Money Laundering Central – Why The UK Is A Hub For Criminal Money

Originally posted on our website - URL is https://www.sp-bx.com/money-laundering-central-uk-hub-criminal-money/

We all know the story of the Emperor’s New Clothes. How the naked emperor was convinced that only people with the right levels of intelligence and taste could see his new clothes and that they were invisible to those without the intellect or refinement to appreciate their beauty.

I want to talk about the modern equivalent –LLPs and SLPs (or, as I think of them the places where Lots and Lots of People Successfully Launder Prodigiously). In this article I’m going to look in detail at LLPs and in a follow up article which I will publish shortly, I will turn my attention to SLPs.

But, in order to do so effectively, I need to go into detail. So sit back, buckle up and prepare for the ride.

Following the release of the Paradise Papers, Transparency International (amongst many others) pointed an accusing finger at the UK regime. In particular, they highlighted a recent study by them called “Hiding in Plain Sight” in which they identified 766 UK companies that were used in 52 global corruption and money laundering cases.

In response a government spokesperson was quoted as saying “We also have one of the most transparent and accessible company registers in the world – viewed two billion times last year – meaning company information is under constant scrutiny. This is a powerful tool for identifying false, inaccurate or fraudulent information.”

Which is another way of saying, if you look really carefully, you might notice that the emperor isn’t quite so fully dressed as he might have you believe.

But wouldn’t it be better (and far more ethical) if the emperor was properly dressed in the first place, rather than rely on small children to call out “The emperor is naked” after he has gone past and the damage has already been done?

Following on from my earlier article “Who is Ali Moulaye and why does it matter?” I decided to undertake some specific research to see just how much can be gleaned from the Companies House database.

But before I do, here’s a depressing fact. If you Google Mr. Moulaye, despite the fact that his signature appears on thousands of sets of accounts relating to a huge number of shady firms in sunny places, my article (which was republished by soapbox.com) appears first and third on the list. Which seems to suggest that the hidden world of money laundering vehicles is exceptionally well hidden indeed. But let’s move on (before I get even more depressed).

The research.

I decided to select a relatively random subset of all LLPs and LPs. To do this I selected any which had the word “Impex” in its title. I had noticed when writing my previous article that this word cropped up occasionally (I assume it’s short for Import/Export) which made it a useful candidate to provide a big enough sample to have relevance without any obvious bias towards phony or criminal enterprises. How wrong could I have been?

My starting point was to obtain a full download of all current Companies House data on active entities, which is remarkably easy as CH provides a comprehensive zip file once a month as well as daily updates (See http://download.companieshouse.gov.uk/en_output.html). It is a huge file (the November file was 336MB zipped which unpacks to nearly 2TB!). Helpfully, CH also provide a sequence of smaller zip files (around 70MB which still unpack to over 300MB each) which makes for enormous spreadsheets but, once opened, they can easily be copy and pasted to smaller more manageable files.

Once I had done that, I extracted all of the LLP and LPs which had the word “Impex” in their name (a relatively straightforward task) and created two new spreadsheets – one for LPs and one for LLPs.

Then the fun began! There were 69 active LLPs and some 403 active LPs. There are many more dissolved LLPs and LPs which you can discover by querying the database direct but, for the time being, I’m going to park these.

NOTE: I am happy to make this database available to anyone else who would like to contribute to the ongoing research. There is still much to do but I wanted to write up what we have found so far. I can provide access to the Cloud location where I have stored it if you message me your email address.

Let’s start with the LLPs.

In a way they are easier because the disclosure requirements are more robust (there are few worthwhile disclosures around Scottish LPs as we will see in the next article).

Of the 69 active “Impex” LLPs I looked at, two had designated members with addresses in the UK, one with an address in France and the remaining 66 with addresses in recognised offshore locations. Or, to put another way, nearly 96% of active LLPs with the word Impex in their name have offshore Designated Members! 96%!!

28 of the 69 had annual accounts signed off by the aforementioned Mr Moulaye (in four different varieties of spellings) whilst a further 16 were signed off by Sabine Vickers/Bose (who also got a mention in my previous article).

You really need to get your head round those figures. 44 out of 69 randomly chosen LLPs had their accounts signed off by just TWO different people. There are further statistics on the way (Lordy, I hope there are statistics!) but those last two are possibly the most shocking of all.

Here are some more:

· 44 out of 69 had named “Persons with Significant Control “

· Of those 44, 40 identified their nationality across 13 different countries. They were:

o Angola – 1

o Belarus – 1

o Estonia – 1

o Kazakhstan – 1

o Kyrgyzstan – 1

o Latvia – 2

o Lithuania – 1

o Moldova – 1

o Panama – 1

o Russia – 13

o Turkmenistan – 1

o Ukraine – 9

o Uzbekistan – 4

· 66 out of 69 did not have company websites or any other meaningful, self-generated web presence (although, as we are about to find out, if you dig deep enough, you can unearth some interesting morsels of information)

Let’s start diving into some of the detail.

Given that Mr Moulaye has been central to these articles, let’s have a closer look at some of the companies for which he has signed off the accounts. Here are the 28 in full:

Now I don’t know about you but I faintly detect a hint of a pattern in there. Bear in mind (and I’m going to keep repeating this because it is SO important) that the only thing linking these LLPs is my arbitrary decision to select any LLP with the word ‘Impex’ in its name. No other form of pre-selection was employed. Which means that these otherwise unrelated entities should exhibit a fairly random set of reporting data. But the reality is that it looks anything but random.

Anyone who looks at that list and who is not shocked to the core is missing the point of this entire investigation. There is NO WAY that a randomly selected group of entities should exhibit such a strong correlation. And you also need to bear in mind that this is just the tip of the tip of the iceberg of the “Ali Moulaye” signed off accounts. There are literally (and I am not using that word euphemistically) thousands of them.

At this point, if the emperor was wearing clothes, there would be a conflagration of pants so severe that you could heat the entire City of London.

You will also notice that I have highlighted one of the LLPs in yellow – Unifront Impex LLP. Let me show you some of the things I discovered about Unifront.

It is alleged that Unifront Impex LLP was one of a number of overseas entities that washed around UAH 2,700,000,000 (about £77m) out of Ukraine.

If you read the following (translated) article (taken from a Ukrainian anti-corruption website) you will get some idea of the scale of this operation.

Now look at the income returns for Unifront. Really?

There are a large number of articles on the internet about Unifront although, sadly, not one that I could find in English.

One of the names mentioned repeatedly in the Unifront case is that of Viktor Yanukovych, the recently (2014) deposed president of Ukraine who is now living in Russia and for whom Paul Manafort, the former campaign chairman for Donald Trump who is currently under house arrest, worked. Yanukovych has been widely criticised for wholesale corruption and cronyism.

Oddly (or maybe not) his name comes up again in relation to two more of our ‘Impex’ LLPs (remember, they were selected at random) along with a third associated company. Let’s have a look at these. They are:

· Hansford Impex LLP

· Westerton Impex LLP

· Westerton Commerce LLP

There are other Hansford and Westerton LLPs but let’s focus on these for now.

Take for example, the following story – https://aworlds.com/blogs/obo-vsyom/londonskoe-obschezhitie-dlja-roshen-i-ja.html (using Google translate). It appears that a number of companies located at the same address at 43 Bedford Square are associated with Yanukovych and some of his allies. Hansford Impex and Westerton Commerce are particularly associated with a number of allegedly corrupt developments in Kiev. If you want to look further, there are a large number of articles about Hansford (including its sister company – Hensford-Ukraine LLC).

Ready for another one?

This one concerns Seletrade Impex LLP (not an Ali Moulaye entity!). Seletrade were incorporated on 10th October 2013 and, two months later in December 2013 they acquired 31.036% (994,200 shares at c €1.2 = approx. £1m) of Riga shipbuilders “Tosmares Shipyard” an entity quoted on the Nasdaq Baltic Exchange. See:

http://www.baltic-course.com/eng/transport/?doc=87369&output=d

http://www.nasdaqbaltic.com/market/?instrument=LV0000101095&list=3&pg=details&tab=security&lang=en

Bizarrely, their accounts for 2014/2015/2016 show them as being dormant and having no assets! They have just filed their 2017 accounts and lo and behold, magically, three years late, the shareholding has appeared! Although there is no explanation as to why it took three years for them to appear on the balance sheet.

Let’s do another one – Wintlane Impex LLP. This one is unusual inasmuch as it actually has a company website! Here’s the link – http://wintlineimpex.co.uk/wintline.html

The first thing you might notice is that the company can’t actually decide what it is called – Wintlane or Wintline. The domain is Wintline but the heading is for Wintlane. On the home page they are called Wintlane but on the company services page they are back to Wintline.

The good news is that they claim “The company represents all global container shipping lines: APM-Maersk, Mediterranean Shg Co, CMA CGM Group, COSCO Container L., Evergreen Line, Hapag-Lloyd, APL, CSCL, Hanjin Shipping, MOL, NYK Line, OOCL, Hamburg Süd Group, Yang Ming Marine Transport Corp., K Line.” They ship by road, rail, air and sea. They ship oversize and heavy loads. They work in cooperation with all seaport and terminal companies. Wow! They must be making a fortune! Let’s have a look at their accounts.

For y/e 30/11/2016 they had zero turnover. For y/e 30/11/2015 they had zero turnover. For y/e 30/11/2014 they had zero turnover. For y/e 30/11/2013 they had zero turnover. For y/e 30/11/2012 their turnover was £1,050,371. For y/e 30/11/2011 it was £946,110. For y/e/30/11/2010 it was £933,888. It was incorporated in 2009.

Now here’s a strange thing. The domain name was registered on 26/05/2012. Which means that during the first full year in which they had a website, their turnover dropped to zero. And has remained there ever since. Moral: naked emperors should not have websites.

The “Person with Significant Control” (PSC) is given as a Mr Ilya Krasilnikov, listed as Russian. His address is shown to be the same as the company’s registered office address (Unit W17 Mk Two Business Centre Barton Road Water Eaton, Bletchley, Milton Keynes, Buckinghamshire, MK2 3HU) and a date of birth in September 1979.

However, also on the Companies House database is a Mr Ilja Krasilnikov, listed as Lithuanian and a director of Odox Ltd, but who was also born in September 1979 and who gives two different addresses:

Current: 9 Heathwaite Crescent, Liverpool, England, L11 2XE

Previous: Flat B 918, Brighton Road, Purley, Surrey, United Kingdom, CR8 2LN

The registrant of the web domain for Wintline (or Wintlane) gives his (or her) name as Zolotuchin and an address of 914a Brighton Road, London, Surrey, CR8 2LN. Which is interesting, as a former director of Odox Ltd is named as Vitoldas Rauch, from Lithuania, address 914a Brighton Road, Purley, Surrey. At which point you feel like you are going round in circles.

And for my final case study, let’s look at an LLP that is now dissolved (but no less interesting for that).

It’s called Vassa Impex LLP. It was incorporated on 14 February 2012 and dissolved on 23 September 2014, so it wasn’t around for long. Its designated corporate members both gave the well-known 43 Bedford Square office as their correspondence address but both were identified as IBCs from the Seychelles. They filed one set of accounts for y/e 28/02/13 showing current assets of £28,063. And then it was dissolved. No PSC was ever registered. According to an article in El Confidencial Digital – https://www.elconfidencialdigital.com/politica/Empresas-tecnologia-financiaron-Pablo-Iglesias_0_2640335953.html – it could have been a conduit for Iranian money.

“Vassa Impex LLP: Company with headquarters in London that ordered a payment of 50,000 euros through the Finnish bank Sampo Bank in March 2013. According to the British business register -with the code OC372459-, the company ceased its activity and it was dissolved in September 2014. It is not officially known what its sectoral activity was.”

However, it also shows up in reporting on the Azerbaijani laundromat. For example – http://www.dv.ee/novosti/2017/09/13/pod-rukovodstvom-rehe-danske-byl-ofshornym-raem

Not bad for one little LLP which was only around for less than three years.

Of course, there is no way of knowing how accurate all this reporting is but, nonetheless, it simply shouldn’t be the case that UK legal entities have such poor governance that someone from the other side of the world can go online, buy one off the shelf, install a couple of offshore companies as designated members, hide their own identity completely and then use that legal entity to open bank accounts at various locations around the world which might not be as careful as those that you and I work for.

Bear in mind once again that this is just a tiny sample, selected at random but which turns out to have numerous connections to major money laundering and corruption schemes. And some of the information provided by these LLPs is so shot full of inconsistencies that they are dodgier than a naked emperor on a catwalk.

The other thing that happens all too frequently is that they will shut down an LLP and then open up a Scottish LP (or vice versa) in quick succession, which almost certainly allows them to keep operating their bank accounts while obfuscating the paper trail of any interested parties.

You might ask what can be done about this.

Step 1. Make it a legal requirement for all UK LLP and LP entities to have a UK domiciled natural person as one of its members. We simply must have the ability to achieve proper oversight of the corporate governance of any UK legal entity.

Step 2. Companies House should either employ more than the six people (who are allegedly the entire complement of AML investigations staff working there) or, alternatively, install what would be relatively straightforward software to do what I’ve done manually – look for patterns, outliers and anomalies in the data to focus their attention where it really counts.

Step 3. If you believe Companies House, 2 billion people get to take a crafty peek at our naked emperor every year. Far more people need to emulate the little boy in Hans Christian Andersen’s story and start shouting “the emperor has no clothes”. It’s not like the emperor is mooching around the alleyways of London at the dead of night. He’s driving down the mall in broad daylight in a glass coach.

In part two of this series of articles I will turn my attention to Scottish Limited Partnerships. They were at the heart of the Moldovan Laundromat and reveal further evidence of daylight nudity (I mean robbery).