Multistorey Money Laundering
Peter Lilley Acknowledged AML Expert Founder & Owner of Proximal Consulting Author of "Dirty Dealing: the untold truth about global money laundering"
As a senior law enforcement officer once told me: we try and create high level controls to stop financial fraud and money laundering but often (somewhat ironically) the criminals are able to crawl (or just walk) underneath our high level barriers and commit crimes. This is because they are looking for vulnerabilities at every level – the easier the better.
In an AML context sometimes the simple methods of money laundering remain extremely viable, profitable and difficult to detect.
This logically brings me to a multistorey car park….perhaps I better explain why:
This is a specific multistorey car park located in a provincial town in the United Kingdom. I know it well, as I frequently park there. It is built behind one of the town's main shopping streets and has an entrance inside to the back of a major chain store. So it is not really remarkable in any way….
Apart from one thing: there is a big sign at the entrance of the multistorey which proclaims that payments are "CASH ONLY". This is rather strange in this day and age, particularly when there is an open air car park next door to it which has machines that accept cash, card and mobile phone payments.
I am sure that there must be good reasons why the multistorey car park only accepts cash payments. Although apart from processing costs and the administration of plastic and phone payments I'm not certain what these good reasons could be; particularly as the COVID-19 pandemic has taught us that contactless card payments are a far more hygienic/safe way to pay for things.
And it goes without saying that I'm sure the operators of this car park are entirely legitimate……
But what if they weren't legitimate?
Let's say that there are 500 spaces in the car park and that it costs £2 per hour to park there. So if every space on the car park is occupied for seven hours each day the income generated is £7,000. The weekly turnover is £49,000. Note: the income will almost certainly be more than this as the car park charges in hourly increments whereas very few customers actually park in exact hourly blocks.
On this basis if the car park was totally full 52 weeks per year the total income will be £2,548,000 (52 weeks at £49,000 per week).
However this car park is not totally full every day of the week. On some days in mid-week I guess that only 20- 30% of the parking spaces are occupied.
And let's continue with the "what ifs"…. What if the operators of this car park are distinctly dubious and are also one of main dealers of illegal drugs in the town? You don't pay for illegal drugs by plastic card (unless both the user and dealer are fundamentally stupid!): you pay in cash.
The multistorey car park is a legitimate cash based business: anyone can go there and confirm that it is a car park and payments can only be made in cash. Cash receipts from the car park will not necessarily be questioned by any bank/financial institution.
But….what if this car park achieves only 50% occupancy in a year (worth £1,274,000) but actually banks the amount it would have received if it had been 100% full (£2,548,000). Which means that £1,274,000 could be dirty money from drug dealing which has been co-mingled with, and totally disguised by, the cash takings from the car park.
Obviously I don't think that this could be the case with the specific car park I am thinking about…
On the other hand (and recalling the words of my law enforcement friend) it is very easy to walk under the entrance and exit barriers in this car park!