Dozens of bank accounts of mainly Chinese students containing an estimated £3.6m have been frozen in a swoop co-ordinated by the newly formed National Economic Crime Centre (NECC). The money in these accounts, held by Barclays, is suspected to be either the proceeds of crime or intended to be used for criminal purposes, including money laundering.
Far more than that amount passed through the accounts, the NECC said. In some cases, money was ‘cleaned’ by being used to buy luxury goods that were then sent back to China. In one case, the police are seeking the freezing of an account that now contains £25,000, although almost £150,000 passed through it in a 14-month period up to the end of 2018, City of London magistrates’ court was told. That included nine cash payments into the account in a single day, via automated paying-in services at cash machines in and around London.
In another case, £44,500 in cash was deposited into an account between May and July 2018, even though the student account holder had told the bank she was expecting £12,000 a year from her parents to support her during her studies. Only £7,570 now remained in the account, the court heard. In a third example, more than £200,000 was paid into a current account in 2018 and then transferred to a savings account, even though the individual’s declared annual income was approximately £18,600. Of that total, about £65,600 remained in the two accounts, the court heard.
The account holders, the vast majority of whom are Chinese nationals studying in the UK, cannot be identified for legal reasons. None of them has been accused of any crime, and the UK authorities believe that in many cases the students involved “may not have full knowledge of the scale and seriousness” of the alleged criminal activity, according to the National Crime Agency (NCA). Lawyers for some of the account holders indicated they would co-operate fully with investigators and would seek to show that the sources of the funds were legitimate.
In many instances, the payments were made at various locations in and around one town or city, often several times in one day, even though the student concerned was studying in another part of the country up to hundreds of miles away. Most of the payments were kept small enough to avoid triggering the bank’s antimoney laundering alerts — a tactic known as ‘smurfing’. Barclays, which the NCA said had co-operated fully with the investigation from the outset, declined to comment further. The identity of the people behind the suspected money laundering is not clear, and nor are the sources of the suspicious funds.
However, particular attention is focusing on the use of informal money transfer networks by organised crime groups, potentially in a number of countries, to get money out of the country of origin and into bank accounts in Britain. The suspected money laundering was revealed after the NCA, HMRC, the City of London Police and other forces around the country applied to the courts for the account freezing orders. These powers were introduced a year ago, along with unexplained wealth orders, by the Criminal Finances Act. They allow the authorities to freeze bank or building society accounts until the source of the funds can be definitively established.