Loophole For Large -Scale Criminal Money Laundering

The penny ante stakes bunged abroad through MSBs pales in comparison to the hundreds of billions siphoned through private banks, international banks, brass plate LLCs and even the big high street banks (once it has been cleaned up a bit).

Year after year after year.

Not for nothing is London the centre of Russian banking. Plus all the 'Stans. Plus all the other corrupt and criminal bastards around the world.

The Sunday Times published their Rich List two days ago. Somehow they didn't have Putin there as the richest man in Britain. Serious error.

Virtually every cent, penny, euro and rouble is untouchable.

Private Eye did an article on this a few years ago. There is a crappy little terraced house in Cardiff that is the head office of hundreds of offshore companies, mostly LLCs. Yeah, right, nothing to see here.
 

Chef

LE
It occurs to me that one of the biggest money laundering techniques is property.

Buy a high value building and sit on it. The property quietly increases in value and when it's sold the original purchase cash is shiny new and any capital gains tax may well be covered by the increased value of the property. Plus any money made from renting it out.

Of course this would only be viable to dodgy governments and serious crooks is a fairly obvious scam for massive scale money laundering and probably quite easy to police if desired, so obviously doesn't happen
 
It occurs to me that one of the biggest money laundering techniques is property.

Buy a high value building and sit on it. The property quietly increases in value and when it's sold the original purchase cash is shiny new and any capital gains tax may well be covered by the increased value of the property. Plus any money made from renting it out.

Of course this would only be viable to dodgy governments and serious crooks is a fairly obvious scam for massive scale money laundering and probably quite easy to police if desired, so obviously doesn't happen
Doesn't quite work like that.

When making a property purchase these days, before the contract is accepted, one has to prove that the funds used have been acquired legitimately. in late 2018 I bought a house in Scotland without raising a mortgage using capital saved over years of work in high-paying expatriate jobs. I had to provide records of payment from my employers. Luckily I had banked with the same bank all those years and statements were available.
 
It occurs to me that one of the biggest money laundering techniques is property.

Buy a high value building and sit on it. The property quietly increases in value and when it's sold the original purchase cash is shiny new and any capital gains tax may well be covered by the increased value of the property. Plus any money made from renting it out.

Of course this would only be viable to dodgy governments and serious crooks is a fairly obvious scam for massive scale money laundering and probably quite easy to police if desired, so obviously doesn't happen
An old friend has just sold a property she owned in N Yorks. The buyer is a Swiss outfit, with an office/base in the delightful old market town of Wolverhampton (really) and bought the property unseen. Despite not even seeing it the buyer paid asking price. I'm sure the cash is all perfectly clean (she couldn't care less).

There are other reasons why foreigners purchase properties in the UK. One might ask oneself why Chinese companies have purchased property in Barrow-In-Furness. Maybe it is the proximity to the Lake District or the delights of ye olde English town of Barrow. Can't be anything else. Can it?
 
It was a British protectorate after WW2, had independence then went tits up.

The UK took in refugees, who like all refugees were supposed to return, but that never happens.

Somalis, rather like Pakistanis and Eastern Europeans are good and bad, the bad making all look bad.

Oh Carrie the PMs bird is good friends with a Somali woman who devotees her time to eradicating FGM.
One of the societal problems with Somalia is that it is a state which has been racked by war for generations, rather like Iraq and Afghanistan. The educated middle classes that avoid being killed, tend to emigrate early on, leaving mainly third-raters in charge, which exacerbates the trend. Generations then grow up with innefective or downright malicious governance, violence, corruption and criminality being part and parcel of their normal.
 
Doesn't quite work like that.

When making a property purchase these days, before the contract is accepted, one has to prove that the funds used have been acquired legitimately. in late 2018 I bought a house in Scotland without raising a mortgage using capital saved over years of work in high-paying expatriate jobs. I had to provide records of payment from my employers. Luckily I had banked with the same bank all those years and statements were available.
Isn't ensuring the money has been "acquired legitimately" the raison d'etre for money laundering.

By the time the cash has been through half a dozen banks, nine LLCs (all registered in the Dutch Antilles) and seven countries nobody can tell whether the money came from the Vatican or from snuff movies and heroin.
 
Isn't ensuring the money has been "acquired legitimately" the raison d'etre for money laundering.

By the time the cash has been through half a dozen banks, nine LLCs (all registered in the Dutch Antilles) and seven countries nobody can tell whether the money came from the Vatican or from snuff movies and heroin.
Yes, so the rules can be avoided by the illegitimate big fish but not legitimate minnows.
 

Chef

LE
Doesn't quite work like that.

When making a property purchase these days, before the contract is accepted, one has to prove that the funds used have been acquired legitimately. in late 2018 I bought a house in Scotland without raising a mortgage using capital saved over years of work in high-paying expatriate jobs. I had to provide records of payment from my employers. Luckily I had banked with the same bank all those years and statements were available.
Which is why I'd imagine that one would need to have large amounts of cash needing washing to make this a worthwhile operation. Once it's up and running it would probably be accepted at face value in subsequent deals.

I've no doubt that it would be expensive to set up, however when dealing in millions/billions it'd be worth it in the long run.

As mentioned by @Tedsson above.

A lot of new build housing round our neck of the woods is owned by Chinese and rented out or not occupied and this is north London not Barrow.

Yes, so the rules can be avoided by the illegitimate big fish but not legitimate minnows.
Rather my point it's all a matter of scale, much easier to hound you over where you got £50k then some eastern European over some millions. probably safer too.

As Pratchett nearly wrote:

'Live in a slum and you're probably a villain. Own a street of them and you're a property developer'.
 

Glue_Sniffer

Old-Salt
An old friend has just sold a property she owned in N Yorks. The buyer is a Swiss outfit, with an office/base in the delightful old market town of Wolverhampton (really) and bought the property unseen. Despite not even seeing it the buyer paid asking price. I'm sure the cash is all perfectly clean (she couldn't care less).

There are other reasons why foreigners purchase properties in the UK. One might ask oneself why Chinese companies have purchased property in Barrow-In-Furness. Maybe it is the proximity to the Lake District or the delights of ye olde English town of Barrow. Can't be anything else. Can it?

Often aimed at asset protection and avoiding capital controls. Not always involved in money laundering.
 

Glue_Sniffer

Old-Salt
An old friend has just sold a property she owned in N Yorks. The buyer is a Swiss outfit, with an office/base in the delightful old market town of Wolverhampton (really) and bought the property unseen. Despite not even seeing it the buyer paid asking price. I'm sure the cash is all perfectly clean (she couldn't care less).

There are other reasons why foreigners purchase properties in the UK. One might ask oneself why Chinese companies have purchased property in Barrow-In-Furness. Maybe it is the proximity to the Lake District or the delights of ye olde English town of Barrow. Can't be anything else. Can it?
Often aiming for asset protection and avoiding capital controls. Not always money laundering.
 

CanteenCowboy

LE
Book Reviewer
One of the societal problems with Somalia is that it is a state which has been racked by war for generations, rather like Iraq and Afghanistan. The educated middle classes that avoid being killed, tend to emigrate early on, leaving mainly third-raters in charge, which exacerbates the trend. Generations then grow up with innefective or downright malicious governance, violence, corruption and criminality being part and parcel of their normal.
You’re missing out the cultural input, what was at times referred to as “human terrain”, it’s a very “clan” orientated society/culture like many parts of the E Africa/Arabian Peninsula; me against my brother, me and my brother against the family, the family against the clan, the clan against the world sort of outlook. Coupled with a society broken by continuing conflict and multiple generations raised in a “survival mode” those that have came to the UK have tended not to integrate into or only interact with UK society as little as possible. If I remember correctly less than 1% of the Somali population in the UK were engaged in recognised and recorded employment, either in PAYE or Self Assessment, the prevalence of “ABM” tattoos amongst young Somali males was also recorded as very high by one of the North of England Police Forces.

ABM = All about the money.
 

Glue_Sniffer

Old-Salt
It occurs to me that one of the biggest money laundering techniques is property.

Buy a high value building and sit on it. The property quietly increases in value and when it's sold the original purchase cash is shiny new and any capital gains tax may well be covered by the increased value of the property. Plus any money made from renting it out.

Of course this would only be viable to dodgy governments and serious crooks is a fairly obvious scam for massive scale money laundering and probably quite easy to police if desired, so obviously doesn't happen
This post doesn't make any sense.
Without an increase in value, there wouldn't be any CGT to pay....
 
Which is why I'd imagine that one would need to have large amounts of cash needing washing to make this a worthwhile operation. Once it's up and running it would probably be accepted at face value in subsequent deals.

I've no doubt that it would be expensive to set up, however when dealing in millions/billions it'd be worth it in the long run.

As mentioned by @Tedsson above.

A lot of new build housing round our neck of the woods is owned by Chinese and rented out or not occupied and this is north London not Barrow.
The British property market is very attractive to Chinese i(and other nationals) investors for a number of reasons.

Firstly as a basic investment (rather obviously) as it has typically always been a sound investment over time. If the funds are cleaned up it does not accrue to their discoverable wealth in China. Also as a nest egg in case things go tits up in the PRC and they need a bolt hole with reasonably liquid funds. You can make your own judgement as to why they would buy property in and around Barrow overlooking Morecambe Bay (I couldn't possibly comment).
 

Glue_Sniffer

Old-Salt
You’re missing out the cultural input, what was at times referred to as “human terrain”, it’s a very “clan” orientated society/culture like many parts of the E Africa/Arabian Peninsula; me against my brother, me and my brother against the family, the family against the clan, the clan against the world sort of outlook. Coupled with a society broken by continuing conflict and multiple generations raised in a “survival mode” those that have came to the UK have tended not to integrate into or only interact with UK society as little as possible. If I remember correctly less than 1% of the Somali population in the UK were engaged in recognised and recorded employment, either in PAYE or Self Assessment, the prevalence of “ABM” tattoos amongst young Somali males was also recorded as very high by one of the North of England Police Forces.

ABM = All about the money.
Like in any community, once a "gangster" culture develops, it becomes self perpetuating.
 

Glue_Sniffer

Old-Salt
The British property market is very attractive to Chinese i(and other nationals) investors for a number of reasons.

Firstly as a basic investment (rather obviously) as it has typically always been a sound investment over time. If the funds are cleaned up it does not accrue to their discoverable wealth in China. Also as a nest egg in case things go tits up in the PRC and they need a bolt hole with reasonably liquid funds. You can make your own judgement as to why they would buy property in and around Barrow overlooking Morecambe Bay (I couldn't possibly comment).
There's also the fact that the UK tax regime is pretty foreign buyer and owner friendly, compared to many similar countries.
We have no property tax (based on ownership), no residence or citizenship requirements and until recently, no increased stamp duty for foreign buyers.

There's also a political advantage to house price inflation in this country.
 
As ever the ARRSE advertising algorithms are spot bollock on the mark.

I now have a side bar telling me to contribute money for Ramadan. From Achmed's corner shop in Rochdale straight to the Qasem Soleimani Headchopping Madrassa.
 

Glue_Sniffer

Old-Salt
Which is why I'd imagine that one would need to have large amounts of cash needing washing to make this a worthwhile operation. Once it's up and running it would probably be accepted at face value in subsequent deals.

I've no doubt that it would be expensive to set up, however when dealing in millions/billions it'd be worth it in the long run.

As mentioned by @Tedsson above.

A lot of new build housing round our neck of the woods is owned by Chinese and rented out or not occupied and this is north London not Barrow.



Rather my point it's all a matter of scale, much easier to hound you over where you got £50k then some eastern European over some millions. probably safer too.

As Pratchett nearly wrote:

'Live in a slum and you're probably a villain. Own a street of them and you're a property developer'.
It's probably more to do with the fact that the very wealthy can afford specialist lawyers and accountants to sort all this out for them.
 

Glue_Sniffer

Old-Salt
As ever the ARRSE advertising algorithms are spot bollock on the mark.

I now have a side bar telling me to contribute money for Ramadan. From Achmed's corner shop in Rochdale straight to the Qasem Soleimani Headchopping Madrassa.
You don't know that.
Just look around the UK today. The nicest, most well maintained building in many areas is the local mosque.
The reason is that the local Muslim community pay for it.

Just like the local white British community used to pay for their church, but now they don't.
 

Glue_Sniffer

Old-Salt
It occurs to me that one of the biggest money laundering techniques is property.

Buy a high value building and sit on it. The property quietly increases in value and when it's sold the original purchase cash is shiny new and any capital gains tax may well be covered by the increased value of the property. Plus any money made from renting it out.

Of course this would only be viable to dodgy governments and serious crooks is a fairly obvious scam for massive scale money laundering and probably quite easy to police if desired, so obviously doesn't happen
Buying residential properties at auction and letting them out used to be method of money laundering. But that's largely been pushed out by AML requirements now.
 
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