A Day in the Life of an Amateur Money Laundering Investigator

I’ve always been an early riser, partly because I love that time in the early morning when the house is quiet, the first cup of coffee has been brewed and the day lies ahead. Coffee is an important part of my day so no instant for me. There’s a “bean to cup” machine sitting on the worktop in the kitchen. Two minutes to warm up, a few seconds to fill the milk jug, press the button and out comes a splendid caffé latte (the first of many).

I start on the iPad as it’s so portable and will happily sit with me on the island breakfast bar while the coffee does its trick and I plan out the day.

Like most days recently, much of the time is spent bringing together two of the more important elements of my working life, Danske Bank, Estonia and “The Dark Money Files” podcast. I’ve been entrusted by the Danish newspaper Berlingske, which first broke the story, with thousands of pages of bank statements from Danske and been given permission to mine them for information. The idea is to present it to a general audience, providing I don’t name any specific entities or individuals, with the intention of allowing them to get a better grasp of what is going on.

The trick, in the absence of being able to go into specifics, is to present the connections, to join the dots. Because by highlighting the patterns inherent in virtually all laundromat activity, we help the general public to understand that these are not just isolated incidents but part of a highly organised, well run, washing machine that launders money for just about any corrupt politician, crooked public official or member of an organised criminal gang.

And the only way to be able to make those connections is by having access to intelligently aggregated, global corporate data. Without it, the effort of searching individual registries for potential links would be so time consuming as to make the job impossible. And that’s where Open Corporates comes in.

I use it for many reasons but mostly for the following two:

  1. It has UK registry records going back much further than those available on the Companies House website which, somewhat bizarrely, removes them from the web search after around 6 years. Given that the laundromat activity at Danske took place starting from 2007, it’s imperative to have access to data going back that far
  2. Because it utilises the Open Data format, all registry records from all accessible jurisdictions are aggregated in the same way. This means that if a particular director, be they legal entity or natural person, is of interest, Open Corporates will show me all the global locations where they are active (within the scope of the data they have available).

Today, I’m planning out the structure of podcast 5 in season one of “The Dark Money Files.” This episode is called “The Billion Dollar Deal” and we are going to try and show where some of the money that went through Danske ended up and, more importantly, how it is all linked.

My focus for this element of the podcast is on accounts based in Latvia and I start with a UK Limited Liability Partnership which only appears once in the statements (some of them appear dozens if not hundreds of times) but which has piqued my interest and I’d like to know more.

Why has it piqued my interest? Because it doesn’t fall into the usual pattern of the LLPs I have tended to find in the Danske statements. Most of them are registered to the same address in Earl’s Court and have a pair of now notorious legal entities as their Designated Members (equivalent to directors of a Limited Company).

This one doesn’t and is registered instead to an address in London’s Notting Hill.

The main registry page tells me it has had two sets of designated members, neither of which are especially common. I need to find out more.

The first set were appointed at incorporation in 2005 until they resigned in 2014. I quickly ascertain that they were based in Belize (coincidentally, in the same road as the notorious legal entities mentioned above) and a couple of clicks brings me to a page showing them to have been designated members to a total of 107 LLPs all of which are now inactive. OK, let’s have a look at the second set.

Again, in a couple of clicks I find that they are based in Vanuatu (Vanuatu?!) and are, or have been, Designated Members to a whopping 285 UK LLPs. Who knew that there were 285 businesses registered in the UK that needed to have Designated Members based in Vanuatu, let alone bothered to ask “why”?

I decide to have a look at a few of the 285 and quickly establish that these two Vanuatu based designated members had also previously taken over duties from the notorious legal entities mentioned at the beginning of this article (they are all connected!!). But I mustn’t become distracted. The day goes on and the script for the podcast needs writing. Back to my original LLP!

I now know who the officers of the company were but what about their corporate filing history? It’s all there in front of me and it immediately becomes apparent that throughout their entire history, they filed dormant accounts. Which is odd as I can also see in front of me, on one of the Danske bank statements, a payment to them of a little over €130,000! Not much dormant about that.

Right, that’s about as much as I can get from this case study, time to move on to the next one.

10:00am

With another cup of coffee in my hands, I move to my main PC as it has a big comfy chair and a 34” wide screen curved monitor which looks lovely and has the huge advantage of being able to display a number of different windows at the same time.

Checking the bank statements, I notice that the next transactions Latvian transactions on the Danske Estonia bank statements are to a company which is famous for its involvement in the Magnitsky affair. There are a couple of payments totalling €800,000 so it’s a significant amount and worth a bit more research.

I knew there were some scans of bank transactions available online relating to this company and, sure enough, they also relate to the same Latvian account. Alongside them is a scan, allegedly from the New Zealand register of companies, with a very interesting snippet of information. Hmm, but before I get too excited, I need to double check, so I go back to Open Corporates.

Sure enough, when I pull up the company details and click on the director’s name, there is his address. The exact same address in Vanuatu as the LLP I was checking a short while earlier.

Now the thing is, there is absolutely no reason why these two companies, which both appear in the Danske account statements, should be related. The two payments to the Magnitsky company were in April and June 2008 while the one to the LLP was in October 2008. And yet, as clear as day, there is this common thread of an address in Vanuatu. I write all this up in the script for the podcast

1:00pm

It’s time for lunch. And a cup of coffee.

After lunch I decide I need one more example from Latvia to complete this element of the podcast and, would you believe, the very next Latvian transaction in the Danske statements I’m looking at, is for another of the Magnitsky companies. It’s a payment to the Estonian account this time and is for a fraction under €1m (and you would not believe how often I see payments in these statements for just under €1m but that’s a story for another day).

This one is registered in the UK, so I know there’s going to be plenty of information to review.

Back to Open Corporates which quickly informs me that it is registered to an address in Birmingham that I know, oh so well. In fact, it gets a passing mention in “The Dark Money Files” Episode 4 (Stacking the Deck). We were reviewing a whole bunch of New Zealand companies, all of which were registered to the same address in Auckland, and I pointed out in passing that one of the directors who appears repeatedly in these New Zealand companies also appears regularly in companies in the UK registered to this self-same address in Birmingham.

A moment looking at the computer screen soon confirms that it includes this well known Magnitsky related company as well (they are all connected). I know from previous research that she is, allegedly, a yoga teacher based in Cyprus (of course she is) but I also notice that this company has a legal entity as a director as well. A quick click on the link and Open Corporates takes me to their home screen and it tells me (thanks to the Open Data format) that not only is it a director for 96 companies in the UK, it is also a director for 10 companies in Denmark.

Denmark?

What, where Danske Bank is based? That’s surely got to be worth a look.

Click again and I find that the 10 Danish companies for which it is a “stakeholder” are all K/S companies.

Why is this interesting?

Because the report commissioned by Danske Bank into what went wrong in Estonia, specifically mentions the number of Danish K/S companies (some of which are known to be associated with money laundering). Like UK Limited Partnerships (which they are very similar to) they make it easy to disguise their ownership structure.

Sadly, the Danske report doesn’t name any of them, so I have no way of knowing whether these are part of that population but it’s an intriguing moment on which to end the day.

Three accounts, three allegedly different entities, but connections between all three. And, providing you know where to look and have the right tools for the job (thank you Open Corporates) it doesn’t take a lot of effort to find them.

5:00pm

And on that note, it’s time for a last cup of coffee and a contented smile in advance of tomorrow’s recording.