How crooks hide ‘dirty money’ by feeding cash into crypto, Dubai homes & posh schools raising fears over laundering laws

CRIMINAL gangs are going further than ever to hide their ill-gotten gains and avoid paying them back to victims, a Sun on ­Sunday probe can reveal.

Crooks are skirting around proceeds-of-crime legislation by funnelling the cash into obscure cryptocurrencies, properties in Dubai and private school fees.

Bloomberg

Zamira Hajiyeva, the wife of embezzler Azerbaijani banker Jahangir Hajiyev[/caption]

Channel 4

Ex-Met Police detective Peter ­Bleksley said: ‘Criminals are often very far ahead of the police when they embrace new technology and ways of hiding money’[/caption]

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Millions in ill-gotten gains are funnelled into the Dubai property market[/caption]

Figures obtained by The Sun on Sunday have raised fears that the current rules are not strong enough to stop criminals from hiding their money or laundering it abroad.

The 2002 Proceeds of Crime Act gives the police and courts power to strip offenders of their profits.

Cops can also seize flash cars, watches and properties.

Criminals often buy goods hoping they cannot be taken away, as police forces often claim the value of a car or watch rather than the item itself, which reduces over time.

Last year £885million was identified as potential profits from criminal activity — but by the time the money has been deemed potentially illegal, the criminals have often had it moved on.

‘Criminals are far ahead’

Cops and courts clawed back £243million thought to have been made from offences such as fraud, theft and money laundering — 30 per cent less than in 2022/23.

In the last five years, an average of just 16 per cent of funds and assets identified as proceeds of theft, and made subject to confiscation orders, have been paid out as compensation after being recovered.

Our stats show only around five per cent of fraud proceeds are ever paid back, while between 2021 and 2022, just 0.07 per cent of drug funds were paid out as compensation.

During the same period, £642million of cash identified, seized or frozen by cops remains unrecovered.

Our figures show the amount of compensation from proceeds of crime paid back to victims has collapsed by 43 per cent in five years.

The total handed back to ­victims plunged from £31million in 2019 to £17.5million in the year to April 2024.

Sources stressed that not all offences covered by the act, such as drug smuggling, have victims who can be compensated.

Most of the recovered cash is split between the Treasury, courts and police.

Insiders revealed some criminal bosses have paid thousands in upfront school fees for their children, which can never be recovered.

Many more have bought up property abroad or purchased luxury watches, trainers or obscure cryptocurrencies to evade UK authorities.

Former Met Police detective Peter ­Bleksley said: “Criminals are often very far ahead of the police when they embrace new technology and ways of hiding money. Law enforcement have been notoriously slow and largely ineffective at recovering the proceeds of crime.

“Some criminals need to be publicly seen as being destitute. Until that happens, there is no deterrent.”

Last year, the National Crime Agency said that posh Harrow School, in North West London, may have unknowingly raked in hundreds of thousands of pounds from firms that were part of a money-laundering network.

The Harrow Development Trust, which finances the school’s projects, was allegedly paid £500,000 in 2014 from the Latvian bank account of a British Virgin Islands company that investigators believe was channelling the criminal profits of rogue Azerbaijani banker Jahangir Hajiyev, who was jailed for 15 years in his home country in 2016.

The money was used for his two children’s private education.

The NCA believes his wife Zamira’s jewellery ­collection, including a £1.2million Cartier ring, had been bought with money plundered from the Azerbaijan National Bank.

Zamira, 61, was given back the jewels after she agreed to forfeit 70 per cent of her £14million Knightsbridge mansion and a golf club in Ascot worth more than £10.5million.

And Sami Raja, a conman from Grays, Essex, is said to be among the convicted criminals who own property in Dubai.

‘Recruit more expertise’

Raja was convicted of conspiracy to defraud and money laundering in 2019 after his cold-calling scam tricked 130 victims into buying fake carbon credits.

He and his four accomplices pocketed £2.4million.

His victims included an 89-year-old British man who lost his £250,000 life savings.

Raja, now 38, was brought back to the UK from Greece in 2020 to serve his eight-year ­sentence.

In other cases, the Serious Fraud Office has focused on cryptocurrency.

Alamy

Harrow School, where criminals pay fees with crooked cash[/caption]

A £1.1million diamond ring bought by jailed banker

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The UK has seized £5billion of Bitcoin, making the Government one of the world’s largest individual holders of the digital currency[/caption]

The UK has seized £5billion of Bitcoin, making the Government one of the world’s largest individual holders of the digital currency.

Criminals have switched to rival digital coins that are harder to trace.

Last year, Rolf Castell, 55, from Bristol, had £4,000 of cryptocurrency frozen, including £400 of Dogecoin — a currency started as a joke and promoted by Elon Musk.

The maximum prison term for violating a POCA ruling is 14 years, but many crooks are happy to spend extra time in prison instead.

Mr Bleksley added: “I was told a drug dealer was ordered to pay back £200,000 or do another two years.

“In his mind, that’s £100k a year to sit in prison. He decided to serve the extra two years.”

Former security minister Sir John Hayes said: “We need to recruit more expertise, and if necessary, we need to have further laws.”

A Serious Fraud Office spokesman said: “We will always seek to compensate victims wherever assets are recoverable.”

The Home Office was asked to comment.