Introduction
Financial crime is constantly evolving and becoming more sophisticated and complex, meaning that new threats are regularly emerging for Jersey. As an International Finance Centre, Jersey is inevitably exposed to money laundering threats. We have a social and economic duty to detect and prevent these threats. The money laundering typologies contained within this document provide key red flag indicators to be aware of when assessing if suspicious activity could indicate money laundering and provides links to further helpful reading on the type of money laundering highlighted by the typology.
The typologies take into account the money laundering risks identified in Jersey's National Risk Assessments and draws upon the financial crime intelligence held by the Jersey Financial Intelligence Unit and also the experience of law enforcement officers, regulators, the finance industry, litigators and insolvency practitioners.
We have a social and economic duty to detect and prevent these threats.
In compiling the typologies, emphasis has been placed on including the most prevalent types of money laundering that our finance industry may be exposed to, but also emerging risks seen globally and identified by our international partners. Where cases have been successfully prosecuted the link to the full judgment is provided to allow readers the opportunity to gain a deeper understanding of how the money laundering occurred.
The typologies are divided into sector specific examples, under the headings of Banking, Funds Services Business, Trust and Company Service Providers, Investment Business, Insurance, Money Services Business, Estate Agents, Dealers in High Value Good and Legal Professionals.
The document also acts as a self-learning tool with links to other helpful credible material available online, culminating in a knowledge check enabling readers to verify their understanding of the red flags associated with sector specific money laundering risks.
This document will be updated annually and reissued. If you consider that an emerging typology should be included in the next update please email the details to the Jersey Financial Intelligence Unit at fiu.admin@jersey.jersey.police.je
As you will see from the judgments identified in this document, Jersey has in the past led in the fight against money laundering and understanding the modus operandi that criminals use to launder their ill-gotten gains. By studying this typology document you will help us in the continuing fight against financial crime and removing the profits out of the hands of criminals, seizing such assets and using confiscated assets to reduce the impact of financial crime upon society.
Thank you for taking the time to read our document.
Detective Inspector Louise Clayson
Head of the Jersey Financial Intelligence Unit
Tax Evasion
Particularly relevant to the following sectors – Banking/TCSP/Estate Agents/Lawyers and Accountants/Auditors.
In 2020 one of the most frequent offences reported to the Jersey Financial Intelligence Unit via suspicious activity reports continued to be suspected tax fraud with 24.5% of all SARs submitted on the basis of the submitting institution suspecting fiscal/revenue fraud. In 2021 this figure was 21.1%. Jersey's National Risk Assessment concluded that Tax Evasion posed one of the most significant money laundering risks to the Island https://jersey.police.uk/media/622818/JFIU-Statistical-Report-2020.pdf
Tax Evasion Typologies
Tax evasion is an illegal activity often involving the misrepresentation of the tax payers affairs in which a person or entity deliberately avoids paying a true tax liability.
TYPOLOGY 1
Local business woman convicted of drug trafficking and tax evasion.
As part of a wider operation Joanne Jones' car-wash business premises in Jersey were searched and slightly under 500g of cannabis resin was discovered. Jones pled guilty to possession with intent to supply on the basis that she had been minding the cannabis temporarily for another whom she was not prepared to name, without financial reward.
Investigations of Jones' bank accounts revealed substantial funds which she insisted came from several legitimate sources. She was tried on counts of laundering the proceeds of drug trafficking and was acquitted after a two week trial in 2018 having successfully argued that the money that had flowed through her bank account was not attributable to drug trafficking but originated from income derived from her legitimate businesses - albeit undeclared to the Comptroller of Income Tax. She pled guilty and was subsequently sentenced for failing to declare the legitimate income to the Comptroller over a six year period, and to three counts of money laundering namely, possessing, controlling, converting or transferring criminal property relating to unpaid tax.
The Income Tax offences took place over 6 years and were admitted under declaration of what the Crown accepted were legitimate earnings amounting to £263,558.55, on which there was unpaid income tax of £59,242.27 together with a 10% surcharge and payments due under the long term care scheme, which gave rise to a total sum due to the Comptroller of £65,825.99.
The money laundering offences related to the concealment of the proceeds of the crime of income tax evasion, namely the £65,825.99 that she kept for herself instead of paying it to the tax authorities as required by law. Jones had effectively filed false returns with the Income Tax Department.
The court concluded that the offences of drug trafficking and the tax evasion should be marked by a sentence of imprisonment, not only to punish the defendant but also to send a message to others considering embarking upon similar fraudulent activity.
Jones was sentenced to a total of 20 months imprisonment and a total fine of £75,000. In addition, the sum of £65,852.99 was paid to the Comptroller of Income Tax from her restrained assets.
To view the full article click here
Originally Published by Government of JERSEY
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
