The new crimino-normal

Much as I try to ignore it – otherwise it absorbs our every waking moment, and some of our nightmares – I do occasionally find that there is an interesting nexus between the coronavirus and money laundering.  And this week there seems to be a money laundering pushmi-pullyu in action.  (For those of you unfamiliar with Hugh Lofting’s books about Doctor Doolittle, who could talk to the animals, the pushmi-pullyu is a gazelle/unicorn cross with two heads – one of each – at opposite ends of its body.)

On one hand – or perhaps, at one head – we read that criminals in London are taking advantage of the MSB sector (money transfer businesses and bureaux de change) to place their criminal earnings and thereby continue their criminal business.  According to a report on Politico, there are more than nine thousand MSBs registered in London and therefore covered by AML obligations, but the fear is that many of them are not doing the required checks (and that many more operate without a licence).  In February 2020 the NCA (the UK’s FIU) issued an “Amber Alert” to MSBs, reminding them of their AML obligations and alerting them to the dangers they face from “serious organised criminals who may try and access [MSB] services”.  Understandably perhaps, MSBs were declared essential businesses by the government and have been allowed to continue trading during the lock-down – but those who supervise and check them are not permitted to conduct onsite visits.

And at the other head, the American authorities are seizing more cash than ever from criminal gangs who are finding their usual laundering routes – including cash-intensive businesses on the high street (Main Street, I suppose) – closed thanks to the pandemic.  According to Bill Bodner of the DEA, the shuttering of non-essential businesses has had a “tremendous impact” on, for instance, the black market peso exchange.  Moreover (and this I am taking on face value – I’ve not done any research behind it) he points out that the actual flow of drugs has slowed because “most narcotics precursors from China are made in Wuhan [where factories are currently] operating at a reduced capacity”.  And if the pushmi-pullyu had a third head, it would tell us that the impact of this reduced supply is a rise in the price of drugs: “with supply chains in disarray, the wholesale price of methamphetamine has soared to about US$1,800 a pound, compared with about $900 a pound five months ago”.

In short, criminals are taking advantage of hobbled supervisors (and I assume – albeit to a lesser extent – investigators) and of rising prices for their products, but are foxed by the obstacles to their usual laundering routes.  Like all of us, they are having to find a new normal – and we must be ready to tackle it when they do.