The multimillion pound spending habits of corrupt members of the global super-rich – including 421 luxury homes, three superyachts, seven private jets as well as elite private school fees and even hovercraft – have been revealed in a groundbreaking analysis of more than 400 money laundering and corruption cases.
Research by Transparency International, an anti-corruption campaign group, found more than £300bn of suspect funds have been funnelled through the UK banks, law firms and accountants before being spent on a £1m Cartier diamond ring, masterpiece art works from Sotheby’s, and a £50,000 Tom Ford crocodile-skin jacket with matching crocodile-skin handbag from Harrods.
The suspect cash – which often comes from corrupt officials’ embezzlement of hundreds of millions of pounds from poor countries’ state coffers – was also found to have been spent on a £200,000 Bentley Bentayga driven by the 22-year-old son of the former prime minister of Moldova. His father, Vlad Filat, had been sentenced to nine years in prison for his role in the “theft of the century”.
In its forensic analysis of more than 400 global bribery, corruption and money laundering cases in 116 countries, Transparency International’s At Your Service report found 582 UK firms or individuals had helped rich people bring suspect funds into the country.
The money was paid through some 17,000 shell companies, 1,455 of which were registered to at the same serviced office above a wine bar in Birmingham.
“We’ve known for a long time that the UK’s world-class services have attracted a range of clients, including those who have money and pasts to hide,” said Duncan Hames, director of policy at Transparency International UK. “Now, for the first time, we have shed light on who these companies are and how they have become entangled in some of the biggest corruption scandals of our time. This should act as a wake-up call for government and regulators, and deliver much-needed reforms to the UK’s defences against dirty money.”
One case revealed that a shell company called Airship Universal was used to buy a corporate box at Chelsea FC’s Stamford Bridge for £126,000. In another case £34,827 was paid to a now-defunct hovercraft company in Kent.
Almost £3m was funnelled to private schools, including Charterhouse, Harrow and Lancing College. In 2010 alone Charterhouse, in Surrey, which describes itself as “one of the great historic schools of England” received £300,000 of funds linked to the Troika Laundromat scheme to move £3.5bn out of Russia, according to the report.
British universities, including the London School of Economics, the University of York, the University of St Andrews and University College London, were paid more than £500,000. The payments all came from shell companies with bank accounts at institutions that have since closed owing to mismanagement and money laundering failings, the report said.
Earlier this year the National Crime Agency (NCA) seized £25,000 of suspect cash from a niece of Syrian ruler Bashar al-Assad, who had been studying design at the University of the Arts London. Several members of her family are subject to international sanctions. Anisseh Chawkat, whose mother is al-Assad’s sister and whose father had been the head of Syria’s military intelligence, was living in a £60,000-a-year rented flat in Knightsbridge.
In another case, Vlad Luca Filat, the son of Vlad Filat, the former prime minister of Moldova, was studying business at City University in London. An NCA investigation found that the son’s extravagant lifestyle in the city, which included a £1,000-per-day Chelsea penthouse and £200,000 Bentley Bentayga, was funded by large deposits from overseas companies, including in the Cayman Islands and Turkey. Large cash sums were paid into three HSBC bank accounts, including £98,000 in one three-day period. Facebook posts showed the 22-year-old drinking Dom Pérignon through a straw at beach parties in St Tropez.
For offspring that may not have been clever enough to get into top schools or universities on their academic merit, the researchers found that more than £300,000 was spent on “educational consultants helping to secure places at the most prestigious institutions”.
Large fees were paid to an educational consultant from funds linked to the Troika Laundromat scheme, which helps parents gain places for their children in top private schools.
Daniel Bruce, chief executive of Transparency International UK, said: “Government and law enforcement agencies have made real progress in recent years to reduce the places for corrupt individuals to hide, yet our findings confirm it is still far too easy for criminals and the corrupt to seek impunity with the assistance of UK businesses.
“Despite the dedication of many committed professionals in the fight against corruption, there remains too much poor practice to be able to assume bad behaviour is confined to a few rotten apples. Businesses and government should redouble their efforts, through resource and will, to remove the helping hand for those who have abused positions of power and stolen from their people.”