Martin Woods has been fighting money launderers and financial criminals for over 30 years, as both a police detective and an anti-money-laundering expert within a diverse range of financial service businesses in the UK and overseas.

He has played an active role in a number of major international money laundering investigations, including the infamous Wachovia Bank case. He identified widescale money laundering being undertaken on behalf of Mexican drug dealing cartels and Russian crime groups. He blew the whistle against his employer because managers disagreed with his findings, leading to a falling out with the bank. Subsequently, Wachovia Bank agreed to pay $160m to settle US charges that it failed to stop more than $100m of Colombian and Mexican drug traffickers’ money being laundered through accounts at the bank.

In the first part of his interview for GRIP, he shares his experience of chasing bad guys as a young police cadet, as an experienced detective and as a deputy Money Laundering Reporting Officer (MLRO) for ABN AMRO Private Bank.

I have been chasing bad guys for a long time.

I am going be 60 years old in November, I have been chasing bad guys for a long time. Notwithstanding my age I actually think I catch more nowadays. How so, you may ask? And the simple answer is, retail banking.

I am currently between jobs and this has presented me with the opportunity to take part in this question and answer session. I have chased bad guys since the age of 17. As a police cadet I was fast and I recollect helping the police in Cheshire to catch a young rogue who was trying to outrun chasing officers. I caught him. I have no idea what he had been up to.  

I have always possessed a profound sense of right and wrong, I obey rules and expect others to do likewise. There is a saying, ‘rules are for fools.’ Sign me up, and feel free to call me a fool. Absent to rules there is chaos, no order and anarchy.

Not an idiot

There was a time at one bank in London when I had blocked a high-value transaction. I suspected money laundering and sought consent from what was then SOCA (serious organized crime agency). In the meantime, a frustrated Dutch customer wrote to the bank and, amongst other words, he said: “Doubtless, some idiot in London thinks this is money laundering.” I was the said idiot and I did suspect it was money laundering.

The frustrated customer took the bank and yours truly to the High Court. I do like a day out in court. Whilst being questioned in the witness box, the judge interrupted and asked me directly: “Mr Woods, do you suspect this is part of a carousel fraud [HMRC VAT Fraud]?” I answered, “Yes, your Lordship.” To which he replied: “So do I. I prosecuted a similar case last week.”

Counsel for the customer had demanded the Judge instruct the bank and I to release the funds. The Judge told counsel he could not do so and no court could instruct the bank or Mr Woods to do something which may be a criminal act, namely laundering money.  

Days spent in court

I think I was the first MLRO (money laundering reporting officer) taken to court because of a consent SAR (suspicious activity report). You do learn a lot from these court cases. You are able to witness some very intelligent people debate the law and with substantial clarity conclude what a specific act or section seeks to achieve. 

For a time I was the expert witness in the case of Shah vs HSBC. I sat in Court for almost four weeks and witnessed two incredible barristers unpack the Proceeds of Crime Act and then put it back together. I learned what words to never put in a SAR and I learned there are ultimately many people who may one day read your SAR, including the customer.

Cadet to detective

I journeyed to London in 1982, at the age of 17, to join the police cadets and I have never looked back. It was while I was a detective on the drug squad that I began to take an enthusiastic interest in the money. After all drug trafficking is all about the money. In 1996 I meandered my way onto the Money Laundering Investigation Team (MLIT) of the, then Regional Crime Squad, which later became the National Crime Squad and is now called the National Crime Agency. I travelled the world following money, collecting evidence and eventually catching the bad guys.   

My primary investigation morphed from the pursuit of two men laundering money for Colombian cartels to bankers, accountants lawyers, barristers, a magistrate and a chauffeur laundering the proceeds of international investment frauds.  

For context, think of the film Boiler Room and multiply it by ten. This was pre the internet, pre challenger banks, pre crypto and notwithstanding the sophistication of the professional launderers, there was a lot of cash, which is where the chauffeur entered into the criminal enterprise. I learned about the devastation and harm caused by fraud and those who launder the proceeds for the fraudsters. Fortunately, it was arrogance and stupidity which enabled prosecutors in New York and London to convict all of the above actors.  

Police officer to bank officer

By 2001 I had completed five years with MLIT and it was time to move on. I was presented with three options, return to the Metropolitan Police, take advantage of a job offer with Tesco, or an opportunity to work as a deputy MLRO with a bank. I chose the bank.

When I go to a new bank or firm, I ask myself the question, how do I launder money here? And I set about my work to find out.  

I have been asked why the transition from police officer to bank officer? It was easy and at the same time, difficult. I loved being a police officer, I was lucky enough to work with some truly extraordinary people, some of whom genuinely inspired me, but I was married, I had three young children and the bank was offering me a 65% pay rise. This was the number which swiftly brought my exit interview to a close.  

To the good, bad and ‘thugly’

Initially, I missed my old police job 300 times everyday. I recollect an instance when I confronted the head of a private bank in London and essentially told him he could not do something. He was irritated and he scornfully said to me: “You’re not a police officer now.” He was clearly intuitive. I wanted to tell him my prior role was not hidden on my CV, but I held back.

He was an arrogant man who had high opinions of his clients (retail banks have customers, private banks have clients) and a low opinion of his colleagues. On this occasion he turned the conversation around and said to me: “You think I’m stupid, don’t you.” I did and he was.  

He was a bully and he had instructed six colleagues from operations to move his client’s gold from a vault in the City to a bullion dealer – readers will know why this is morally questionable. He had this plan, cunning it was not. In seeking to impress upon me his intelligence, he described how the operations colleagues would go to the vault in three groups of two. All three would leave together, each carrying identical hold-all bags. In their groups they would take separate taxis to the bullion dealer. He smirked at me and said: “No one would know which of the three groups would be carrying the gold.”

Genius. I told him the group carrying the gold would be the group with the heavy bag. I added, regardless, would-be violent robbers could follow any of the groups and would be highly likely to attack our colleagues for the gold, or for the hell of it upon realization of this not-so-cunning deception. He shrugged his shoulders, as I added: “Last time I looked, our colleagues are more valuable than your client’s gold.”

I don’t recollect if he said: “Says who?” But he did say: “You can’t stop me.” He was right, we both knew that. The meeting was over. But as I left his office I said to him: “I know a man who can.”

Needless to say, my operations colleagues remained at their desk and the head of the private bank was instructed to use a security company and bill his client to move the gold. This episode pitted me in a constant battle with the private bankers who appeared to work primarily for their clients rather than the bank, not the other way around. Eventually, the head of ABN AMRO in London told the private bank to get their own banking license. He wanted nothing more to do with them and their clients, good, bad and thugly.   

Launderer, fraudster, detective and bank customer

Those who know me well will know I have never stopped being a policeman. Indeed in 2010 a lawyer appeared before a Parliamentary Select Committee and alleged a number of former police officers had paid bribes to and corrupted some serving police officers. Whereas I was alleged to be a deep undercover police officer who had infiltrated a law firm to undermine a client’s defence. I had worked for the law firm and the client whom I advised, “You’re in trouble.”  He was subsequently sentenced to 10 years in prison for laundering a lot of money.  

I simultaneously think like a launderer, fraudster, detective and bank customer. When I go to a new bank or firm, I ask myself the question, how do I launder money here? And I set about my work to find out.  

In Part 2 of this interview tomorrow, Martin Woods, in his own indomitable style, provides some insight as to what happened at Wachovia Bank and how he discovered the money laundering.