One of the most common requests I have from people commissioning my training is for case studies – stories about money launderers. And I am more than happy to oblige, as researching these creatures is one of the guilty pleasures of my life. Take yesterday, for instance, when this headline flashed across my screen: “Mexico’s anti-money laundering chief resigns amid scandal”. Well, who could resist? Turns out it might not be anything to do with money laundering – the head of Mexico’s FIU got married and on the private plane he hired to take “influential guests” to his wedding in Guatemala there was also a bag containing US$35,000 in cash, which was apparently correctly declared and intended to be spent on medical treatment in the US. (But I have questions: how can the head of an FIU afford private planes, why does he have “influential guests”, and do doctors in the US really accept bags of cash?)
However, I think it is important to get the message across to staff – who are, after all, your front-line defence – that money laundering is not always, indeed not usually, as fun and glamorous as this. Most money laundering is dull, pedestrian and unambitious. As an example, I often tell the story of Ian Woodall, who worked for Westminster Council as an interim chief investment officer. Between January 2009 and December 2012 he stole £924,841 from the council by tricking colleagues – who trusted his advice – into signing off on payments from their billion-pound pension fund by telling them that he was making investments. And in a way he was: he was investing in his own house and car and – morally interesting, this – he paid off his tax bill at HMRC. The laundering came about because Woodall transferred the money from his UK bank account to accounts he had opened for this purpose in Switzerland. The theft was uncovered in September 2013 when an audit into the council discovered almost £1 million had been “unlawfully removed”, and in January 2019 Woodall was jailed for seven years. No private jets, no glamorous birthday parties stuffed with influencers, no fleet of diamond-encrusted sports cars – but all the more missable for it.
If we feed staff a constant diet of high-level, high-octane, high-glam stories about top level criminals and corrupt PEPs, we risk them getting the idea that all money laundering is like that. In reality, it’s mostly quiet, modest and sneaky – it happens every day, in most financial institutions, and we need to remind them of that. So for every Obiang in your training, make sure you include a Woodall as well.
I hate money laundering 
Thanks Susan. Putting it like that makes the job of explaining what’s done in New Zealand easier … Ian Woodall would just have got a mate (who perhaps would like a few hundred thousand too) to have signed off a Non-Disclosure Agreement about it. In New Zealand, they cover criminal offences up, third parties are bound by them, the police and SFO fall silent if they see one … It’s not difficult to understand, just difficult to believe. And yet …
Hello Caroline, sadly we have our own version of that here in the UK – plenty of people with connections getting away with all sorts of things! I suspect Mr Woodall simply didn’t have the right “friends”.
It would be nice to think that Mr Woodall wanted to do his civic duty and pay his taxes out of moral convictions. But it is more likely that he understood that paying tax on a portion of his income legitimised the rest of that income. A subsequent effort to confiscate that income would involve the prosecution calling the HMRC as witnesses to the fact that they accepted taxes on the proceeds of crime instead of doing a confiscation themsleves. This would be awkward and explains why good criminals pay their taxes – to avoid convictions, not to live up to them.
That’s the clearest explanation I have ever read of this issue, Tristram – thank you.
I worked for Westminster Counci and in the mid-1990s discovered a hole in the accounts in excess of £900,000, going back four or five years. I reported it to the Manager, offering to look into it, but this was rejected and instead, the sum was simply written off within a fortnight.