£100 million money laundering conviction: Lessons for accountants

A National Crime Agency investigation has resulted in a nine-year sentence and £3.5 million confiscation order for the leader of the UK’s largest money-laundering scheme.

Alfalasi, with the help of a network of couriers, had smuggled more than £100 million from the UK to Dubai between April 2019 and December 2020.

The couriers had moved the cash in suitcases, each carrying thousands of pounds, over 83 trips.

Nearly two years after his criminal conviction, Alfalasi has now been hit with a confiscation order of almost £3.5 million, in the wake of a National Crime Agency investigation.

He must pay the money within three months or serve an extra 10 years in jail.

We spoke with Tim Pinkney, IFA Director of Professional Standards, about the case and the lessons it carries for accountants.

The National Crime Agency’s investigation

Following Alfalasi’s conviction, the National Crime Agency launched an investigation into his finances.

The Agency uncovered a slew of money and assets, including Emirati bank accounts containing savings and investments, shares in properties in the UAE, and cryptocurrency. Also in Alfalasi’s name were multiple vehicles and luxury items, including a Mercedes G63, a Ford pickup truck, a Toyota Yaris, three Rolex watches and a Patek Philippe watch.

“We have worked hard to obtain a confiscation order, which covers all of Alfalasi’s current available assets, to ensure that he does not financially benefit from this crime,” said Adrian Foster, CPS Chief Crown Prosecutor.

“Should we subsequently discover any new assets belonging to him, then we will take him back to court until he has repaid his full criminal benefit.”

Since 2018, confiscation orders have recovered more than £480 million, of which £105 million has been paid in compensation to victims of crime.

A powerful deterrent in the fight against economic crime

“This case shows how well the Proceeds of Crime Act and confiscation legislation work together,” says Pinkney.

“The connection is a powerful deterrent in the fight against economic crime. In the past, a criminal might have thought, ‘If I get caught, I’ll take a hit and go to prison, but come out and have this nice nest egg’.

“But now, if someone is convicted of an offence, it doesn’t end there. The National Crime Agency can go back a long way and, if it uncovers further assets, confiscate them.”

Find out more about money laundering and anti-money laundering regulations from Tim Pinkney and Bill Bewes in the video below. The article continues below the video.

How accountants can help prevent money laundering

For accountants, the first step is being alert to red flags. These might include:

• Large amounts of unexplained income going in or out of bank accounts
• Activity in cash-based businesses that doesn’t stack up to industry benchmarks
• Transactions made via unusual payment methods or in highly complex circumstances
• Reluctance on a client’s part to share information

“Accountants should maintain a level of professional scepticism at all times,” says Pinkney.

“It’s important to run a critical eye over everything – and not accept anything at face value.”

Key to having a critical eye is developing an understanding of what is normal, so that the abnormal jumps out.

“For example, if a firm deals with a cash-based business, then they should be aware of the relevant benchmarks and risks, and apply them as part of ongoing monitoring and risk assessment,” says Pinkney.

If suspicion arises, then the next step is to revise due diligence accordingly.

“You should apply appropriate measures to mitigate any risks, such as additional verification, additional monitoring and requiring more information more regularly,” says Pinkney.

Should there be real grounds for suspicion, it is important to submit a suspicious activity report.

“As an accountant, you’re not a police officer or investigator, but you can provide intelligence that law enforcement can use,” says Pinkney.

The potential consequences of engaging a criminal client

“If a client is charged with, or found guilty of, an offence, then you need to decide what to do,” says Pinkney.

“There could be a real risk to you and to the firm’s reputation.”

In the worst case scenario, you could be unwittingly implicated.

“For example, last year, a firm contacted me to say they’d read in the press that a client had been convicted of a drug trafficking offence, and wondering if some of the fees they’d been paid had been a result of that offence. They did the right thing and disengaged the client.”

The Institute of Financial Accountants’ upcoming AML Conference online offers valuable insights from experts about AML regulatory updates and how best practice can protect your business. Find out more and register.