MLR3C10080 - Business sector specific Guidance: Money Service Businesses: How Currency Exchange Offices can be used to launder money.

Criminals make use of Currency Exchange Offices to launder criminally obtained money. In this country it can involve the conversion of sterling into higher denomination notes. Until recently the criminal preferred note was the €500 . Since 20 April 2010 when the note was withdrawn from issue in the UK the €200 note has become the criminal’s preferred currency. Converting cash into high denomination notes greatly reduces the bulk and facilitates the movement of funds around the UK and out of the country.

An example of this involved a customer who was a regular user of a Currency Exchange Office who provided suitable ID but gave his address as a temporary accommodation address. He purported to be a property salesman in Spain and a supplier of furnishings. He claimed that the sterling that he converted into Euros was money given by his clients to buy furniture abroad. The customer befriended the staff at the Currency Exchange Office and they failed to carry out on-going monitoring of the business relationship. As the staff came increasingly under his influence his level of transactions increased and he regularly exchanged between £25,000 and £50,000. In total he exchanged £3.7 million in 180 transactions over a three year period. He was arrested at a ferry terminal with €63,000 concealed about his person. The Currency Exchange Office had full details of the transactions but had been so cultivated by him that they did not regard the transactions as suspicious and did not put in any Suspicious Activity Reports.

A second example involved a criminal gang that used a Currency Exchange Office operating from a kiosk within a shop to convert up to £200,000 at a time into €500 notes. These transactions were not recorded in the businesses records which, which were kept in a haphazard state and which only showed modest daily transactions carried out for tourists.