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HMRC issues record £23.8m money laundering fine

The money service business MT Global has been handed the largest ever fine for money laundering non-compliance of £23.8m by HMRC for “significant breaches”.

12th Jan 2021
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On 7 January, HMRC released the latest names of businesses hit with penalty notices for breaching money laundering regulations, and top of the list is Luton-based MT Global Ltd. 

HMRC found the money transfer business had breached seven regulations between July 2017 and December 2019 including failures in risk assessments and associated record-keeping, policies, controls and procedures and fundamental customer due diligence measures.

The big fine for MT Global comes as HMRC continues to use its powers to crack down on those that flout money laundering regulations, while accountancy service providers (ASPs) remain under scrutiny as a recent national risk assessment paper scored the profession ‘high risk’. 

The MT Global fine was by far the biggest fine, but smaller penalties were also dished out to estate agents. Robert Holmes & Company received a £6,591 fine for money laundering regulation failures in having the correct policies, controls and procedures, internal controls and due diligence. 

Reading-based Landmark Sales and Lettings Ltd, another estate agency business, also committed due diligence and timing of verification failures and was fined £5,250. 

The final fine of £2,500 went to a company service provider for breaches in carrying out risk assessments and having the correct policies. 

The MT Global fine is over double the £9.1m that was issued in total to non-compliant businesses and individuals in 2019/20 and outstrips the £7.8m penalty given to west London money transmitter Touma Foreign Exchange Ltd for ignoring anti-money laundering regulations last year. 

While no accountancy firm faced penalties for breaking money laundering rules, Tamworth-based accountancy service provider Ruth Berridge did feature under the list of businesses who had their registrations cancelled by HMRC. The list of cancelled money laundering registrations also included five money service businesses. Meanwhile, three money service businesses had their registrations suspended in 2020 until the start of this year. 

Nick Sharp, deputy director of economic crime at HMRC’s fraud investigation service, said: “Businesses who fail to comply with the Money Laundering Regulations leave themselves, and the UK economy, open to attacks by criminals.”

Given the size of the penalty issued to MT Global,  Justin Stevenson from RSM said it's clear HMRC is intent on seeking penalties under MLR. "We may therefore see a steady stream of larger fines for those businesses that are found to be non-compliant with the anti-money laundering provisions. It also seems likely that we will see HMRC pursuing more criminal convictions and issuing penalties under the CCO legislation."

HMRC supervises more than 30,000 businesses across the UK, including accountancy firms not supervised by their professional body. 

The 2020 national risk assessment for money laundering continued to score accountancy services as high risk, especially when “ASPs do not fully understand the money laundering risks and do not implement appropriate risk-based controls” and this is prevalent where ASPs fail to register with a supervisor.

Last year's ICAEW’s 2020 anti-money laundering monitoring report found that the most common areas of non-compliance with its members are firm-wide risk assessments, followed by updating customer due diligence and then risk assessing clients. The findings from the report showed that 82% of firms reviewed had minor breaches, with fines issued to 38 firms totalling £90,350.

Replies (11)

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By Calculatorboy
12th Jan 2021 23:58

I've been gradually dumping these type of clients over the last few years , happily i don't have any left

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By Justin Bryant
13th Jan 2021 09:07

I've just had a look at its accounts and there seems to be no chance of that ever being paid and perhaps that point could have been mentioned to make this story more relevant, accurate & balanced (clearly HMRC's press office would not wish to draw attention to that problem point).

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Replying to Justin Bryant:
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By Brend201
13th Jan 2021 20:16

Yes - total shareholders' funds as recently as November 2019 were a mere £154,824.
In addition, MT Global was one of the businesses whose registrations were cancelled.

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By Software Seeker
13th Jan 2021 20:55

I saw this earlier this week on an accountancy update missive. What the heck did they do so wrong to warrant a £23m fine! And what's the point when the company clearly won't be able to pay?

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By Trethi Teg
15th Jan 2021 09:54

I have no idea what they may have done but whatever it was must have been serious stuff.

Given that what other action has been taken against the company and more importantantly the directors and shareholders of the company (probably the same people). Are there no criminal charges here. If not why not. There appears, on the face of it, to be conspiracy to commit money laundering offences etc.

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By johnjenkins
15th Jan 2021 10:12

Let's have some details so that we can see what is going on. I can only presume that as it's money transfer companies that are getting the big fines so it's to do with money being transferred. Come on HMRC, where, why when etc. etc.
Scams galore, Money Laundering, data fraud. Isn't it about time our Government put a proper team together to cut down this widespread activity. Surely we have the hackers or whatever to either stop it or at least send the culprits to jail. A multi million pound fine that can't be paid - it's like fining a student £10k for having a party - priceless.

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By AndrewV12
15th Jan 2021 10:45

For those who have a little time on their hands why not type in MT Global Limited into your search engine, I was most surprised off there premises, they might as well have worked from home. I agree how are they going top pay the 23.8 million pound fine, sell the van in the photo.

Or is this another case off the big boys (UK banks) get away with murder and the little guys cop it big time. London has been cited in some quarters as the world centre of money laundering, well that's one thing, but as its Luton... Oooohhhh we have to throw the book at them. If they were based in London they may have got away with it, who knows.

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Replying to AndrewV12:
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By MC1
15th Jan 2021 11:52

Yes, a back street shed of an office. They would need to sell everything you can possibly get into one streetview view and quite a few houses either side I would think. Seems to also be some connected people with companies all being set up and then dissolved a couple of years later - not judging - maybe they just think they are going to need lots of companies and then find they don't.

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Replying to AndrewV12:
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By Software Seeker
15th Jan 2021 12:30

Being from Luton, I know the area where their offices are based. It is a residential area. Wonder if we’ll be seeing it on Police 24/7 at some point.

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By BernieBrandon
15th Jan 2021 14:56

So as Justin says in this thread zero chance of this "record" fine ever being paid but where does that leave the Directors of this Company ? Will they just carry on as normal ( likely) or will the Directors actions now attract some personal remedy e.g. being fined individually to pay those fines out of their own pockets OR perhaps Disqualification ? This is a much wider problem of course and all the time one can see big corporations in all industries being fined or made to pay damages for wrongdoing but never the individual Directors responsible. It is high time we had a new set of remedies and a new criteria for making Corportate Directors personally liable for their actions only then would we see a much needed change in culture.

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By roger.meyts
16th Jan 2021 08:31

Based in Luton? Says it all really.

Had to pick something up in Luton a year or so ago. As you drive into town, the sign says "Welcome to Luton. Home of Luton Airport."

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