2022 was, by no means, a quiet year for financial crime. From devastating cases of fraud, to some hefty fines for AML failings; 2022 saw some of the most shocking reports of financial crime and money laundering.
In October 2022, the European Agency for Criminal Justice reported a doubling in cases of money laundering in the last 6 years in the EU region alone, estimating that almost €2 trillion is laundered each year. And that is just the cases that are successfully reported and brought to justice. The clandestine nature of money laundering and financial crime could, in effect, make this figure a mere drop in a much larger, more troublesome ocean.
We take a look at some of the biggest financial crime events of 2022; from fines and regulatory non-compliance, to the most shocking scandals of the last 12 months.
Santander fined £108m for AML failures
The FCA slapped one of the UK’s high-street banks with an eye-watering fine for AML failures in its business banking division.
As the country was winding down for the Christmas break, Santander executives were feeling the wrath of the FCA. Citing significant failings in the period from 2012 to 2017, the Spanish bank was condemned for its: “poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime.”
With Santander not disputing the regulator’s findings and agreeing to settle, the £154m fine was reduced by 30%, bringing it to £107.8m.
Logistics firm operators jailed for 36+ years in £30m money laundering plot
Six men were jailed in January 2023 following a two-year investigation by the West Midlands Regional Organised Crime Unit for their roles in a £30m money laundering operation.
Genesis 2014 UK, a road haulage business, was the seemingly perfect guise for a large-scale money laundering operation that saw the firm’s management conspire to collect and transport significant sums of ill-gotten cash from across the UK into London where the funds would be transferred and legitimised. A prime example of stages two and three of money laundering: layering and integration.
Reflecting on the case, the Crown Prosecution Service said: “The defendants were an essential distribution part of the criminal network, transferring the cash proceeds of criminal activity for the wider benefit of organised criminals, as well as their own gain.”
Gambling brand penalised for CSR and money laundering failings
888 is an gambling business known for its online betting brands including William Hill, 888casino, 888sport, 888poker and Mr Green.
Following an investigation by the Gambling Commission, 888 were ordered to pay a record-breaking fine of £9.4m for failings in money laundering due diligence and social responsibility. The ruling came just 5 years after 888 was fined £7.8m for its poor handling of their most vulnerable customers.
Customers were allowed to gamble with large amounts of money without sufficient due diligence and Source of Funds checks, the company failed to identify players at risk of harm and failed to implement formal guidance on customer interaction from the Gambling Commission.
Just some of 888’s failures included not identifying players at risk of harm because their policies determined financial checks should be carried out after a customer had deposited £40,000, not carrying out a customer interaction with a customer who lost £37,000 in a six week period during the Covid-19 pandemic, not carrying out source of funds checks until a customer had deposited £40,000 and accepting verbal assurances from customers of their employment income without requesting documentation.
Contrary to their source of funds policy, one customer was allowed to spend a staggering £65,835 in just 5 months without source of funds checks being carried out.
UK estate agents take £500,000 hit for AML non-compliance
68 estate agents were publicly named by HMRC for their non-compliance with AML regulations in 2022. Fines totalling over half a million pounds were dished out last year, along with bans prohibiting convicted individuals from acting as estate agents and community service sentences.
With penalties being issued for failures in having the correct controls and procedures, internal controls, conducting due diligence and failing to apply for registration at the required time, the European Parliament warned of a number of ‘shortcomings in anti-money-laundering practices’ in the real estate sector.
As real estate continues to be an attractive avenue for money laundering criminals, firms must double down on their AML efforts and in-depth security of clients involved in property transactions.
Credit Suisse guilty of money laundering charges, handed £1.7m fine
One of the jewels in the Swiss crown, Credit Suisse was found guilty and fined for involvement in money laundering related to a Bulgarian drugs ring in the summer of 2022.
As the country’s first criminal trial of one of their major banks, Credit Suisse and a former employee were both found guilty for failing to prevent money laundering. Failings which ultimately enabled a Bulgarian cocaine trafficking gang to clean its dirty money through the financial system between 2004 and 2008.
At the time, CNBC reported the court found “deficiencies within Credit Suisse both with regard to the management of client relations with the criminal organisation and with regard to the monitoring of the implementation anti-money laundering rules.”
A watershed moment in Swiss history, the case has been seen by many across Switzerland as a sharp warning for the country’s banks, as prosecutors look to take a tougher stand against failings by financial institutions.
The firm was fined £1.7m and ordered to pay £15m to the Swiss government. The employee involved in the case was handed a suspended 20-month prison sentence and a fine for money laundering.
