Anti-corruption activists say billions of dollars earned from criminal acts are passing through the London property market. They also say a lot of the money for housing and other real estate is coming from Russia.
The British government is now promising to fight the money-laundering activities. But one investment advisor told VOA the government has known about the problem for years.
Over the past five years, major properties in London have risen in value by 42 percent. Activists say one reason for the increase is the rise in the use of what they call “dirty money” to buy homes and buildings.
Recently, a British television program reported on an investigation into the use of stolen money to buy property. The program was called “From Russia With Cash.” In the show, anti-corruption activist Roman Borisovich was seen speaking with several real estate agents in central London. Mr. Borisovich told them he was a Russian government minister who wanted to buy property with stolen money. The activist later told VOA on Skype that the agents did not care where the money came from.
“They were all eager to proceed. Even when I was telling them that the money was meant for the procurement of drugs (medicines) and I stole the money, and obviously some sick people were deprived of health care. And they could not care less.”
Mr. Borisovich says the real estate agents all suggested he buy the properties through overseas companies to hide the identity of the buyer. He says one agent proposed he use the relaxed tax laws of Cyprus and the British dependency of Jersey to create a trust. The agent said this legal agreement then could be used to set up what investigators call a “shell company.”
“And this particular agent was volunteering to put us in front of Jersey financiers to put the trust together, and a Cypriot lawyer to put everything else together.”
The British government says foreign companies own $191 billion worth of property in Britain. Prime Minister David Cameron has said that most are legal businesses. But he admitted some are not.
“We need to stop corrupt officials or organized criminals using anonymous shell companies to invest their ill-gotten gains in London property without being tracked down.”
Justin Urquhart Stewart works at Seven Investment Management. The company helps people invest money. He says the British government has known about the money-laundering problems for years.
“This is dirty money, coming from crime, maybe coming from terrorism, so this needs to be dealt with now.”
British law says real estate agents must tell officials if they believe the money being used to buy property comes from criminal activities. But many agents say they should not be expected to know the source of money, especially when buyers are using complex methods to hide fraud.
I’m Bob Doughty.
Henry Ridgwell reported on this story from London. Christopher Jones-Cruise adapted it for Learning English. George Grow was the editor.
Words in This Story
money laundering – v. to put money from illegal activities into a business or to buy goods or property in order to hide where it really came from
proceed – v. to continue to do something; to take action
procurement – n. the act of getting (something)
deprived (someone) of (something)– phrasal verb. to take something away from someone or something; to not let (someone or something) have something
shell company – n. a company that exists but does not actually do any business or have any assets (materials, possessions, etc.)
relaxed – adj. not carefully controlled; eased
anonymous – adj. not named or identified
ill-gotten gains – idiomatic phrase illegally-earned money or assets
tracked down – phrasal verb. investigated, discovered or found
fraud – n. the crime of using dishonest methods to take something valuable from another person
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