The Iceman: The Rise and Fall of a Crime Lord (28 page)

They were never caught so it is impossible to say for sure but I have absolutely no doubt they carted hundreds and thousands of pounds through Glasgow Airport in their hand luggage. They were flying to Spain, Amsterdam and Dubai – all over the place – and I don’t think they could resist the opportunity to get some cash out of the road. What’s the worst thing that could have happened? They could lose a bagful of cash at check-in – a bad day at the office, that’s all.

 

Cleaning their money and keeping track of their investments is a full-time job for Stevenson and criminals like him. Of course, they will not be burdened with the paperwork but have to instruct their people organising that, keep briefed on their investments, and, most importantly, keep an eye out for new opportunities. That’s the key to it. The volume of notes coming in has to be moved quickly or you literally run out of places to hide them. You need a range of options, a number of different channels to get rid of it, so that, if one is closed, you can try another. Stevenson knew that. He wouldn’t drive past a For Sale sign without thinking about it. He was always looking for things to do with his money.

He might have the ideas but he still needed help to legitimise his money. And he got that help from legitimate people. Lots of very legitimate people.

Typically, they will have a number of businesses. Some may operate entirely legitimately after being bought or launched with criminal proceeds. Some firms may be laundering money. Some may be supplying services and goods to others owned by the same people. The aim is simply to create as complex a web of income, transactions and investments as possible – to build a shell of transactions coming and going to make it more difficult to identify and follow the criminal money.

Using dirty money to secure legitimate loans is one method of obscuring the source of the start-up capital. Banks are in the business of encouraging enterprise and, if people come to them with proof of identity and an acceptable level of apparently legitimate income, then there will be nothing to suggest that those loans should not be given. If you are apparently in a small start-up situation and you say, ‘I am employed as such and such and here’s some bank statements showing my income and this is my house and some proof that I own it.’, then banks cannot really be expected to question that.

Of course, the legislation now means you do not have to prove assets were bought with criminal funds to seize them. You must only prove that Mr X spent so many hundreds of thousands of pounds and then prove that his income is, or was, less than that. Years may have passed but the paperwork will still be there. It will be a case of rewinding backwards to the start and then looking at the conveyancing records, seeing where the money came from. The difficulty is that, once you have a range of businesses and they are buying and selling to each other or merging with each other, the money is being mixed up and the web is becoming more complex.

 

It has to be driven by intelligence. Once they are looking at a particular person, then the flags can go up at the banks, the tax authorities, wherever. Once an individual’s business is being investigated, then there is work that can be done without alerting them. The police can get warrants to access the bank accounts to look at the cash coming in and going out. They can look at Revenue and Customs records, look at VAT returns, look at staff numbers and wages through PAYE and National Insurance.

Police surveillance can test things like staff numbers and the number of customers going through a shop’s door, for example, but, eventually, you will come to a point where you need to see the books. There will be a raid and the accounts will be seized.

 

They can look at those books for the things that don’t fit in. There may be unusual patterns of transactions. One part of the accounts might not fit with another. They look at the cash flow, the receipts, the VAT records. They scrutinise all the pieces of information that make up the financial profile of a firm and then identify where there are possible mismatches, where the financial information is not fitting together as smoothly as it should.

Comparisons will also be made to other similar-sized businesses within the same industry to compare those key elements.

 

The ease with which the cash takings of taxi firms, for example, can be falsely inflated and the difficulties proving that make them attractive for money laundering. Criminals will pay tax on those earnings, of course, but they will see that as commission. They will get back eighty pence in the pound or whatever the tax rate may be.

Of course, buying property as an investment may well return more than that. They may easily recoup more than a pound for every pound invested.

There has been a growing awareness among law enforcement agencies that, if you can prove that an individual’s money has not come from legitimate services, then that money can be attacked. Businesses launched with or laundering criminal money are no different to a legitimate business. They will employ people, they will have managers, finance officers, accountants. There are records. There are accounts. If you can take away the finance, you are disrupting them. You are moving them on.

 

Ultimately, money laundering is a very simple concept. What are you going to do with that £1,000 or £100,000 that you have earned from drugs, human trafficking or whatever? How do you turn that money into legitimate money, money you can spend? You can’t put it into a bank because they will report it. Lawyers and accountants are under a similar obligation to report suspect transactions.

If you go to a lawyer with £20,000 in cash as a down payment on a flat and they are unclear where that money came from, then their report may soon be with the police. You can buy some big cash purchases but the car showrooms, the jewellers and the rest have also been ordered to be vigilant and report any suspicious cash payments. Of course, you will always have lawyers, accountants and traders willing to turn a blind eye – there will always be a small proportion of people prepared to take the money without question.

There is no doubt that very many criminals have the highest quality of legal and financial advice. There is the possibility that the police could build a case against their advisers for money laundering or that they might be struck off by their professional bodies. However, that will not necessarily remove them from their advisory role. It does not stop them having that expertise.

 

It would appear to make perfect sense. The costs involved in this kind of financial investigation are considerable and clearly the police are working under the constraints of their budgets. They must decide if £30,000 spent paying a forensic accountant to carry out a complicated investigation would, for example, be better spent putting another officer on the beat.

The workload is such that I would very much doubt they will be able to take on all the forensic accountancy previously contracted out. They will presumably act as filters. They will have the expertise to identify those investigations where there is the realistic prospect of identifying discrepancies capable of being taken to court. Ultimately, it has to be driven by the police and focused by their intelligence.

 

The fact that these guys have got copies of the act on their coffee tables suggests it’s working. The difficulties are twofold. One is to keep up with the new methods that criminals will find to move money around and out of Britain’s jurisdiction. The other is to ensure resources are there to fund these investigations as they increasingly become an integral part of criminal investigation. There are clearly budgetary limits for this kind of work. There is also a need to capture the knowledge – for all the expertise being gained by all the different agencies to be pooled.

 

In England and Wales, there is a greater emphasis on funding financial investigation and the sequence is clear – the more you do, the more you can do. There is a snowball effect. That does not seem to be happening in Scotland. The other factor giving financial investigation fresh momentum is advancing technology. Previously, if you were given a hundred pages of bank statements, involving thousands of deposits and withdrawals, you would have had to input them manually to create a spreadsheet. That is a time-consuming process. There are now computer programmes that can scan those statements and create a spreadsheet capable of being analysed for certain patterns or anomalies.

 

The skills and experience of the accountant looking at that spreadsheet and knowing what doesn’t look right and knowing where to start unpicking the threads are the key – in the same way, an experienced detective will look at a piece of intelligence and have a hunch that something doesn’t fit, that there is something not right. Everything rests on that expertise.

 

It was an adventure, a trip. We wanted to go to a different place. If it was drugs money, where were the drugs? Where was the evidence of drugs? What did they find in my pockets connected to drugs? They found money. Money can come from thousands of places rather than drugs. You can find money like that. People find money in bushes and all kind of stuff.