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The UK’s lightly regulated corporate landscape allows money laundering…

Member: Nifa

… So says a top forensic investigator who has alleged that the UK is at the centre of $3 billion (£2.27 billion) worth of laundered Azerbaijani money.

The so-called ‘Azerbaijani Laundromat’ was uncovered in a joint investigation by 17 European media organisations, including the Guardian and Le Monde and was published by the Organised Crime and Corruption Reporting Project (OCCRP).

The Guardian claims that the ‘Laundromat’, which ran between 2012 and 2014, was a scheme to curry influence, pay lobbyists and European politicians and to launder cash.

During that time, $3 million (£2.27 million) was channelled out of Azerbaijan every day and transferred into four, offshore-managed UK companies to be ‘cleaned’ and then spent in various countries, including Germany, the UK, France, Turkey, Iran and Kazakhstan.

According to the investigation, banking records of transactions via the four UK-registered shell companies showed that “members of the country’s ruling elite were using a secret slush fund” to make the payments and purchases, as well as “launder money, and otherwise benefit themselves.”

The forensic investigator, who conducts investigations on a global scale, said these company structures were “purposefully opaque”, with foreign criminals using two Scottish limited partnerships (SLPs) to muddy the waters.

He said that this is because no one suspects Scotland, which has never been on the Financial Action Taskforce (FATF) list of non-compliant countries. SLPs have all the advantages of a regular firm, as they have a “legal personality” and can open bank accounts.

However, they are also entirely non-transparent. If they do their business abroad, they don’t have to file records or pay UK tax and no names of ‘real people’ appear on the Companies House record.

As in many such cases, the first news came to light via an anonymous source, who leaked the information to a Danish newspaper, which shared it with the OCCRP.  Once the forensic investigation began, it was then only a matter of time before the whole picture began to emerge.

In this case the work of forensic investigators, including specialist forensic accountants, played a vital role in its success. The skills of experts such as these are often called upon by law enforcement agencies and prosecutors in order to prepare the evidence necessary to bring successful convictions.

Author: Roger Isaacs, 12 September 2017

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