How accountants can help stop professional money launderers

What are professional money launderers?

Professional Money Launderers – or PMLs – are people who, for a fee, provide services to organised crime groups (OCGs) by laundering the proceeds of their crimes. They launder for multiple OCGs and don’t concern themselves with how the proceeds were generated – whether drug trafficking, human trafficking or tax fraud.

PMLs operate globally. They facilitate the movement of dirty money through multiple jurisdictions and are often based in countries where they (wrongly) think they are out of reach of UK Law Enforcement. They use multiple methods and schemes to hide the true source of funds. This includes using the expertise, skills, influence or access of others.

The impact on the accountancy sector

People working in regulated sectors, including accountants, are of great interest to PMLs. By exploiting regulated and professional businesses or individuals, PMLs can add a veneer of legitimacy to their laundering techniques. They try to hide in plain sight and hope the system isn’t dynamic enough to catch them.

Read more: Money laundering: 4 signs to watch for

HMRC’s criminal investigations have identified several ways in which accountancy professionals can be used in money laundering schemes. For example, PMLs might use trust and company formation services to conceal the ownership of criminal assets and/or facilitate the movement of illicit funds through secrecy jurisdictions.

They may use criminally complicit professionals to falsify accounting through false bookkeeping or to create false documents to facilitate trade-based money laundering. In addition to using its own tools to disrupt the activities of those individuals, HMRC also works with supervisors to share insight and intelligence, and to leverage other capabilities to make professional life for these complicit individuals extremely difficult.

However, accountancy professionals used by PMLs may be unaware of their role in facilitating multi million-pound money laundering schemes. In such circumstances, HMRC looks to focus on education, building understanding, and helping professionals spot PML exploitation and take the necessary next steps.

How the accountancy sector can help the fight against money laundering

The more HMRC knows about PMLs, the better it can respond. The submission of Suspicious Activity Reports (SARs) is key to informing HMRC. These reports are of significant value, including in ways that are not immediately apparent. For example, HMRC uses all non-sensitive SARs as part of its routine risk processes, including its ongoing intelligence development against identified PMLs.

HMRC is reaching out across the regulated sector to reinforce the value of SAR reporting to help it build understanding of PML networks, and recommends that accountants who need more information about submitting SARs and how to submit them visit the National Crime Agency SAR webpage.

To hear more about how PMLs operate and what HMRC is doing to disrupt them, watch HMRC’s on-demand webinar.