The Independent is passing details of the transactions to the banks.
Mr Sarco said: “We hope our colleagues [at Britain’s National Crime Agency] will uncover what activity took place in the UK, but our main difficulty is that the relevant authorities in the Russian Federation are being less co-operative.” He said he had contacted the Serious Organised Crime Agency (which merged into the NCA last year) with information about the scam. The NCA declined to comment, saying it was unaware of any investigation.
The Russian connection is crucial to the case but the companies there who funnelled the money are proving difficult to penetrate. They appear to have been represented by proxy people in Moldova and Ukraine who were paid small sums to front for the real figures behind the transactions.
One such proxy was a Moldovan citizen listed as the guarantor for a loan made to Valemont Properties – one of the first UK firms used in the alleged scam, back in 2010.
The man, Andrei Abramov, works at Chisinau airport in Moldova. He said he was approached after graduating by a man offering him a job opening a branch of his consultancy in Moldova. When tracked down by reporters from the OCCRP, Mr Abramov claimed he was told he would be the branch manager. “It never happened though. I worked for them for four months and all I got was $100.”
The Moldovan judge ordered two Russian firms to pay a combined $408.3m to Valemont.
The money was transferred from Russia to the Moldovan bank Moldindconbank, exchanged into pounds and transferred to Valemont’s account at Latvia’s Trasta Komercbanka. The same route was used for all the alleged transfers. Moldindconbank denied breaking any rules, saying its operations have respected Moldova’s legislation and central bank rules. Trasta Komercbanka said in a statement that the case was still under investigation and that neither the bank nor its employees were involved in the alleged laundering.
Mr Sarco, heads of his country’s Money Laundering Prevention Unit, claims the rulings from the judiciary which triggered the cash transfers were improper and is investigating the judges, some of whom have denied wrongdoing.
Mr Abramov was not the only Moldovan patsy.
Another traced by the OCCRP was a small-time businessman also facing a court case for meat smuggling.
A third, Evgheni Viborov, is a dispatch driver. Despite not even being able to afford his own car, he is listed as a shareholder and director of one of the companies which court documents show paid the British front company Westburn Enterprises $500m.
Money laundering explained: Why criminals flock to the UK
One of the biggest problems of being a successful drug dealer is finding a way to make your money look like it’s been made honestly.
Key to this is obtaining official documentation or receipts that show the money has been made legally.
There are many ways of doing this, from setting up legitimate businesses that turn over lots of cash, to buying and exchanging travellers’ cheques, to corrupting legitimate businessmen to fake transactions to you.
Another way, as this story shows, is to set up front companies and make them look like their money comes from legitimate sources.
Britain is popular for such companies because it is so easy to set up a company here. An industry of company formation agents and their accompanying solicitors and accountants exist to create companies for all-comers, with few questions asked.
An agent at London-based Dudley Miles Company Services – which set up one of the 19 UK companies allegedly used in this scam – said he knew nothing of the client and was under no obligation to do so.
A Ukrainian man had ordered the company over the phone, he said. Like the other agents and accountants involved, Dudley Miles has done nothing wrong.
An Eastern European or Cypriot flavour runs through many of Britain’s company formation agents. Most are situated in small, fairly dingy offices in central London. Some, such as Albion Business Incorporations, have their website all in Russian.
Another Russian formation agent who declined to give his name explained: “Our clients like to keep their identity hidden for many reasons. Tax avoidance perhaps. They like to come to Britain because it is so much easier and cheaper to set up businesses here.”
Vince Cable’s Department for Business has announced plans to make companies disclose the identities of business owners holding more than 25 per cent of the shares. The former head of the Fraud Squad, David Clarke, now a private fraud consultant at Today Advisory, applauded the Government’s moves, but said: “We need a proper, concerted effort between law enforcement and Companies House, because at the moment we’re still handing it on a silver platter to the villains.”
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