Friday fraud story: back to the old school

Scales.

Good morning and happy Friday, readers.

Thank you for reading and following Financial Crime Asia – I appreciate your support very much.

This Friday, I’m enjoying a walk down memory lane with a great story of how a drug trafficker laundered some of the cash he made from selling cannabis, cocaine and amphetamines. This little piece of nostalgia has reminded me of what I love about financial crime – how people operate these networks, how they get their dirty cash in the first place and how they slip it past the noses of front line bank staff. This story is connected to around GBP1m, according to the story the Liverpool Echo, which is a drop in the ocean compared to the amount the Sinaloa cartel sluiced through Wachovia Bank and  the millions passed through HSBC in Mexico. Nonetheless, it’s a good reminder to all AML professionals that the threats of money laundering come from close to home as well as via foreign fund transfers.

The laundry

John Burton, a drug trafficker, made an estimated GBP1m selling drugs on a large scale to dealers in  the UK. He placed the proceeds of his crime into the financial system by buying one property in Spain and two luxury cars. To disguise his connection to the property purchase, Burton gave cash to a friend who acquired the mortgage from a bank and made the repayments in his name.  The same friend also helped Burton to buy a top-of-the-range Mercedes and an Audi without leaving any trail that would lead back to Burton.

Burton is already serving a nine year sentence in the UK for trafficking, and once this is spent, he will serve an extra two and a half years for money laundering. The sentencing judge criticised Burton for exploiting his family, namely his father and a cousin, to help him launder money, placing them both at risk of prosecution.

Burton’s cousin placed GBP60,000 into her bank account which she then transferred to another account, layering the transactions. She kept GBP4,000 as payment for her part, which puts the laundry rate at just less than 7 per cent,

Burton’s father was more involved in the scam. He used his father’s bank accounts and credit cards to place the proceeds of crime – an estimated GBP800,000 in seven years – into the financial system. The trafficker also used his father’s name to obtain mortgages on two properties and lied about his father’s income to secure the loans.

Sentencing, the judge handed Burton an extra 30 months on top of his sentence, and suspended sentences for his father, cousin and friend.

There’s nothing like keeping business in the family, is there?

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