In its first AML prosecution of a high value dealer, the UK’s HMRC has fined Bedfordshire company director Grenville Eames £16,000 for failing to abide by the Money Laundering Regulations 2007. Eames’ company, JGE Commercials Limited, was also fined £16,000 and ordered to pay a confiscation order of £135,900 within three months. Eames had registered his company – a truck and plant hire company which buys and sells commercial and large plant vehicles – as a High Value Dealer with HMRC because he wanted to continue dealing in large amounts of cash, and thus became subject to the requirements of the Regs. And under the Regs, all HVDs who take €15,000 (in any currency) or more in cash must provide documentary evidence of checks made on the client’s identity and the source of the funds for the transaction. Eames was arrested after early morning raids at his home and business addresses in September 2012, and investigations showed that he had failed to keep the required records for large transactions totalling an estimated £170,000. According to Adrian Farley, the man from the HMRC: “The money laundering regulations are in place for a very good reason, to protect the public and to stop crooks benefiting from their criminal profits. Eames kept poor records and had numerous chances to correct the situation but failed to do so. As a result he was charged and prosecuted.”
I have always found the HVD aspect of the Regs intriguing. For a start, I have often wondered why the obligation to register falls only on those trading in goods for cash, and not services – it’s the cash that’s the issue, not the thing for which it is exchanged. And – given the number of times I am asked to explain during training just what the HVD category is, and who is covered, and what it involves, and this to an AML-educated audience – I am not at all convinced that the general public (and in particular the business-owning general public) has been told enough about it. So how many HVDs are there that don’t realise that they are HVDs and so have not registered? And of those that have registered, how many realise quite what that entails? Now that HMRC has drawn first blood, I rather suspect that we may see many more HVD prosecutions.
well, if I were into the business of tax evasion, would be delighted that HMRC’s attention has been successfully diverted away from what they’re supposed to be doing. which I believe was (or at least, used to be)…collecting taxes? or have I misunderstood?
I hope Mr Eames finds some suitably tainted proceeds of crime to finance those fine payments. because obviously, he just doesn’t have the time to run an honest, above-the-board business…
It’s an interesting comment you make about whether HMRC should be a supervisor for AML purposes. In the UK we have a rather fragmented AML supervisory regime, with several responsible agencies – although it’s nowhere near as fragmented as in the US. But perhaps it should all be centralised. But would one agency be experienced enough to be able to supervise the financial sector, lawyers, accountants, estate agents, casinos and HVDs?
Best wishes from Susan
This makes me soooo happy!!! Yes, i totally agree that HMRC have enough on their plate trying to find missing taxes, but i’ve been waiting a long long time for them to finally start taking their role as AML supervisor seriously and start handing out fines.
Now, where did i put my little black book…….
I thought this might warm your cockles, Kay!
With regard to the point about HVD MLR requirements applying where GOODS are sold but not where SERVICES are sold, I believe the point is that a person who buys goods with (dirty) cash can then re-sell those goods in return for (clean) money – which achieves the objective of money laundering. But that is unlikely to be the case where a person purchases a SERVICE for cash.
Welcome to the blog. I think the issue with people paying for services with dodgy cash is that the money is then paid to the merchant and he can pay it into his bank as though legitimate. Granted, the criminal does not get anything he can sell on in exchange – but he does get a cover story, and the whole thing could be completely bogus (with no services actually being sold). My thought was that it might be sensible to have service providers who accept payment in cash (large amounts) made more aware of the dastardly ways of criminals, perhaps by bringing them into the AML fold.
Best wishes from Susan