A global “money laundering and terrorist finance network” that shipped £310 million of criminal profits overseas in a year using high street money transfer shops in London has been busted by Met detectives.
The illicit operation saw huge quantities of cash being smuggled out of the country to pay for drug imports by crime gangs operating here.
Two of the main suspects are believed to have been involved in shootings in London in a sign of the violence triggered by the criminal enterprise.
The investigation has also led to £7 million being frozen in accounts in London and another £23.6 million being seized in New York.
The detection was revealed today by Scotland Yard to highlight its growing concern about the scale of dirty money being channelled in and out of the country via “money service businesses”.
About 10,000 such businesses — which include money transfer shops and foreign exchange bureaus — operate in London.
But senior officers, including Commissioner Cressida Dick, believe that lax regulation has allowed some to become a front for money laundering which is fuelling violent crime in London. Much of the money is believed to be flown out on crates to Gulf states and other destinations.
Detective Superintendent Nick Stevens, who leads the Met’s economic crime unit, said “Operation J” involved “an investigation into a global criminal money laundering and terrorist finance network” in which “money service businesses in London [were being] used as a front to launder £310 million in one year”.
He added that the money was used primarily for drug trafficking and to pay for bulk importations.
He declined to give further details or to explain the terrorist connection.
Officials also said that “ongoing sensitivities” connected to the case meant that more information about the people or money service businesses involved could not yet be provided.
Ds Stevens said “cash is still king” for criminals in the drugs market and proceeds are being moved through the “disproportionately high” number of money service businesses in the capital.
“That part of the financial sector is increasing because ... it’s getting harder for criminals to farm their proceeds of crime through the regulated banking sector,” he said.
Ds Stevens added the Met was working with HM Revenue and Customs and the Finance Conduct Authority to more tightly regulate money service businesses and it is continuing “joint operations with them” to address the problem.
Today’s warning comes after Ms Dick issued a similar alert to MPs earlier this year. She told the Commons Home Affairs Select Committee that the businesses were “not very well regulated” and estimated they are used to move £2 billion a month out of Britain.
Senior officers have emphasised that not all of the transfers involve illicit cash and they can be useful for those with limited access to bank accounts.