Money Laundering Ring Smashed

A UK team lead of lawyers and insolvency practitioners has reclaimed millions of pounds of money laundered as part of a carousel fraud scheme.

The fraud involved mobile phones being shipped in order to fraudulently claim up to an estimated £600 billion, laundered through a Caribbean bank.

Carousel Fraud, occurs when a fraudster takes advantage of VAT rules in the EU.
Because cross border trade is not subject to VAT, exporters can reclaim the VAT charges from the government, however in carousel fraud trades are usually virtual or the last company in the chain selling the goods disappears, meaning the exchequer is left out of pocket. In this case, the same mobile phones were sent back and forth across borders, with tax fraudulently reclaimed each time.

As well as defrauding the tax system this fraud case, also allowed anonymous money laundering; and could have been used to launder the proceeds of crime.

It is believed that this is one of the biggest ‘carousel fraud’ money laundering to be broken and a total of £51 million has been recovered from First Curacao International Bank, which was itself forced to close in 2006 as a result of an Anglo-Dutch criminal investigation.

You can find more information on money laundering solutions here.