Tough times await Altaf in money laundering probe

LAHORE: Granted bail till July 9, 2015, the embattled MQM Chief Altaf Hussain will again be appearing in a fortnight’s time before the London Police at a juncture when the British Crown Prosecution Service is adamantly curbing the business of whitening the ill-gotten wealth without paying any heed to the statures of the individuals or institutions involved in money laundering.
Arrested on June 3, 2014 during the course of a money laundering investigation initiated in July 2013 by the London Metropolitan Police, Altaf Hussain has already been granted two bail extensions - the first in July 2014 and the second on December 3, 2014.
So it remains to be seen if the MQM boss succeeds in getting yet another reprieve from the London Police on July 9 or the law takes its course in case of any suspected financial crime committed on the British soil.
A review of some of the major money laundering cases, either investigated by the British police on the legal advice of the Crown Prosecution Service or prosecuted by it in the magistrates’ courts and the Crown Court in recent times, can help one gauge the mood and level of determination of this agency, which is operating with a budgetary outlay of more than £592 million and ably assisted by 6,840 staffers.
(Reference: The 2012-13 Crown Prosecution Service website details)Headed by the Director of Public Prosecutions, the Crown Prosecution Service decides whether a suspect should face criminal charges and be prosecuted or not.
Although the oversight is provided by the sitting Attorney General for England and Wales, who is entrusted with the task to answer on this agency’s behalf in the British Parliament, the chief legal adviser of the Crown has no influence over the course of prosecutions.
The Attorney General in Britain certainly comes into play if issues pertaining to national security somehow crop up during probe, and does grant permission to prosecute in a small number of offences, but that happens very rarely.
Here follow some of the most prominent money laundering cases that have been probed in the United Kingdom fairly recently: Just about nine months ago in October 2014, at least 19 front companies in the United Kingdom were facing a probe into one of Europe’s biggest money-laundering operations, allegedly forming part of a conspiracy to make $20 billion or £12.5 billion of dirty Russian money look legitimate with the help of firms incorporated in the United Kingdom.
The scandal had gone on unchecked for four years before being unveiled in May 2014 by investigators in the former Soviet republic of Moldova.This is what an esteemed British newspaper “The Independent” had stated in its October 15, 2014 edition: “These front companies then sued each other in courts in Moldova, demanding the repayment of hundreds of millions of pounds of loans. A judge in Moldova, a small Eastern European country whose legal system is not considered as robust as those in Western Europe, would rule in favour of the claimant company, which would then receive the cash from the other front firm - with an all-important signed court document ordering the debt to be paid.”
This newspaper, having an average daily circulation of around 64,000 during March 2014, had maintained: “But rather than being transferred from one legitimate British company to another, the funds were being routed from Russia, where gangs from around the world go to launder money from corruption, drug dealing, prostitution rings and people smuggling.”
Research shows that the UK bank accounts involved in this case included the ones opened at HSBC, the Royal Bank of Scotland and the London branch of renowned Swiss bank UBS. Interestingly, while HSBC was fined $1.9 billion by United States in 2013 for its involvement in money laundering, the Royal Bank of Scotland had to pay penalties amounting to £5.6 million in August 2010, £750,000 in December 2010, £2.8 million in 2011, £62 million in 2013 and £14.5 million in 2014 for financial wrongdoings.
As far as the reputation of Switzerland’s UBS Bank is concerned, its France Branch was fined $13 million in 2013 for providing assistance in whitening grey cash.In the aftermath of this mammoth scam, the United Kingdom Chapter of the internationally-acclaimed corruption watchdog “Transparency International” had viewed: “We at Transparency International-UK are pleased to see an investigation of this type reported in the mainstream media. For too long the UK and other major financial centres have been acting as a safe haven for the world’s corrupt to hide their money - be it in a Highgate mansion or through private schooling for their child - and it is barely being talked about. Many journalists and NGOs feel unable to speak out due to the libel risk. Meanwhile, money which is often originally intended for a public budget in a developing country is instead sitting in Britain, enriching London’s service providers and enabling those responsible to enjoy the proceeds of grand corruption.”
The “Transparency International” had gone on to state: “This is why we believe the UK and other “facilitator” countries represent one half of an equation that allows corruption to flourish worldwide. So far, our research has highlighted a number of weaknesses in the British legal systems that make life easy for those looking to hide ill-gotten gains. We are now undertaking further work into the sectors in the UK we consider to be at risk of being used to launder corrupt money, particularly in London.”
In January 2014, a gang using banks in Manchester city to launder more than £20 million drugs money was also sent behind bars by British institutions keeping a vigil on money-whitening activities.
The police were watching the four defendants - Kamran Butt, Steven McKenna, Instar Ahmed and Sean Moore - in two separate undercover operations, code-named “Crocodile” and “Mosquito.”
The defendants were actually recruited by operatives in the Middle East.Police said crucially, all the currency notes recovered from the culprits were contaminated with higher than normal levels of a drug called “Diamorphine.”
(Reference: The January 16, 2014 edition of the “Manchester Evening News”)And in June 2013, a gang that laundered £19 million for foreign criminals was jailed for more than 47 years in the United Kingdom.
The eight men cleaned dirty cash for criminals from the Middle East and Pakistan by funneling the money from drug deals through legitimate bank accounts.Surveillance teams from the Serious Organized Crime Agency (SOCA) had monitored the gang as its members moved tens of thousands of pounds around the country in plastic bags.
The investigation had also resulted in the seizure of more than £730,000 and 1.5 kg of heroin.Officers found the group had laundered about £19 million between January 2011 and March 2012.
(Reference: The June 2, 2013 edition of the “Mail Online”)
Similarly, during March 2015, the Bank of Beirut (UK) Ltd was fined 2.1 million pounds by British authorities and was barred from signing up new customers from some jurisdictions for 126 days after misleading the banking watchdog over its financial crime controls.
(Reference: The March 5, 2015 report of renowned news agency “Reuters”)
According to the January 20, 2014 edition of “The Independent,” the “reported cases” of money laundering in United Kingdom had surged 309 per cent to £288 million in 2013, up from £70 million recorded in 2012.
The 2013 UK money-laundering figure of £288 million was actually quoted by the renowned London-based accountancy network “BDO International,” which has member firms in 151 countries and employs around 60,000 global partners who had collectively earned revenues in excess of seven billion dollars last year.
This “BDO International” figure of £288 million only pertains to “reported cases” in Britain, otherwise the 1999 UK Customs and Excise Department numbers cited in Karen Harrison and Nicholas Ryder’s book “The law relating to financial crime in the United Kingdom,” were much higher.
This afore-named book had calculated that an amount between £19 billion and £48 billion used to be laundered in Britain on yearly basis some 16 years ago.
The same figure related to United Kingdom was quoted by author J. Harvey in his 2005 book “An evaluation of money-laundering policies.”
The British Financial Services Authority, in its June 6, 2011 report, had revealed that the amount of dirty money cleaned in United Kingdom every year rested between £23 billion and £57 billion.
Talking about the annual international money laundering figures, the United Nations Office on Drugs and Crime had estimated in 2009 that an amount between $800 billion and $ 2 trillion was laundered on Earth annually, which was roughly equivalent to two to 5 per cent of the global GDP figures six years ago!
The cases of reported fraud valued at over £50,000 in the United Kingdom had increased from 33 in 2012 to 39 in 2013, despite the total value of fraud cases dropping £320 million to £1.05 billion during the one year period under review.
It might also be eyebrow-raising for most readers, but the global banking industry had racked up more than £166 billion in fines, settlement fees and provisions between 2009 and 2013 for offences ranging from currency market manipulation to breaching sanctions against Iran and Sudan, money laundering for Mexican drug barons and abusive mortgage practices in the US.
The Bank of America had to pay £66.40 billion for financial frauds, JP Morgan & Chase had to pay fines of £35.78 billion, the Lloyds Banking Group had to pay penalties of £12.72 billion, the Royal Bank of Scotland had to pay fines of £8.47 billion, the Barclays Bank was made to deposit £7.89 billion in fines, the CitiGroup was made to pay £7.57 billion in fines, the HSBC had to pay£7.21 billion in fines and the Deutsche Bank had to pay £5.63 billion.
The list of banks charged for financial crimes is fairly long though.
(Reference: The November 12, 2014 edition of another prestigious British newspaper “The Guardian”)
It is imperative to note that an eminent British politician and a former member of the European Parliament, Nicole Sinclaire, was charged with money laundering in July 2014.
According to a July 23, 2014 report of the “BBC News,” she was accused of making false and dishonest submissions for travelling expenses and transferring the proceeds of fraud through a bank account.
In February 2015, she had appeared in Birmingham Crown Court to plead not guilty to charges of money laundering and was bailed out till October 19 this year, when she would be standing a for a two-week trial.
And this month in June, the father of a globally-known British singer Gabriella “Ella” Henderson was charged with a total of seven offences following a two year probe into his financial dealings.
It was widely reported that the former car salesman made his money building properties in Dubai. Ella’s mother was also arrested in the same case.
Ella, the recipient of UK platinum certification in January 2015 after her album had peaked at Number 1 position on the UK Albums Chart in 2014, had also featured in the 2012 edition of a reality show “X-Factor,” which is the biggest television talent competition in Europe and had attracted 19.7 million viewers in UK alone.
(Reference: The Guardian, The Independent and The Daily Mirror)
The Standard Chartered Bank of Britain had once paid $330 million in fines for money-laundering hundreds of billions of dollars for Iran. The money laundering took place in the 2000’s and had occurred for “nearly a decade to hide 60,000 transactions worth $250 billion.
Last but not least, the London branch of South Africa’s Standard Bank was fined £7,640,400 by the British Financial Conduct Authority for failings relating to its anti-money laundering policies and procedures over corporate and private bank customers connected to politically exposed persons.
(References: The December 6, 2012 and December 11, 2012 editions of the New York Times)