Fraud, But No Money Laundering

Posted on Sep 19, 2020. by NTI

All the News You Will Ever Need Every Day of the Week on the NTI App: Free To Download and Enjoy

There are a couple of news items we have been investigating here in the NTI newsroom that don't seem to be compatible. The first reveals that, so far in 2020, the Financial Conduct Authority (FCA) has discontinued seven out of 14 of its criminal investigations into possible breaches of the UK’s anti-money laundering (AML) rules. This means that, staggeringly, to date, the FCA has still not brought a single criminal prosecution under the current anti-money laundering legislation. It appears that people are still bad and dishonest (obviously), but not enough for the FCA to be arsed to prosecute them.

However, the Financial Times reports today (Saturday 19 September) that under plans set out by the Department for Business, Energy and Industrial Strategy (BEIS) on Friday, its Companies House agency will have to verify the identity of anyone seeking to file company information or register as a director, and directors may not be appointed until checks are carried out. Such directors haven't even had the chance to be bad (an opportunity many will seize with both hands once they are let loose on a company), when checks on them are being tightened. 

Since 2019 the FCA has stated the intention of achieving its first ever criminal prosecution for breaches of the AML rules, but just isn't rubbing its hands in glee over the prospect. However, notwithstanding this intention, it has only ever imposed fines for breaches of the Money Laundering Regulations. We shouldn't entirely underestimate the FCA's intentions, however, as one of the fines imposed was a rather juicy £38 million slapped on Commerzbank for AML failings. An FCA spokesperson got a bit shirty when questioned about this policy, saying that the regulator only brought prosecutions “in the most egregious cases”, and pursued civil or regulatory sanctions in all others. He failed to add "so there", but it was written all over his face.

Meanwhile, Lord Callanan, minister for corporate responsibility, said: “Mandatory identity verification will mean criminals have no place to hide, allowing us to clamp down on fraud and money laundering and ensure people cannot manipulate the UK market for their own financial gain.” He is after those pesky directors before we have any shred of evidence they are pesky in the slightest. However, much of this has come to light alongside the recognition that directors of some companies are taking advantage of 00 Sunak's beneficence, these fraudsters exploiting the Government’s bounce back loan scheme, designed to help companies hit by Co ... blah, blah, blah. 

“The Covid-19 crisis has only served to expose further just how inaccurate a lot of data held at Companies House is,” said Jonathan Tickner, partner of law firm Peters & Peters, who may or may not be a director of his uncle's prosthesis manufacturing company, but when we checked the information was a bit sketchy. At the moment, the Companies House register includes almost 4.5 million UK businesses, but it operates in much the same way it did 150 years ago, giving soiled children with spotted neckerchiefs and jauntily cocked hats rolls of paper to run down the road with, to be confronted by hoards of singers hailing them to consider themselves at home. However, this means that criminals have been able to set up seemingly legitimate shell companies without the most basic identity checks. All they need to do now is to launder money through their mate Bill Sykes and not be prosecuted for it and we will all have come full circle.


« Back to articles