For their alleged roles in a massive stock fraud and money laundering scam involving a Picasso, the U.S. Department of Justice has criminally charged 10 defendants. Prosecutors named U.K.-based Beaufort Securities Ltd and two of its managers, among others, in the case, according to news from Reuters.
Prosecutors said Beaufort and managers Peter Kyriacou and Vinesh Canaye manipulated the prices of U.S. stocks through “pump-and-dump schemes,” while hiding their ownership in the companies. In addition, prosecutors said eight defendants, including offshore bank Loyal Bank Ltd, planned to launder proceeds from the fraud.
In one instance, Kyriacou and Matthew Green — an art gallery owner in London — allegedly attempted to launder 6.7 million British pounds, which an undercover agent had said were proceeds from the fraud. Kyriacou had reportedly sent the agent a message with an invoice for a Picasso painting. He also allegedly sent along a message from Green emphasizing the need “to preserve a certain amount of anonymity.”
In the U.K., luxury goods — such as sports cars, art, boats, antiques and jewels — are used by criminals to hide the profits of their criminal activity.
Money laundering rules are not terribly well-understood among the purveyors of luxury items nor are the signs that someone is buying a high-cost good to hide criminal profits, such as paying in cash, not retaining a lawyer and wanting to get the transaction done as quickly as possible.
In 2016, insider warnings led to speculation that London may be transforming into a global hub for illicit finance. At least that what 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.