UK charities laundered £10m from sale of counterfeit medication

The Charity Commission is considering its options around the recovery of charity funds as it reports on its inquiry into Chabad UK and seven linked charities, it said in a statement.

So far, two trustees have been removed and disqualified from their positions, and the manager of the charities automatically disqualified, after he was convicted of laundering money through the charities from the sale of counterfeit medication, and supplying false information to the commission.

The regulator worked closely with the Metropolitan Police throughout its investigation into the charities that were registered to advance the Orthodox Jewish faith and relieve poverty.

According to the commission, information supplied by the inquiry allowed the manager to be convicted of an offence under section 60 of the Charities Act for providing false or misleading information to the commission.

The inquiry found that over £9 million passed through the charities’ bank accounts between January 2012 and May 2014, however most of the charities’ annual returns to the commission declared nil income or expenditure.

It also found that over £60,000 was paid out of the charities’ bank accounts to a trustee between 2007 and 2015, and that the trustees failed to meet their statutory reporting requirements.

“This case involved an unscrupulous pattern of dishonesty that has no place in charity. Charity represents the best of human characteristics – that’s why the behaviour of those involved in charities matter,” said Amy Spiller, head of investigations team at the Charity Commission said.

“These charities were clearly misused for personal gain, and I am pleased that we have been able to work closely with the police to ensure that those responsible have been brought to justice.”

A number of the charities’ bank accounts are currently restrained by a court order under the Proceeds of Crime Act.

The commission confirmed that it is considering its options in relation to the recovery of funds and will ensure that, where possible, any charitable donations recovered are applied in accordance with the charitable objects to which they were initially given.