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How the UK's "Company Factories" helped criminals from 13 countries launder £80B in stolen and looted money

Transparency International found 766 dodgy companies registered to just 6 UK addresses, formed by Trust and Companies Service Providers (colloquially called "company factories") that took advantage of the drastic understaffing at Companies House (the primary oversight body for company formation) to launder over £80 billion in stolen money smuggled out of 13 countries.

This laundering technique was also deployed by Paul Manafort, who washed his money in London.

Companies House, which oversees 4,000,000 companies in the UK, has only six staff to investigate money-laundering claims.

Setting up 766 dodgy companies is very cheap when done at scale by these company factories -- the bill for setting up all 766 could have been as low as £15,000.

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What is a laundromat?

‘Laundromat’ is the name given to complex money laundering schemes that are used over multiple years, involve thousands of companies, and use tens of thousands of transactions to ‘layer’ funds into the global financial system.

In recent years, laundromats have been exposed moving money out of Ukraine, Russia, Moldova and most recently Azerbaijan, with the transactions taking place between 2010 and 2014. Suspicious patterns of payments and the use of anonymous shell companies in leaked banking documents revealed potentially huge levels of money laundering amounting to £70 billion from just these countries.

These investigations revealed how embedded the laundromats were in each country’s economies. Entire banks had been taken over by organised crime groups in order to process illicit funds, and corrupt judges used to ‘rubber stamp’ fake debt in order to give suspect funds a veneer of legitimacy. The laundromats were used by politicians, public officials and organized criminal groups, as well as businesses for embezzling funds, disguising the origins of money, evading taxes or sanctions, paying bribes, bypassing customs fees or legitimately moving funds from high corruption risk environments to ‘safe haven markets’. Based on our initial network analysis of companies involved in these schemes, it is highly likely that what has been exposed so far could only present part of the final picture.iv Whilst currently undiscovered this could represent tens, if not hundreds, of billions of pounds in illicit wealth moving around the world, undetected by law enforcement agencies.

Hiding in Plain Sight [Transparency International]

REVEALED: BRITAIN’S OWN APPLEBYS AND MOSSACK FONSECAS AT THE HEART OF 52 GLOBAL CORRUPTION SCANDALS [Transparency International]

(via Naked Capitalism)

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