A ‘cottage industry’ of company formation agencies is helping criminals launder billions of pounds in the UK, with £4.5billion of unreported income identified between 2012 and 2017, a report has revealed.
The International Consortium of Investigate Journalists (ICIJ) has carried out more analysis of data from the FinCEN Files, a leaked cache of Suspicious Activity Reports which hit the headlines last September.
The ICIJ matched identifiers such as company addresses from the SARs to company names and then analysed accounts filed to Companies House. It found a system of companies registered as Limited Partnerships and Limited Liability Partnerships by clusters of specific formation agencies. It identified £4.5bn of unreported income and expenditure between 2012 and 2017.
It said: “An entire cottage industry had been established around the administration of these LLPs and LPs that was, ultimately, enabling criminals to wash dirty money clean through the U.K. financial system.”
The latest ICIJ report comes several weeks after Graeme Biggar, director general of the National Economic Crime Centre at the National Crime Agency, warned parliament of the money laundering risks posed by company formation agencies.
He said that company formation through Trust & Company Service Providers is an area where “we need to focus more supervisory effort and criminal investigation effort.”
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