A west London money transmitter has been landed with a £7.8m penalty after it ignored anti-money laundering regulations following an HMRC investigation
Touma Foreign Exchange Ltd was handed the record fine after it breached strict rules that could have left it at the mercy of criminals looking to wash dirty money, HMRC said today.
The company was fined by HMRC for a wide range of serious failures under the Money Laundering Regulations. Between June 2017 and September 2018, the business breached rules on risk assessments and associated record-keeping, policies, controls and procedures, fundamental customer due diligence measures and adequate staff training.
In addition, company boss Hassanien Touma was banned on 20 May 2019 from any management roles at a business governed by anti-money laundering regulations after he acted as an officer for the money service business (MSB). Touma failed to pass a vetting test to ensure he was fit and proper to carry out the role.
The fine is the latest action in the government’s fight against money laundering. It follows a month-long crackdown on MSBs that saw HMRC, the Metropolitan Police and Financial Conduct Authority (FCA) join forces to identify MSBs at risk of being used for money laundering to fund organised crime, such as drug trafficking, violent crime and terrorism.
During the campaign in July, Metropolitan Police and HMRC officers executed warrants at 12 addresses in west London, seizing evidence of money laundering. On 3 July 2019, Metropolitan Police officers arrested two men in central London and seized £100,000 cash intended for an MSB.
On 12 July 2019, after an investigation by HMRC assisted by the Metropolitan Police, Shunjian Jiang, a London man, was given a suspended jail sentence for trading as an MSB without being registered for anti-money laundering supervision. The judge ruled that Jiang’s home in Colindale, London, was bought using the proceeds of crime because he was illegally trading as an MSB without being registered with HMRC and would be subject to confiscation proceedings.
Simon York, Director of HMRC’s Fraud Investigation Service, said: ‘We know that criminals use MSBs to disguise and move dirty money, and we’re determined to thwart them by helping businesses avoid being exploited in this way.
‘However, a word to the wise for those firms who, either by ignorance or design, continue to flaunt the rules: this record fine shows we mean business, so get your house in order before we come knocking.’
As part of the commitment to educate businesses, HMRC and Metropolitan Police officers visited 40 MSBs in the Queensway area of London and reminded them of their obligations under the Money Laundering Regulations. Specially designed leaflets were hand-delivered to all 9,000 MSBs across London during July and August to highlight the money laundering risks and the need to properly manage such risks.
HMRC officers also visited five MSBs assessed to be at a higher risk of being used for money laundering and are taking civil action against four of them for failing to take adequate measures to protect themselves from criminal abuse.
By Philip Smith