The head of economic crime at the National Crime Agency (NCA) has said that criminals looking to launder their money by buying expensive houses amid the UK house price boom, are further pushing prices upwards. He said the scale of the problem is huge, and that the criminals use “corporate wrappers” that consist of numerous layers of linked companies to make it very difficult to trace the actual owner of the property.
Money laundering can take many forms and it effectively means taking the proceeds of criminal actions and investing in a legitimate business interest or real estate, so that the money comes out looking perfectly clean and legitimate. Different criminals use different techniques, and some have developed highly complex and involved mechanisms that enable them to launder vast sums of money.
Donald Toon, who is the head of economic crime at the National Crime Agency, said that he believes that foreign criminals with large sums of money to launder are investing in London property through various shell companies, in order to clean the money they have made from illegal activities. He said that the scale of the problem is huge. In fact, it is such a big problem that the increase in demand is pushing house prices up even further.
The average house price in Kensington and Chelsea has risen by 28% since 2012, which effectively means that criminals that are using this technique launder their money are not only cleaning their cash, but are potentially making additional profit on the move too, although there are costs associated with other elements of the process. According to one group, nearly 40,000 London property titles are held by offshore companies, which could be an indication of the scale of the problem.
In July, Roberto Saviano, the author of crime series Gomorrah and crime expert, has said that London is now the money laundering capital of the world. He said that the country does not treat it as a problem because it does not result in corpses on the street; a claim that the NCA denies, stating that they taking steps to try and curb the problem.
