Proceeds of Crime - Where is the Money? - Accredited Financial Investigator: Mark Hayes Corporate Investigations Team - Leicester City Council

Estimated Amount of Money Laundered Every Year

The International Monetary Fund estimates that 5% of the worlds GDP is laundered every year. This equates to approximately $1.5 trillion dollars, €1.3 trillion euros or £1 trillion pounds Proceeds of Crime Act 2002 Amount of Money Laundered

How to launder your €1million euros in 3 easy steps

Step 1 - Placement Deposit your money in a bank. This is the riskiest stage of the process! To prevent banks from reporting you to the authorities keep your deposits well below €15,000 euros and spread it out over a number of different accounts and banks Suggest €10,000 euros - requires at least 100 different accounts in 20 or more banks Proceeds of Crime Act 2002 How is Money Laundered?

Step 2 - Layering Otherwise known as ‘move your money around like crazy!’ This is possibly the trickiest but most fun stage of the process! Try: Buying expensive items – houses/cars/works of art/precious gems and jewelry (say 30%) Changing currencies (say 20%) Invest in legitimate businesses (say 50%) Aim to make your criminal proceeds difficult to trace and appear legitimate Proceeds of Crime Act 2002 How is Money Laundered?

Step 3 - Integration Otherwise known as ‘collecting your laundry!’ At this point your money is no longer dirty and comes back to you through a seemingly legitimate transaction like: Dividends through your savvy investments in the various business ventures – 100 to 500K euros a year The sale of one of your particularly rare art pieces – 200K euros Proceeds of Crime Act 2002 How is Money Laundered?

The cost of doing business To assist and facilitate in ensuring that all of your business transactions are ‘smooth’ you will typically have expenses consisting of: Fees Bribes Taxes Even minus the costs of doing business you can still expect to make up to 80 cent on every euro and extract your money in as little as 2 or 3 years!! Proceeds of Crime Act 2002 How is Money Laundered?

What if you are unfortunate enough to get caught?

Penalties If convicted of a money laundering offence then the penalty for this, on indictment, is up to 14 years imprisonment, a fine or both. This is applicable for offences of either: S.327 (concealing criminal property) S.328 (arrangement in relation to criminal property) S.329 (acquisition, use or possession of criminal property) Proceeds of Crime Act 2002

Further Consequences If convicted of a money laundering offence under section 327 or 328 then you may well find all your assets are confiscated. As these are classed as ‘schedule 2 offences’ the ‘general criminal conduct’ provisions are triggered. ‘General criminal conduct’ means any criminal conduct of yours, whenever the conduct occurred and whether or not it has ever formed the subject of any criminal prosecution. Proceeds of Crime Act 2002

POCA as a Deterrent

NAO Headlines (UK POCA Attainment only): £155m – Collected by enforcement agencies from confiscation orders in (£133m in ) £1.61bn – total debt outstanding from confiscation orders at September 2015 (£1.41bn as September 2013) Overall, the accrued penalty interest now accounts for 29% (£471 million) of the total outstanding amount, much of it from orders that are 5 years or older. Proceeds of Crime Act 2002

NAO Headlines cont’d: The number of confiscation orders imposed has fallen across all main types of offences (e.g. the number of orders imposed for drug-related money laundering offences fell by 47%). Offences such as trading standards infringements however have increased but these accounted for less than 2% of orders imposed in Law enforcement and prosecution agencies have fewer financial investigators than 2 years ago. Proceeds of Crime Act 2002 Impact of POCA

Local Authorities and POCA

Fraud –any benefit received as a result of fraud offences can be subject to a POCA confiscation investigation. Commercial Fly Tipping – any payments received in respect of illegal dumping of waste can be considered as criminal benefit. Planning – Benefit can be obtained as a result of criminal conduct for offences under the Town & Country Planning Act Offences are committed where an activity is carried on which was required to ceased by an Enforcement Notice. Houses of Multiple Occupancy (HMO) - Landlords renting properties that are either unfit or in breach of planning who are prosecuted for breaching enforcement notices can be considered for confiscation. Market Stall and eBay Sellers – those involved in selling counterfeit goods provide easy pickings as eBay & Paypal records provide easy access to records relating to historic sales. Proceeds of Crime Act 2002 LA & POCA

Rogue Traders – these are individuals who prey on vulnerable consumers often taking their lifesavings for unnecessary or sub- standard building work. Consumer Protection Regulations from unfair trading (CPRs) – superseding the Trade Description Act, where defendants’ have miss sold items or misled the consumers by omission. Housing Benefit Fraud – If benefit payments used to service mortgage then property becomes part of the criminally acquired assets. Food Law Enforcement – potential use of selling unfit food or unlicensed trading could result in a quantifiable benefit from criminal conduct. Licensing – again need to consider circumstances but POCA being used by Gambling Commission so could be used for unlicensed gambling machines, also unlicensed premises used for entertainment and sale of alcohol. LA & POCA Proceeds of Crime Act 2002

How Can You Help?

1)Is it a criminal offence that you are investigating? 2)Is it likely to be prosecuted? 3)Have they benefitted financially from their offending? 4)How much do you think they have benefitted financially? 5)Do they appear to live beyond their legitimate means? 6)Do they have an excellent credit rating with excessive monthly liabilities? 7)Are they employed and if so what is their occupation? 8)Do they appear to live a ‘lavish lifestyle? (i.e. Exotic Holidays / New Car or Cars / Private Number Plate/s / Live a cash rich lifestyle / a Member of a distinguished club / Appear to have considerable disposable income) 9)What assets are you aware they have? (i.e. House / Car / Cash / Savings Accounts / Other) 10)Are there any other adults residing with them at their home address? 11)Appear to have the latest technology / gadgets? If so, speak to your Financial Investigator. How Can You Help? Proceeds of Crime Act 2002 When undertaking your investigations consider:

Any Questions? Mark Hayes – AFI Mob: