Money laundering
Illegal money disguised as legitimate through complex transfers and purchases
Money laundering is when money that has been gained as a result of a criminal/ illegal activity such as drugs, terrorism, or fraud, is then “washed” and made to look clean, as if it has come from a legitimate source. Usually, the money is layered and transferred quickly through different bank accounts so it is not obvious where it originated from, or used to purchase luxury items or property.
When money is paid to the Council and has originated as a result of a criminal offence this is money laundering. The Council, businesses and organisations have a legal duty to complete thorough due diligence checks to make sure any money received has not come from a criminal source. This will include making enquiries about information supplied on application forms where relevant, and looking at bank statements that support purchase and claims.
Examples of money laundering:
- A drug dealer using money obtained from selling drugs to pay their social housing rent arrears
- A son or daughter deceiving a parent and selling their house without their knowledge (due to having dementia for example) and using the proceeds to put down a deposit for a right to buy application for a council house
- Using money made from rent payments from subletting social housing to go on luxury holidays
