Officers from the North East Regional Asset Recovery Team (RART) appeared at Teesside Crown Court last week where they were granted permission to freeze the bank accounts of two men as part of a national crackdown on money laundering.
The national day of action, which was held on February 28, was coordinated by the newly formed National Economic Crime Centre (NECC) and saw officers across the country appearing before the courts to ask for permission to freeze 95 bank accounts, containing an estimated £3.6million.
The money in the accounts is suspected to be either the proceeds of crime or intended to be used for criminal purposes.
A total of three bank accounts opened in the North East will now be frozen for nine months while officers carry out their investigations. Two of the accounts, belonging to a 23-year-old former student who had been living in Newcastle, contained more than £127,000.
The accounts which have been targeted are held mainly by overseas students studying in the UK who may be unaware that operating a bank account in this manner is potentially illegal. The accounts were identified by a bank as part of their anti-money laundering processes and officers from the NECC believe that the students are likely to have been targeted by organised crime groups, specifically to launder the proceeds of crime.
Account Freezing Order applications were made to magistrates’ courts nationwide to secure £3.6 million pounds, pending investigation. If the investigation can prove that the funds are the proceeds of crime or were intended to be used in unlawful conduct, they will be forfeited.
Members of the financial sector have been fully engaged with the NECC to tackle this threat. One bank took a ground-breaking stance to cooperate on a wholesale, evidential basis from the outset. This resulted in the identification of the large number of suspect accounts which will allow officers from the NCA, HMRC, MPS, CoLP, Regional Organised Crime Units, and Kent and Essex Serious Crime Directorate to simultaneously apply for orders using six courts across the country.
Matthew Bradford, Head of Operations for the NECC, said: “Criminals are versatile and will use any opportunity to exploit potential weaknesses to secure criminal profit.
“This operation demonstrates the power of working collaboratively across law enforcement and the private sector. I am particularly grateful for the proactive stance taken by the bank in helping to identify this threat.”
In some cases students involved may not have full knowledge of the scale and seriousness of the crimes committed.
Some international students are more at risk due to the structure of the banking system in their home country. Where a country applies controls and limits to personal foreign exchange transactions, criminals will seek to circumvent those controls by taking advantage of legitimate routes for sending money overseas.
The methodologies associated with money laundering identified across the frozen accounts, where funds were received other than from recognised sources, included:
- Cash payments directly into accounts from Automated Service Devices (ASD)
- Cash payments directly into the account, either by ASD or otherwise, which show a pattern of characteristics known to be associated with money laundering techniques. For example, small and frequent cash deposits to avoid scrutiny by the bank and law enforcement which would otherwise be described as ‘smurfing'
- In this operation, international transfers from China were declared as financial support to an overseas student but then used by criminals for non-student related activities and
- The funds sent to the accounts, were used to buy goods which were exported to China without any connection between the party ordering the goods and the source of the funds into the account.