Estate agents are due to feature in a Channel 4 programme tonight on Russian buyers and allegations of money laundering.
The documentary, called From Russia With Cash, will allege that top estate agents in London are turning a blind eye to apparent money laundering by corrupt foreign buyers who are helping to fuel the capital’s property boom.
The programme is set to feature two undercover reporters posing as an unscrupulous Russian government official called Boris and his mistress Nastya, for whom he wants to buy a property.
The pair view five properties at prices between £3m and £15m.
According to a Guardian preview, the agents are made aware they are dealing with dirty money but agree to continue with a potential deal, instead of alerting the authorities of their suspicions, as required to do by law.
“In several instances the estate agents recommend law firms to help a buyer hide his identity,” says the paper.
Another paper, the Mail, ran the story this morning under an industry-damaging headline: Estate agents ‘help Russian criminals launder cash by buying mansions’
The agents caught on camera are from firms said to include Winkworth, Marsh & Parsons, Domus Nova, Chard, and Bective Leslie Marsh.
The Channel 4 team, which used secret filming, claims that if ‘Boris’ had gone ahead with the purchase, the agents could have earned up to £315,000 in commissions.
In the documentary, ‘Boris’ tells the agents he wants to buy the property with money taken from the Russian government, and that the sale and ownership of the property must be set up so that it cannot be linked back to him.
Investigator Roman Borisovich, who posed as Boris, said of the agents: “It’s appalling that they would all agree to keep my identity secret and suggest different ways of going ahead when it is clearly stole money.”
For its preview piece, the Guardian contacted all the agents due to be named by the Channel 4 programme tonight.
Marsh & Parsons, part of LSL, said it waits to see the content of the programme. Winkworth said that given the seriousness of the allegations, it has started an investigation but awaits the documentary before it can be included. Domus Nova did not respond to the Guardian but told Channel 4 that it acted entirely in accordance with anti-money laundering regulations. Chard said that had a formal offer to purchase been made, it would have followed anti-money laundering procedures. And Bective Leslie Marsh told the documentary team that as no formal offer had been made on the property, it had not started anti-money laundering checks.
From Russia With Cash is due to be broadcast on Channel 4 at 10pm tonight.
The documentary comes at a time when, coincidentally, the National Association of Estate Agents has just reminded its members that under anti-money laundering regulations, agents are required to register with a supervisor, usually HMRC, and to have a nominated person to act as a money laundering reporting officer.
The NAEA is currently collecting all the names of those money laundering reporting officers within members’ businesses, so that it can keep the industry updated on money laundering requirements.
Failing to observe money laundering rules could mean criminal sanctions, including prison.
A video excerpt from the documentary is here
This is what the official guidance says.
Comments (30)
Seemed strange that the program stopped short of processing the offers to check out the solicitors too!
Ah Yes…. a certain Non-entity called J Saville…. and how many stood by?…. a scandal of breathtaking scale yet so many bystanders hiding under stones…. the punishment of sorts…. knowing that they shamefully stood by and said nothing…. I would have crawled to the Police and any single influential person that could act to stop that monster!
I digress! Although…. the young girl who made a slightly odd comment about her father over 30 Years ago when I was visting her father at home in my capacity as PC Plod…. I could have ignored it because it was a huge can of worms to open…. however, I didn’t…. and he was later convicted. You either step up and do the right thing or line up alongside them!
Sermon over.
Ok, this is where it’s all gone wrong, Estate Agents are now immigration officers, police officers and tax inspectors!!
If you suspect money laundering, you should be reporting it as per the regulations, I.e completing a SAR.
The one thing you shouldn’t be doing is telling the potential money laundering individuals that you have or are going to report the suspicious activity. That’s tipping off, which will get YOU prosecuted.
So what are you to do? Tell the said money laundering russian you are about to report him and hope that a) he doesn’t pay you a visit late at night or b) he thanks you and then you get arrested for tipping him off?
IF YOU SUSPECT MONEY LAUNDERING, YOU HAVE TO REPORT IT.
So, you tell the Russian you can’t deal with him anymore because what he is doing isn’t cricket and then after doing that report him, he gets a visit from the NCA and he put two and two together and comes looking for you?
Or, you say nothing, play along and report it and let the NCA do their thing. If said Russian wants to buy the place you ask the NCA for permission to continue. The likely outcome is they will not reply as with all things no one has the time or resource to act, hence you now have Estate Agents policing the country.
It’s a minefield.
Now, do we know if these boys have gone back to the office and completed a SAR? That’s the question I would be asking.
And the other question the reporters should be asking is why are normal civilians being dragged into this stuff and threatened with fines and imprisionment if they don’t comply?!
Oh, that’s because that won’t sell papers or get many hits to their websites…..
By they way Trevor, if you are an estate agency business doing lettings, you do have to comply with lettings, but yes, lettings agents on their own don’t. Nuts!
I’m not condoning the actions of these guys, but we do need to know what they did after the event, because that is the most important part of it all. I read that some were putting people in touch with people to help facilitate the process and for those there is no excuse.
wilko “Surely the money only becomes “laundered” when they sell the property, so just buying the house is not an offence?”
I’m struggling to believe that someone who comes over as a very professional EA has actually posted that comment.
Buying a property with a large amount of illegally obtained cash and then selling it 6-12 months later is one of the ‘best’ ways of criminally laundering money.
And as for the EA’s named on the C4 program who totally ignored the up-front info that a property would be bought with dirty money etc., and continued with the viewing requests … for once I totally agree with GPL … THROW THE BOOK AT THEM.
The individuals involved had a simple reason for ignoring what they were being told … COMMISSION, COMMISSION, COMMISSION.
“I’m struggling to believe that someone who comes over as a very professional EA has actually posted that comment.”
Then you agree with me by saying; “selling it 6-12 months later is one of the ‘best’ ways of criminally laundering money.”
So you agree with my opinion that the money is only “laundered” once they sell the property and have “cleaned” the “illegal” cash…..that is the point where the offence has taken place.
I can see why you might think that, but it’s the criminal act of using the dirty funds to buy property. They could hold the property and rent it out, thus receiving clean money that way. It’s the action not the end result. Using funds that have come by way of illegal activity, I,e, the proceeds of crime, is an offence, let alone the original crime to get the money!
Our job is to report and it’s the NCA’s job to prove and prosecute.
“Our job is to report and it’s the NCA’s job to prove and prosecute”
Agreed, but I do not believe that any agent would stand in the witness box against some of the types of characters mentioned in this article. Fact is you can’t do this anonymously and you are required to give witness statement.
I would love to know how many reports have actually been filed by agents who have a suspicion of money laundering by sellers or buyers. Wouldn’t be surprised if you could count them on one hand.
Wilko…. honestly…. we can’t shuffle to one side with sny kind of reason.
It’s a Criminal Offence…. if it starts to develop…. get assistance early…. any right minded individual would want to protect themselves first!
noted Harree…. and no Horse’s Head in your bed in the morning!
” I’m not a snitch, a grass, an informer…. I’m just ensuring that those that act with criminal intentions have the spotlight shone on them and they get caught!”
So if the police asked you to appear in court as a witness against some really violent drug dealers, you would be happy to do so?
We sent in a report last year, the only one we’ve done. We never had a reply which makes you wonder whether it’s worth the time.
Do you think you would have been happy to stand as a key witness in court if they called you?
Well Wilko… here’s the problem… before and after my relatively short (5 Year) Police career, I always stepped forward… because if we all remain bystanders then “they” win.
To be fair on your extreme example, one can give evidence and retain confidentiality.
If we remain on the Money Laundering theme then I’m guessing those Russian Assassins are not parked outside your office. The clues are all there early enough that very few people need to get in that deep whereby they will be in danger if they report suspicious activity.
Another of my true stories is contacting the police when a former “Debt Collector for an Estate Agency” approached me to assist in getting a well known estate agent to go to a location under false pretences with the intention of giving his former boss a going over! Absolutely true. I warned the chap that approached me that I would go to the police if I really thought he was serious…. sadly he was…. so I reported it…. he then threatened me and I reported it!
What would uou do Wilko…. just go along with it and face the consequences later?
Forgive me… without bring reckless there are ways to deal with these scenarios… and my advice… dive in at the shallow end…. because the deeper it goes the more likely you are to drown!
i should write a book!…. the time a well known Gangster invited me to sell his home…. I was searched by his bodyguards outside…. and I declined his offer and I’m still alive!
This is simple to deal with…
Investigate, if sufficient evidence of wrong doing, then put on trial, if found guilty then convict, sentence, jail, fine or appropriate punishment.
There is no excuse for knowingly being part of money laundering… we all have a responsibility, we are not above the law….. estate agents, solicitors, financial advisors, politicians, ceo’s, national companies…. money laundering is part of a much bigger and serious problem that involves criminal activity…. stamp on it hard and keep stamping on it hard, regulate, invesigate hard, spare no-one that is knowingly involved…. and when we consider the sums of money potentially involved?…. how could we not know there is something criminal going on. You perpetuate the crime by turning and looking the other way.
20 Years ago, well before real regulation, I had a £400k buyer wanting to pay £200k in cash, I said to my owner who pondered, and where do you hide £200k?…. I advised him, buyer, me, him, both solicitors, all at his bank, get the £200k counted/recorded/documentated/witnessed…. that way we were all squeaky clean…. needless to say…. the £400k went thru on normal basis and the buyer abandoned his part £200k purchase. Today?….I would notify HMRC, end of! I saw someone dealing drugs from their house…. I phoned the Police Hotline with info…. I see someone up to no good, I phone the Police….. I’m not a snitch, a grass, an informer…. I’m just ensuring that those that act with criminal intentions have the spotlight shone on them and they get caught!
When the law and morals go out the window?…. we are one step from the worst regimes in the world. I hope the NAEA stamp on anyone found guilty or wrong doing…. however it’s the police, justice system and courts that need to start hammering down on this…. and sadly, many other matters.
Surely the money only becomes “laundered” when they sell the property, so just buying the house is not an offence?
No – at the buying stage, means they must have funds from somewhere????
Its the somewhere that needs to be clean. The buying with unclean funds, starts the washing process into a clean shell
The biggest failure is the lettings sector where cash is easier lost and doesnt come under AML
The commission is possibly too much an incentive for some.
Another reminder of why industry awards are a complete farce
Well said JungleProperty.
It appears if you ££SPEND with some portals, then you stand a chance of winning ‘agent with best presented handkerchief’ award.
Not at all surprising. Shouldn’t think it would take as much as an undercover reporter to expose illegal or immoral activities in an industry as criminally unregulated as Estate Agency in the UK – particularly London.
The only sadness is that it will be the negotiator who loses his/her job, rather than any kind of meaningful legislation being implemented that deters the directors and managers from encouraging this kind of culture, endemic to Estate Agency.
What? criminally un-regulated? Do you know what a SA 105 land and property return is? What about a section 19 report all agents are required if asked to return to HMRC?
The regulation exists to control Tax evasion and money laundering but with HMRC asking Betty and Beryl to manually wander through returns at their own pace it isn’t any wonder why they are only processing a fraction of the 4.1 million chunks of data each year.
Bix006 not sure you spelt that correctly? Unregulated, er yes we are, policed only after the horse has bolted may be more appropriate or do you mean licensed?
And HMRC are turning a blind eye to widespread tax evasion and money laundering which they could so easily stop.
I documented this 3 years ago and have a letter from my MP saying a system to identify both tax evasion and money laundering are of no interest to HMRC.
Channel 4 can lay what blame they like at the front door of agency, they would probably do well to understand the subject and solutions in a little more detail.
I think that HMRC have been deliberately stripped down to the point where they can’t function effectively. Pretty sure anyone who wants to tax evade will struggle to be caught.
But that was the whole point, I already built the process to identify every single penny and explained in detail to HMRC advisors what could be done with a mocro tweak to legislation.
I suspect the real issue is that such a system threatens comforatble civil service jobs.
Sat with advisors even very conservativly they estimated at least £1billion was being identified for collection.
It really does beggar belief that no -one is accountable for such a cavalier attitude to departmental incompetance.
I have been recently catching up with Yes,Minister on gold .Suprising how many of the plot lines are still relevant today ….
Try The New Statesman, that is so close it might as well be a documentary!
Over the last 12-18 months they have been restructuring and introducing new systems etc. HMRC haven’t always dealt with AML. Prior it was the OFT responsible for agents.
When the OFT dispanded HMRC inherited a large task. Trading Standards picked up agent policing and CPRs and BPR guidance which is under current review due to be released in August 2015
I agree with your comments Robert ,don’t forget Starbucks DMGT tax evasions
BTW , I’m finding Rummage4.com very useful, have you heard of Gotham City Research ?
and what it thinks of a Z portal net worth real worth, now that’s a story, the eye should also cover …. heading down south today 🙂 🙂
Thank you!
I haven’t heard of Gotham City research but I will be having a rummage. In respect of Zoopla net worth I know what I think it ought to be worth and how a Golden Goose for both print and digital has been salughtered for the sake of a Sunday roast.
Eye will find it very difficult to cover such a story, the threat of a legal battle is enough to censor anyone sane.
I will enjoy researching that, thank you!