Tag money laundering

Offshore in central London: the curious case of 29 Harley Street

On a central London street renowned for high-class healthcare sits a property that houses 2,159 companies. Why has this prestigious address been used so many times as a centre for elaborate international fraud?


No 29 Harley Street does not look like a centre of intricate intercontinental fraud. It is a handsome stone-fronted terraced house, a couple of minutes’ walk from the shops and the tourists of Oxford Street. It is five storeys high, with a bay window on the ground floor, an intricate steel balcony at first-floor level, and a stone balustrade just under the roof. Its front door is dark wood, with brass fittings.

As soon as companies were involved in owning other companies, as well as being their directors and secretaries, it became extremely difficult to discover who really controlled them (ie who was the “beneficial owner”, the person who received any benefit from the company). In February 2004, for example, Formations House created three companies: Corporate Nominees, Legal Nominees, and Professional Nominees. The second company owns the other two, while itself being owned by the first company. The third company is secretary for the other two, while its own secretary is the first company. The second company is director of the other two, while its own director is the first company. These three companies then became directors, secretaries and shareholders of other structures, in an increasingly baffling multidimensional web of crisscrossing lines of control. If you looked for the companies’ real owners, the most you could eventually discover was that the original three all owned, controlled and managed each other.

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Panama Papers: Berenberg-Mitarbeiter warnten vor Offshore-Geschäften

Hans-Walter Peters von der Privatbank Berenberg ist neuer Präsident beim Bundesverband deutscher Banken. Mit ihm sollte endlich wieder Ruhe in die von Skandalen gebeutelte Branche einkehren. Doch nun steht die Berenberg Bank im Fokus der Panama Papers. Waren Offshore-Geschäfte bei der Berenberg-Bank Alltag? Nein, sagt Bankchef Hans-Walter Peters. Doch Ex-Mitarbeiter warnten schon 2013 vor solchen Deals – und wurden entlassen.


Taler, Taler, du musst wandern

Von Ingo Malcher, von brandeins wirtschaftsmagazin


Geldwäsche ist ein internationales Gewerbe – und es ist nicht immer leicht zu unterscheiden: Was ist ein legales Geschäft und was nicht? Denn die Beteiligten machen sich dabei zunutze, was auch der legalen Wirtschaft dient: die Globalisierung.



The money laundering industry atlas

Now available: an atlas database that provides detailed insights on a multitude of money laundering service providers: exposing perpetrators, trusts, offshore companies, suspected addresses, hidden structures, fake directors and networks all over the world

The Scalaris ECI AG Money Laudering Industry Atlas

Even as the world economy has stumbled, economic crime has continued to grow, booming to 10% of the global economy and fast becoming a major threat to world security. A well organized, innovative system of money laundering has allowed the industry to boom. The launderers‘ most important tool is no longer bank secrecy, but rather a complex mechanism of camouflage and deception which combines criminal activities, offshore structures and the real economy. The proponents of offshore structures claim that the vast majority of offshore patrons are engaged in legitimate transactions. Offshore centres, they say, allow companies and individuals to diversify their investments, forge commercial alliances across national borders and do business in entrepreneur-friendly zones.

In reality there is a delicate balance between lawful offshore systems, certain grey areas and illegal structures. New international regulations and anti-money-laundering guidelines make it more difficult for banks to effect daily business transactions. On the other hand, there are full service money-laundering providers located outside the official financial system who have promoted the setup of countless offshore companies, trusts and hard-to-trace bank accounts, hiding their clients’ true identities, intents and backgrounds. One major attraction of offshore havens for their users is that it remains extremely difficult to identify those behind such companies. Who are the owners of these offshore entities, on whose behalf are the “sham-directors” acting? It is increasingly challenging for all parties involved to distinguish the fine line between legal and illegal offshore transactions: this hidden apparatus has been refined in the last 10 years, becoming the central instrument for the money laundering industry, allowing launderers to sidestep existing regulations and controls and creating insurmountable investigation costs for governments and banks seeking to prevent economic crime.

As a result of years of continuous investigation by a team of highly-competent experts, SCALARIS ECI AG has developed a database that provides detailed insights on a multitude of money laundering service providers: exposing perpetrators, trusts, offshore companies, suspected addresses, hidden structures, fake directors and networks all over the world. The database is a map of the money laundering industry that illustrates how offshore financial secrecy has spread continuously around the globe. This map is constantly updated to keep abreast of innovations and developments in the money laundering industry. With this unique database, Scalaris ECI AG assists clients in detecting money laundering mechanisms, corruption schemes and commercial frauds, and in protecting businesses against the reputational and regulatory risks that involvement in economic crime, unwitting or otherwise, can trigger.

The US war against Virtual Currencies

The U.S. Government seizes and shut down Costa Rica based Virtual Currency Liberty Reserve as part of a larger effort by the U.S. government to put pressure on virtual currencies to maintain their control on the international money transaction mechanisms. This is a step in combating money laundering, however it seems that the classical money laundering schema of anonymous shell companies in Dalaware and C.o are not in the focus of the war.

U.S. federal law enforcement agencies on Tuesday announced the closure and seizure of Liberty Reserve, an online, virtual currency that the U.S. government alleges acted as a financial hub of the cyber-crime world and a new trend for the money laundering industry. It processed several billion USD in criminal proceeds over the past seven years showing an alternative to the classical money laundering techniques based of shell companies and deception of swifts bank transfers. With the use of virtual money the bank regulation can be evaded and the criminals can launder illegal money. The registered users can perpetrate different transactions evading the SWIFT control for the money “issued” by the company. Some companies accept this virtual money for means of payment too, i.e. changes into official currency, thus it becomes available everywhere in the world and can be transferred to everywhere.

The news comes four days after libertyreserve.com inexplicably went offline and newspapers in Costa Rica began reporting the arrest in Spain of the company’s founder Arthur Budovsky, 39-year-old Ukrainian native who moved to Costa Rica to start the business.

Despite the US government’s claims, certainly not everyone using Liberty Reserve was involved in shady or criminal activity. As noted by the BBC, many users — principally those outside the United States — simply viewed the currency as cheaper, more secure and private alternative to PayPal. The company charged a one percent fee for each transaction, plus a 75 cent “privacy fee” according to court documents.

“It had allowed users to open accounts and transfer money, only requiring them to provide a name, date of birth and an email address,” BBC wrote. “Cash could be put into the service using a credit card, bank wire, postal money order or other money transfer service. It was then “converted” into one of the firm’s own currencies – mirroring either the Euro or US dollar – at which point it could be transferred to another account holder who could then extract the funds.”

“The ‘merchants’ who accepted LR currency were overwhelmingly criminal in nature,” the government’s indictment alleges. “They included, for example, traffickers of stolen credit card data and personal identity information; peddlers of various types of online Ponzi and get-rich-quick schemes; computer hackers for hire; unregulated gambling enterprises; and underground drug-dealing websites.”

It seems clear, however, that the action against Liberty Reserve is part of a larger effort by the U.S. government to put pressure on virtual currencies.

Several of Liberty Reserve’s competitors have apparently seen the writing on the wall and moved to distance themselves from U.S. customers. On Saturday, digital currency Perfect Money posted a note to its site saying it would no longer accept new registrations from individuals or companies based in the United States. WebMoney, a digital currency founded in Moscow and probably the closest competitor to Liberty Reserve in terms of users and daily transfer volumes, started blocking new account signups from users in the United States at least two months ago.
It’s also not clear how the government’s actions will impact Bitcoin, a peer-to-peer digital currency that is gaining worldwide currency and momentum. While Bitcoin’s distributed nature in theory lacks the geographic central point of failure that allowed the US government to take action against Liberty Reserve, currency holders rely on bitcoin exchanges to convert bitcoins into other currencies; those entities must register with the U.S. Treasury Department as money service businesses, and could become a focus point for banking regulators going forward.
For money launders of the cyber generation there is no fear that the shadow virtual money banking systems will disappear. There are many other virtual currencies available: MoneyMail, LiqPay, UkrMoney, moneta.ru, Z-Payment, NN-Money, AlertPay, DeltaKey, AlterGold, Pecunix, V-Money, Webcreds, W1 RUR, Edram, E-Gold, C-Gold, iMoney, E-bullion, InoCard, Chebo Money, ECUmoney, Express Gold, ICQMoney, IntellectMoney, VRS, Wirex, Dengi 2.0, Younicrata. You can transfer virtual currencies to any Exchanger having a business relation with the issuer of the virtual currency. Some of the Exchangers can pay out in cash or make transactions into a correspondence bank or through Western Union without limits.