly used to launder a staggering sum of £2.2 billion said to have been plundered from Azerbaijan and channelled through four UK registered companies and the Estonian branch of a Danish bank between 2012 and 2014.
Various estimates of the total amount of ‘dirty money’ coming into the UK puts the total at an even more extraordinary sum of between £100 billion and £325 billion per annum.
These funds will include ill-gotten gains from rigged procurement schemes, bribery, embezzlement and the unlawful acquisition of state assets, according to the National Economic Crime Centre.
Being charged with money laundering is very serious, given that it carries a prison sentence of up to 14 years.
Roger Isaacs, Forensic Partner at Milsted Langdon, said: “Figures of hundreds of billions of pounds a year for the black economy are so huge that they may even eclipse the total borrowing by the UK Government following the Covid-19 pandemic which the Government’s independent forecaster, the Office for Budget Responsibility (OBR), has predicted could reach £298 billion.
“In the wake of the 2008 financial crash, the United Nations’ drugs and crime tsar, Antonio Maria Costa, reported that he had seen evidence that the proceeds of organised crime were “the only liquid investment capital” available to some banks and that without these funds it would not have been possible to have kept the financial system afloat.
“During the current economic crisis, it is very unlikely that there will be any correspondingly positive effects. On the contrary, the number of online attacks have vastly increased during the pandemic, leaving an ever-increasing number of businesses and individuals to become the victims of financial fraud, which is often perpetrated by criminals operating in foreign jurisdictions who, ironically, tend to return the funds that they have stolen to the UK so that it can be laundered.”
Author: Roger Isaacs
22 May 2020