Scottish proceeds of crime investigators are targeting gangsters who hide their dirty money in cryptocurrencies.
A senior government lawyer - the official responsible for chasing the ill-gotten gains of organised criminals - has confirmed “live cases” are underway.
Anne-Louise House, who heads the elite but low-profile Civil Recovery Unit (CRU), declined to give any details of actions being taken.
But her revelation suggests criminals cannot be sure their loot will be safe if they try to store it or crypto.
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Asked if her team had chased crypto, Ms House told The Herald: “There are live cases but I wound not want to say anything particularly about that.”
“There are cases that involve crypto. The crypto then gets off ramped in to fiat currency. There may be cases where we are following the money and there is crypto in that chain.
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“So to be clear we are not saying we are freezing crypto. But that we are investigating cases where there is a crypto element.”
This is an important point.
The UK government under its new economic crime bill is looking to develop legal tools for authorities to freeze various accounts or wallets containing crypto-currencies. The CRU, through the Scottish Government, is understood to have offered advice on this legislation.
So the CRU cannot freeze crypto but it can investigate those who use such currencies, especially when funds are changed to sterling.
Organised criminals have long turned away from fiat currency - the money issued by states like pounds, dollars or euros - to hold their wealth. Ms House stressed her team frequently went after high-value items that are used by criminals to store wealth, such as luxury watches or jewellery or gold shavings.
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As she explained in The Herald’s long read on Saturday, the primary mission of the CRU is to harry organised crime groups or OCGs, asking hard questions of “clean skins” or patsies who hold dirty money or assets to behalf of gangsters.
Ms House explained: “The powers of the POCA act give us an opportunity to disrupt operations of OCGs through the investigation and removal of assets.
“That includes assets which are strategically placed in names of others, which is something that we quite often come across, when somebody holding property is used as a front for an OCG.
“In our view, removing assets helps destabilise OCGs by removing fund flows and puts pressure on OCGs not currently subject to proactive criminal investigations.”
This is the key point. CRU operates under civil law, where the burden of proof is lower, as the “balance of probabilities”, not “beyond reasonable doubt”.
That means it can get to criminals that police and prosecutors might not be able to touch. The unit can act against people who have not been found guilty in a criminal court.
Ms House stressed that some of the valuable items her unit targets, such as jewellery, can have sentimental value. The CRU, which is marking its 20th anniversary, increasingly front-loads its investigations, carrying out detailed accountancy probes. That means it can enter in to early negotiations with people holding unexplained wealth. Targets often settle out of court, not least if it allows them to argue some of their wealth, perhaps represented by items such as jewellery, cam be argued to be legitimate on the balance of probabilities.
A senior government lawyer has confirmed there are live cases where lawyers for the elite but low-profile Civil Recovery Uni are not revealing details of their operations.
However, the revelations comes as the Westminster govt looks to beef up powers for police, prosecutors and govt lawyers to chase ill-gotten gains hidden in crypto.
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