The travel visa cash cow

One of the professional highlights of 2020: an investigation I wrote based on whistleblower testimony and other exclusive information, exposing how VFS, the company hired by the British government to process all of the visa applications from people coming into the U.K., has placed itself in a brazen conflict of interest.

Not content with the bilions in revenue it was already turning over on behalf of governments worldwide, VFS opened a spinoff company called VDash, which for an extra fee offered to do exactly what VFS was supposed to do, but better. This is an obvious incentive for VFS to do a poor job in order to stter more clients to Vdash.

The problem is made worse by the fact that the performance of VFS is already far from satisfactory, according to people who have used it. Nightmare tales abound — overcharging, lost passports, missed deadlines and lives turned upside down as a result of the incompetence of this company. Because it is the sole provider of visa services to the U.K. (and many other goverments worldwide) VFS has a monopoly on this activity, and even if some people were able and willing to pay to go through Vdash, VFS woud still be the ultimate gatekeeper of their paperwork.

When approached with the evidence last summer, the Home Office did not have much to comment, although experts said that the contract VFS signed should prohibit Vdash from operating the way it is advertised.

Read the full story on UK visa firm accused of government contract breach over sister company; VFS Global is the market leader in handling visa applications for governments, and operates on behalf of 64 countries.

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High streets and low roads

Two stories which in hindsight are the highlights of my past six months at POLITICO:

  • Money laundering on the high street looks at how cash transfer and foreign exchange shops in London have become a haven for drugs money and gang activity. These shops are not as tightly-regulated as other financial companies, and they provide a lifeline for many of people around the world who depend on the income of their relatives and friends in the UK. According to police sources, organized crime gangs have infiltrated the sector, meaning that already put-upon communities are now being drawn, often unwittingly, into elaborate money laundering schemes. The state (National Crime Agency, Met Police, financial regulators and the government) is aware of the problem and trying to solve it, representatives said, but the situation is complex — an overstretched public sector and criminal justice system, decentralised financial regulation enforcement, loopholes, overlapping guidelines, and vested corporate interests preventing progress.
  • Digging into the Remainers’ dirty secret: for this story I went undercover with the BBC to find out how migrant labourers are exploited in the largely unregulated home improvement sector. Hundreds of small construction companies provide cheap home extensions for London’s socially climbing middle classes, but what you don’t see in the glossy real estate brochures are the horrendous risks workers take for jobs that are paid by the day, cash in hand, below minimum wage, and often without safety gear, health insurance or even basics such as a working toilet. Local authorities are rarely visiting these sites to verify compliance with the few rules that do exist, so ruthless gangmasters and building contractors operate with impunity. This, in my view, is the dark side of EU membership, and I don’t think it was a coincidence that the exploitation of workers is at its worst in the city which is considered the stronghold of the Remain campaign in the EU referendum. I don’t mean to re-litigate Brexit or to imply that exploitation will necessarily diminish after withdrawal, but the fact remains: EU free movement led millions of poor people to seek fortune in the West, where they continue to be ill-used while the authorities and the hypothecated bourgeoisie pretend they don’t exist.
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One year at POLITICO

It is one year today since I joined POLITICO Europe as finance reporter covering (mainly) the U.K.

Much of the time I type blurbs in the newsletter or short alerts about financial regulations and the occasional fine or penalty issued by the FCA or the Bank of England. But a great thing about POLITICO is that its area of coverage is broad enough for you to also write features about entirely unconnected subjects such as Moldovan politics, Romanian astrologers or allegations of corruption in Cyprus. Here are some of the stories I most enjoyed writing in the last 12 months, in no particular order, and which you can read for free:

-> Activist financier targets Cyprus over Russian dirty cash

-> Moldova’s new PM sets pro-Western course

-> For political guidance, Romanians look to the stars

-> How a footloose fintech firm did its Brexit ‘jurisdiction shopping’

-> Romania’s populists turn fire on central bank chief

-> MEPs help campaign of Moldovan convicted in $1B fraud

-> Troubled Latvian bank’s owner seeks time to recapitalize

And here are some of the articles I wrote for subscribers only, on POLITICO Pro:

-> London finance at crossroads in landmark election

-> FCA: UK may adjust finance rules depending on EU market access

-> EU regulators fret over share-trading restrictions after Brexit

-> Next Bank of England leader faces toxic politics and much more

-> Libra will need banks for key functions, co-creator says

-> International financial crime task force investigates Latvia’s ABLV

-> EU needs ‘attractive’ rules, not Brexit scraps, French watchdog says

-> London groups plan market trader qualification as Brexit nears

-> EU investors warn they could move to London … because of Brexit

-> UK finance regulator gears up monitoring for no-deal Brexit

-> City fears legal backlog will mean Brexit Wild West

…looking back, the Pro coverage seems rather fixated on Brexit. Here’s hoping politicians (and voters) allow us to broaden our horizons a bit in the new year.

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The old lady and the pitbull

I met the loveliest old lady yesterday who, seemingly unaware it had been illegal since 1991, told me she recently had a “110 pound pitbull who used to sleep in my bed when I let him. The dog was sweet but very anxious and alert and I’d never leave him alone with my child so it didn’t maul him.”

Presumably she meant the dog mauling the child, not the other way round.

In any case, she said she tried to warn people not to approach the dog when she took it out on walks, “but people are just stupid. They think all dogs are harmless.” These walks tended to be short, because of the people, not because of the dog, she told me.

The dog also “made the most terrible uproar when someone rang the doorbell. He had a most peculiar bark, and a subtle but throaty growl that would chill anyone right to the bone. But that was part of the point.”

The world interfered with the old lady’s love for her pitbull.

“Eventually I had to take him to a behavioural therapist but that didn’t do any good.”

I didn’t get the impression the dog was with us today and by then someone else barged into the conversation so it was too late to ask.

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Lootin’ with Putin: my (small) contribution to a special report in Private Eye

It was a privilege to make a small contribution to this six-page special report in Private Eye magazine, exposing the UK firms without which the malignant post-Soviet oligarchy would have been unable to gain the power it has today. Featured are lawyers, bankers, accountants, public relations and real estate agents — all eminently respectable, even, for some, admirable people — yet enablers who have for years been feeding at the same trough of blood money from the collapsing communist empire.

In the words of Richard Brooks, who was the author of the report, these “pukka professionals” are now exposed. Read it all here on the website of Private Eye magazine.

For me it was all the more wonderful to take part in this story because although I’ve been writing in Private Eye since 2013, it was the first time I had a byline — Private Eye doesn’t usually do bylines.

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Deutsche Bank’s ‘undocumented’ deal with rogue bank to keep dirty money flowing

After the S&P Global Market Intelligence news service published my three-part series into rogue Cypriot bank FBME’s activities, we received more confidential documents from sources keen to expose the depth of the abuses that took place at this firm. And some of those documents revealed that top German bank and one of the world’s most important lenders — Deutsche Bank — had cut a secret deal with FBME to process anonymous money transfers from its clients — including some who had links with financing the Syrian chemical weapons program, the Russian mafia, fraud, forgery and corruption. The arrangement, which lasted several years and breached international regulations, only came to light because during my research I obtained notes taken by lawyers hired by FBME to contain the bank’s legal problems.

Read the full exclusive for free by clicking here.

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My new (and first) novel

If you would like to know more about my new novel, Country Gumption, which is also unpublished and my first, please click here.

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FBME Cyprus: the global criminal’s bank of choice

S&P Global Market Intelligence, the financial newswire where I work as a reporter, recently published my investigative series into FBME, the now closed rogue Cypriot bank linked to the Russian mafia, Syrian war crimes, fraud, money laundering, corrupt offshore finance & other illegalities.  The newswire is usually available only to subscribers, but these stories are free to read.

Part one shows how, thanks to FBME’s brazen rulebreaking, Russian gangsters who robbed the state (in what became known as the Magnitsky case) channelled their dirty money into Syrian tyrant Bashar Al-Assad’s banned weapons program:

Part two exposes the variegated bunch of crooks and politically-connected businesspeople that took advantage of FBME’s dodgy services, as well as a number of moody schemes in which the bank’s owners were involved directly:

The third part looks into what exactly went wrong in the bank’s compliance department, allowing money laundering, fraud and sanctions evasion to take place for years… This one is for those who care about financial procedures known as AML (anti-money laundering) and KYC (know your customer):

S&P Global Market Intelligence is one of the only six publications that obtained the ream of confidential audits, internal reports and witness statements which revealed the extent of the wrongdoing at this bank. The others are Asia Sentinel, Cyprus Mail, Buzzfeed UK, CNN and The Daily Beast.

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The Wapping Mole discovers likely Romanian prostitution ring

The Wapping Mole, a lively blog running journalistic investigations and general interest news about the Wapping neighbourhood of Tower Hamlets, London, has discovered what appears to be a Romanian sex trafficking gang operating on the quaint cobblestoned streets it patrols.

The Mole duly ran an investigative series about it — complete with candid pictures — and shortly afterwards the police and local council followed up and are now said to be monitoring the situation.

I made a slight contribution to the Mole’s work in the form of a few comments about how Romanian human trafficking gangs generally work. They are a much bigger problem in Italy, Spain and France but it seems the UK is not immune.

Read all about it here:

Beyond antisocial behaviour, which is a nuisance of course, the police should make sure that there is no modern slavery or other organised crime going on around the activity of these escorts. Trust the Mole to keep chasing the story.

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Moldova’s other choice

Maia Sandu could be living proof that Moldovans don’t necessarily have to choose between handing their lives over to either oligarchs or communists.

A plane with the name of the country written across it. Creative commons license, Pieter van Marion, Flickr[dot] com

A plane with the name of the country written across it. Creative commons license,
Pieter van Marion, Flickr[dot] com

Much has changed for the better in Moldova in recent months — there is a new governor of the central bank after a much-publicized series of frauds which nearly bankrupted the government, a new interpretation of the constitution allows people to directly elect the president after about 15 years of only electing members of parliament, and a new voice championing reform, human rights, liberal democracy and the rule of law emerged from the chaos of winter: Maia Sandu, the former education minister.

Sources with inside knowledge of Maia Sandu’s fledgling political organization tell me she is going to formally register a new centrist political party some time in late April. They have so far signed up 6,000 members (population of Moldova: 3.5 million) and created six or seven regional offices. More are on the way. Chicanery from the current oligarch-controlled government is expected during the process of making the party eligible for elections, one source says.

To learn who Sandu is and what she wants, please read on.

Continue reading

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