Bruce Schneier wrote about the Kent Robbery where “Something like 50 million pounds was stolen from a banknote storage depot in the UK. BBC has a good chronology of the theft.”

I’m told The Times is reporting it as a “tiger kidnapping” with a similar plot to the recent movie Firewall. This is Britain’s biggest bank heist ever getting away with some £50 million ($87m USD) in cash!

Not Bad For a Cubicle blogs that The Independent has a great story describing how dumping part of the money was part of the robbers’ meticulous attention to detail:

If the notes discovered in the van had been newly printed, they would be very hard to get rid of. “It would be very foolish to try to spend them or deposit them in a bank account in this country,” said Prem Sikka, professor of accounting at Essex University. “The serial numbers would make them easy to trace.”

Far better to abandon them and carry off only used ones that had been in circulation already and would be untraceable – and which may have been worth up to £35m on their own.

The blogger writes that “Even for a group of skilled professionals, there’s still significant logistics involved in transporting and laundering large quantities of cash, and plenty of ways the whole thing can come unraveled.” The Independent continues:

The cash presents a physical problem. The IRA raided the Northern Bank in Belfast in December 2004 and stole £26.5m, but the Irish police found £2.3m stuffed in a wheelie-bin at the home of a suspect. The Tonbridge gang will have had to work out what to do with 800,000 pieces of paper, weighing up to 900lbs.

There are ways to launder that volume of cash, despite the ferocious laws introduced recently to track and stop terrorist money, but to do so will take expertise, time and patience. Vast amounts of patience. Far more patience than bank robbers and their accomplices usually have, however professional they are. Somebody usually cracks.

The Independent continues describing some of the very indirect problems that arise from stealing this much money. “After a long, nerve-shattering and complicated process in which the robbers might be betrayed, found out or cheated at any step, they can finally flash a little cash. … If they have not already gone to prison, killed each other or been driven mad.” The psychology of a crime is a very critical piece and one that is rarely ever discussed in movies or newspapers.

But if you can work out all those other issues, The Independent lists a short list of ways to launder that £50m.

COUNT THE CASH. If there are any new, traceable notes, chuck them. Prepare for prison. What we are about to describe is theoretically possible, but the chances of success are extremely slim

BURY IT, put it away, stick it in an inconspicuous lock-up or security vault for as long as you can bear to do so, at least until the fuss dies down. That might take a year

HIRE YOURSELF A RELIABLE FINANCIAL ADVISER who knows both how to bend the rules and keep his mouth shut. Pay him well. (This is not a real one, by the way)

SPEND A LITTLE IF YOU MUST, but keep it to small amounts of used notes only, in places such as dodgy casinos where nobody looks too closely at the cash. Don’t be flash

RECRUIT SMURFS – lower-ranking villains who are used to handling funny money – to change bundles of less than £5,000 for euros at friendly bureaux de change

COLLECT THE EUROS and take them into Europe, through the Tunnel or on the Eurostar. Stay calm and watch your mates carefully – there is a £2m reward out, after all

WALK INTO A BANK IN LIECHTENSTEIN, one of the few countries in Europe where the law protects the identity of account holders, even from police investigators

OR SMUGGLE THE NOTES OUT OF BRITAIN. If you did not do this on the same night as the robbery and before the alarm was raised, then wait as long as you can

TAKE THE MONEY TO A COUNTRY where the customs officials can be bribed to certificate your cash as clean. Start a company. Experts suggest the Balkans would be a good choice

START ANOTHER COMPANY IN DUBAI, where directors do not need to be named. Use the Balkan money to buy expensive products from it (which need not exist)

TRANSFER THE INCOME from Dubai to a tax haven such as the Cayman Islands where secrecy is assured. Set up a blind trust and nobody will know it’s for you

BRING THE MONEY FROM THE CAYMANS back to the UK through more shell companies. Set up an apparently legitimate business here. And hope nobody asks why it never goes bust

OR USE THE PROCEEDS you have brought back to buy – slowly, discreetly – diamonds, property or anything else that might be an investment. Then sell up, and all your money is clean

OR CHARGE UP an anonymous ‘stored value’ account in the Caymans and withdraw money, untraceably, from any ATM. In your dreams. In reality, you will probably be in prison by now

I’m not sure where the newspaper came up with their money lundering laundry list (pardon the pun) but it reads like something taken from an old James Bond book or Mission Impossible movie. Anyone who launders money knows that Dubai is part of the UAE and has an alliance with the US for financial and military reasons.

Also, the Caymen may have been made famous in John Grisham’s book The Firm, but it’s not the best place to stash stolen cash. Some place like Vanuatu would be much better. According to the Wiki article on tax havens it’s “an island archipelago state in the Micronesian Pacific, is a tax haven that does not release account information to other governments and law enforcement agencies. In Vanuatu, there is no income tax, no withholding tax, no capital gains tax, no inheritance taxes, and no exchange controls.” If that’s not an option then try Bermuda or the Bahamas.

The paper got it right with a few points in that you need: a point of placement being the place the funds are received from, layering to conceal the funds location, and integration to re-enter the funds into the financial system.

Money laundering is a complicated business similar to regulatory compliance. You have to know and understand not only the rules, but the actual practice of those rules; know the players and their levels of reach; and track the industry as it changes. That’s why, just like in regulatory compliance it’s always good to have someone who is experienced in any large scale activity you begin.

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