London has become the money laundering capital of the world with City firms helping corrupt officials and criminals from across the globe hide trillions of dollars of their ill-gotten gains, according to one of Russia’s most prominent businessmen.
Alexander Lebedev, the Russian-born owner of The Independent and the Evening Standard, claimed that London-based banks had helped hide more than $6 trillion in corruption payments and criminal proceeds since the turn of the millennium and warned that the City was now the “epicentre” of a global “financial services oligarchy”.
As a former KGB officer and outspoken critic of Vladimir Putin, Mr Lebedev’s accusations represent a blow to London’s attempts at rehabilitating its reputation after a series of fines given to British banks over their involvement in everything from sanctions busting to money laundering.
Mr Lebedev said he believed as much as $1 trillion had been stolen from Russia since 2000 and nearly $4 billion from China, much of it ending up passing through London-based firms that, for a fee, would help corrupt officials and businessmen hide the money from the authorities.
“Many of the perpetrators have been able to move abroad and draw on the expertise of what I term the ‘financial services oligarchy’, of international banks, law firms and accountants, to ensure they can continue to live off the proceeds of their crimes,” he said.
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“Sadly London is at the very epicentre of this web. Much of the illegal profits flow through the City.”
The accusations against the City come at a time of mounting criticism of the way banks failed to prevent and in some cases actively helped criminals use their networks to launder money.
Standard Chartered was last month fined $300 million (£180 million) by officials in New York after problems were found with its surveillance systems that meant illegal payments could potentially be processed by the bank. Britain’s largest bank, HSBC, was fined nearly $2 billion in 2012 after US prosecutors uncovered evidence it had moved money for drug cartels and terrorists.
Mr Lebedev last night called for the creation of a new $70 million “sleuthing agency” to fight international corruption and to take on City firms that he said were too powerful to be dealt with by any one country.
“We have to punch through this inertia, to take the fight to the criminals and their well-paid, well-connected, silky smooth helpers,” he said.