City of London Police seize more than
£2 million in cross-border money
laundering operation

30 July 2020

Media reports from 24 July 2020 inform us that the City of London Police (COLP) has seized more than £2 million held in British bank accounts as a result “of profits made by an Italian mafia gang”. We are told that Westminster Magistrates’ Court ordered the forfeiture of the cash after detectives submitted evidence that it was being channelled through London in a money-laundering operation.


The story gives further details as to how police discovered one of the accounts was receiving funds from a number of companies in Italy. These funds were then being sent to a second UK company account, which had been opened using false addresses. COLP concluded that “the accounts were being used for “layering”, where transactions across multiple accounts disguise the original source of funds.”

Tackling illicit finance through asset denial

The forfeiture order would have been obtained under provisions created by the Criminal Finances Act 2017 (CFA), which allow accounts to be frozen by means of Account Freezing Orders (AFOs), and ultimately to be forfeited by means of a Forfeiture Order, if a Magistrates’ Court is satisfied that the funds in the account represent the proceeds of crime or are intended for use in crime.

With this action COLP joins the ranks of law enforcement agencies deploying the draconian CFA asset freezing and forfeiture tools (in force from January 2018); it follows on the heels of the Metropolitan Police’s announcement on 23 April 2020 that it had obtained a Forfeiture Order in the sum of €1.9m following a cross-border money laundering investigation; earlier that same month the National Crime Agency (NCA) reported it had recovered $8 million linked to “international organised crime”; and, the Serious Fraud Office announced in April 2019 that it had secured the (then) “largest seizures of its kind” using new asset forfeiture powers of £1,522,756.72.

See our related blogs: Account Freezing Orders – Court makes €1.9 million Forfeiture Order; and SFO secures “largest seizures of its kind” using new asset forfeiture powers

Indeed, the NCA’s Annual Report 2019-20 published on 21 July 2020 highlights that, over the reporting period, the agency’s work to tackle illicit finance resulted in “almost £150m of criminal assets frozen or seized and £9m forfeited."

Paul Curtis, of COLP’s Financial Investigation Unit, emphasised the force’s intention to use the full range of available measures: “Police will make every effort to cut access to money-laundering routes, which is key to defeating organised crime.”

With a number of recent high profile forfeiture cases it is clear that, even during the current coronavirus crisis with the police and court system facing unprecedented challenges, “asset denial” enforcement work remains very active and AFOs appear to be the law enforcement tool of choice.

Further information

For further information on the issues raised in this blog post, please contact a member of our criminal litigation team.

 

About the authors

Jonathan Grimes is a Partner in the Criminal Litigation Department who specialises in serious and complex criminal cases. He represents individuals and organisations in all areas of financial services and business crime as well as health and safety and related areas. He has acted in numerous cases involving allegations of financial wrongdoing and has experience of investigations by SFO, FCA, HMRC, CMA, NCA and the police as well as a number of foreign investigative authorities. He has particular expertise dealing with law enforcement applications that seek to freeze or seize assets, including Account Freezing Orders and other applications made under the Proceeds of Crime Act (POCA). He frequently gives advice on money laundering issues including on the making of suspicious activity reports (SARs).

Ed Smyth is a Senior Associate in the Criminal Litigation Department and represents individuals and corporates involved across the full spectrum of criminal and quasi-criminal matters. He has considerable experience of confiscation and asset forfeiture proceedings and of challenging the exercise of search and seizure powers. He has acted in cases involving the SFO, the NCA, HMRC, the Information Commissioner, the Electoral Commission and various professional disciplinary bodies.

 

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