UK drug barons ditch banks for money service businesses
17 Feb 2020

Drug barons have moved from laundering cash through banks to using smaller money service businesses, Scotland Yard’s head of specialist crime has said.

DCS Michael Gallagher told the Guardian the network of 34,000 money service businesses (MSBs) was suspected of being the main way for those involved in serious and organised crime to move money around. MSBs can include bureaux de change, money-transfer brokers and payday-loan services.

Gallagher said British law enforcement planned fresh crackdowns this year and hoped that by choking off the cash profits from the drugs trade they could help reduce the violence on the streets that went with it, adding: “I’m convinced there is a link between money, drugs and violence. And my command’s response in the criminal finance area is to help address street violence, through disrupting that business model.

“If you can disrupt the financial element of it, you may well disrupt the violence.”

The police chief said MSBs had become the method of choice for drugs networks to get cash made from selling on Britain’s streets out of the country and back to those in the supply chain.

Gallagher said: “Cash is still king. There are still large amounts of cash going through MSBs from criminal enterprises.”

He went on: “Banks have been subjected to tougher and tougher regulations to stop major criminals using them. So serious and organised criminals have transformed their business methods to beat the clampdown and now at least hundreds of millions of pounds is flowing through MSBs, which are less strictly regulated than banks.”

He said banks had become more of a “hostile environment” but added: “It’s very difficult to regulate MSBs because there are so many of them.”

He said regulation of MSBs was light and some were run by criminals. Many of them “look like a front, and they are, they can be set up purely by organised crime groups in order to get cash out of the UK quickly without it being effectively monitored.

“Some are there for a legitimate purpose, some are not, our job this year is to get into that space and to disrupt the criminal use of finance via MSBs.”

MSBs exist in theory to help people working in the UK send money to families overseas.

By Vikram Dodd, The Guardian, 13 February 2020

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