St Andrews University, along with University College London, have been identified as examples of prestigious universities that have received financial donations of dubious origin – although there is no suggestion that they were complicit in any illegal activity or were aware of the primary source of the funds. Other recipients of the proceeds of criminality and money laundering identified in new research by Transparency International UK (TI-UK) include independent schools, luxury interior design firms, high street banks, and blue chip law firms.
Through forensic analysis of more than 400 corruption and money laundering cases – amounting to an estimated £325 billion – the report, At Your Service, presents new research that sheds fresh light on the role played by UK services and institutions in the biggest corruption scandals of recent decades.
This in-depth investigation identified nearly 600 UK businesses, institutions and individuals who have helped corrupt individuals, unwittingly or otherwise, obtain, move and defend their ill-gotten gains.
TI-UK’s research found:
- More than £4.1 million in suspicious funds were paid to 178 different UK educational institutions from the various industrial-scale money laundering operations exposed by the Organised Crime and Corruption Project (OCCRP) and its partners. This cash found its way to prestigious independent schools like Charterhouse and Harrow, and world-class universities including University College London and the University of St Andrews.
- A total of £8.3 million was paid to 37 UK architectural and interior design firms from anonymous shell companies with Baltic bank accounts. Corrupt individuals may contract these businesses to carry out work on property they own to increase its value and launder money at the same time.
Other companies that came into contact with this £325 billion included: 118 luxury goods and services firms, 81 law firms, 86 banks and financial institutions, 62 accountancy firms, including all of the Big Four. Because much of this activity is shrouded in secrecy, the businesses identified by TI-UK only represent a small piece of a much larger puzzle. The true involvement of UK firms and institutions is likely to be far higher.
At Your Service exposes how weak oversight has provided an environment that facilitates harmful abuses of power abroad and allows dirty money to impact almost every part of the UK economy. Services such as private education, architects and interior designers, and public relations firms fall outside of anti-money laundering rules. This means they are under no obligation to carry out checks on their clients or their sources of wealth, allowing corrupt individuals to spend their money with impunity.
Introducing the report, Duncan Hames, Director of Policy at Transparency International UK, said: “We’ve known for a long time that the UK’s world-class services have attracted a range of clients, including those who have money and pasts to hide. Now, for the first time, we have shed light on who these companies are and how they have become entangled in some of the biggest corruption scandals of our time. This should act as a wake-up call for Government and regulators, and deliver much-needed reforms to the UK’s defences against dirty money.”
Daniel Bruce, Chief Executive of Transparency International UK, continued: “Government and law enforcement agencies have made real progress in recent years to reduce the places for corrupt individuals to hide, yet our findings confirm it is still far too easy for criminals and the corrupt to seek impunity with the assistance of UK businesses. Despite the dedication of many committed professionals in the fight against corruption, there remains too much poor practice to be able to assume bad behaviour is confined to a few rotten apples. Businesses and Government should redouble their efforts, through resource and will, to remove the helping hand for those who have abused positions of power and stolen from their people.”
TI-UK is calling for a radical overhaul of the UK’s anti-money laundering supervisory regime to establish a credible deterrent against British firms turning a blind eye or actively helping corrupt individuals, and urgent action to establish the true extent of the unregulated sector’s exposure to dirty money.
Other key findings from TI-UK’s research include:
- Clients at 10 UK-based banks sent and received more than £500 million worth of suspicious laundromat funds during a ten-year period. Nearly £200 million of this total was paid into just five bank accounts.
- More than a third of the 17,000 suspected UK shell companies (6,073) we identified were registered at just 10 English addresses. Of this total, 1,455 were registered at one address in Birmingham city centre. The total number is likely to be much higher given Companies House has deleted data for firms dissolved over six years ago.
- Nearly £9 million processed by laundromats was paid to 32 UK law firms, with some of the payment references bearing the hallmarks of trade misinvoicing – a common technique used to avoid scrutiny when moving illicit funds.
- Just a handful of people were responsible for signing off hundreds of accounts for UK companies linked to money laundering and corruption, with one individual authorising 516 sets of accounts.