At a time when many of my fellow professionals are bemoaning the growing problem of fraud, the recent KPMG mid-year Fraud Barometer indicates that UK money laundering cases being put before the courts are on the increase. This is, perversely, good news.
Charging money laundering as an adjoining indictment
Why? Because (hopefully) it is an indication that the UK is at last trying to get to grips with its huge fraud problem and charging money laundering as an adjoining indictment. For too long, fraud has been undercharged by virtue of it not being investigated. Not only that, but money laundering rarely hits the indictment sheet for many reasons, not least of which is that it is simply not understood by the police. This issue is compounded by a CPS (Crown Prosecution Service) which appears to have an aversion to laying the charge before the courts.
The exception to the rule appears to be the sort of cases picked up by the KPMG research, where money laundering is being charged alongside high-value frauds. Indeed, the report (which captures fraud cases valued at £100k ($133k) or more brought before the Crown Court) indicates that “the overall value of fraud cases involving money laundering heard at crown courts has risen nearly fourfold in the first half of 2024.”
The UK is at last trying to get to grips with its huge fraud problem and charging money laundering as an adjoining indictment.
Those of us who specialize in the investigation of fraud and money laundering will be all too aware of why law enforcement shies away from investigating what is now one of the most prevalent offences globally. The issue is time and resources.
As Roy Waligora, head of KPMG’s UK investigations stated in the Fraud Barometer report, “…it can take years to bring a complex money laundering case to conclusion.” If we add the fact that most high-value cases of this type will inevitably involve moving assets across jurisdictions, the complexity of the evidential jigsaw is obvious.
In essence, it is unlikely that very few cases passing across a police investigator’s desk will be as costly in terms of time and resources to prosecute.
Money laundering should be charged in smaller fraud cases too
It is hard to imagine prosecuting a £100k ($133k) fraud without needing to add a money laundering charge, so we should not get too excited by the reported upturn in these prosecutions. Given that there is a school of thought that for every acquisitive crime there is a subsequent money laundering element attached, why isn’t money laundering charged more often in smaller-value cases?
I believe there is a lack of training where the police are concerned: a fact I am only too aware of as a former detective specializing in fraud and financial investigation. This lack of awareness is not the fault of officers: it is simply down to the fact that police forces do not provide them with the appropriate guidance and thereby deny them the tools to do the job. The problem is exacerbated by CPS prosecutors who appear to overlook money laundering charges (so as not to overload an indictment) and in turn encourage guilty pleas that do not include them.
The wording of the Proceeds of Crime Act 2002 (POCA) couldn’t make the charging considerations simpler. Of all the UK legislation dealing with acquisitive crime, I believe that POCA lends itself to making charging decisions comparatively uncomplicated and straightforward.
I am not advocating for money laundering to be attached to every bar of chocolate stolen by a spotty youth from the school shop; merely suggesting that it should be considered and charged more often in more serious cases involving acquisitive crime. The fact that it is not, I believe, should be an ongoing cause for concern.
Tony McClements is head of Investigations at Martin Kenney & Co (MKS), an international asset recovery litigation practice based in the British Virgin Islands.
