Security & Fraud

London’s Dirty Little (Money Laundering) Secret

Swiss Banks Laundering Money In London

Insider warnings have led to speculation that London may be transforming into a global hub for illicit finance.

At least that’s what a recent investigation by The Financial Times is looking to uncover after an insider at a Swiss bank reportedly disclosed to financial watchdogs in Britain that bankers in a U.K. office were facilitating tax evasion and money laundering.

A former employee at Swiss bank BSI, who worked at the bank’s U.K. office in London, revealed that back in 2008 secretive techniques and services were being offered to clients that would allow them to conceal assets. According to FT, no public or private action was taken against the bank by regulators after the information was disclosed.

“Rest assured,” wrote one investigator to the former BSI employee after, “we are taking your information seriously and will use this as the basis for further investigation.” But as the FT’s reports showed, U.K. regulators didn’t seem inclined to take any real steps toward looking into the claims about BSI’s role in tax evasion at the time.

Despite the fact that the insider provided regulators with BSI documents and sent emails with additional information, the warnings seemed to fall on deaf ears.

“We do not comment on our interactions with the authorities,” BSI told the FT when asked about regulators contacting the bank in response to the insider’s disclosure. “But we can confirm that BSI is strongly committed in [anti-money laundering] controls and cooperates with the authorities if and when requested.”

Earlier this year another Swiss bank found itself in hot water due to possible involvement in fraud, money laundering and other criminal activities related to helping wealthy individuals avoid taxes.

A Belgian magistrate judge is continuing an investigation into UBS after the bank was accused of reaching out directly to Belgian clients on the premise of encouraging them to participate in transactions meant to evade taxes.

UBS faced a similar investigation in France in 2014, when the bank was ordered to post a bail of more than $1 billion after being accused of helping French clients cover funds from the national tax administration from 2004 to 2012, using money laundering and tax fraud tactics.

According to The New York Times, the Belgian authorities said they received “excellent cooperation” from authorities in France in making their case against the big bank.

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