Fraudbuster warns solicitors of dirty Chinese clients money

Solicitors acting for Chinese individuals in asset purchases should be aware that their clients are almost certainly breaching domestic law – probably by laundering the proceeds of crime in the UK, practitioners heard today.

Simon Lord of the National Crime Agency told the Law Society’s anti-money laundering and financial crime conference that Chinese underground banking is ‘the most prevalent money laundering threat faced across the Western world’.

The business, worth ‘hundreds of millions, possibly billions’ involves cash from criminal gangs in the UK being made available to wealthy Chinese individuals who are unable to transfer money out of the country. The payback, typically via accounts opened by Chinese students, is in the form of high-value goods bought in the UK.

Chinese law strictly controls the purposes for which citizens can obtain foreign currency and limits any individual to $50,000 in a year. ‘If you want to buy property in the UK that’s clearly not enough,’ Lord said. Meanwhile, organised criminals need a way of transferring their proceeds in the face of new restrictions on cash deposits.

Lord described recent cases in which individuals had been caught receiving hundreds of thousands of pounds from criminal gangs to be distributed among students offered a way of earning extra cash. In one case, Santander Bank alerted the authorities to suspicious cash deposits adding up to £57m to more than 600 accounts set up by students. Barclays meanwhile has found more than 14,000 ‘compromised’ accounts, he said.

While individuals may not know they are handling the proceeds of crime, ‘You have to ask yourself about the extent to which they are at the very least suspicious,’ he said.  ‘I am not advising anyone to end their relationship with Chinese clients, not saying they are criminals, but you have to be aware of the illicit methods used to get money out of China.’

Kindly shared by The Law Society Gazette