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Saturday, Feb 22, 2025

One of the world's 'dodgiest addresses', in leafy Herts, UK

One of the world's 'dodgiest addresses', in leafy Herts, UK

Leaked banking documents have given a glimpse into international money-laundering. They show that it happens in some unlikely places.

No one answers the door when you press the buzzer for suite 2B on the second floor of 175 Darkes Lane.

It is a red brick building, just off the High Street in the Hertfordshire commuter town of Potters Bar.

And suite 2B is the official home of more than 1,000 UK-registered companies. Many were set up to move billions of dollars' worth of ill-gotten gains around the globe in such a way as to make them near-impossible to trace.

The firms are part of what has been described as a "global money-laundering conveyor belt". Criminals' money passes through a labyrinthine network of tax havens and bank accounts en route from being "dirty" to "clean". It ends up in financial centres such as New York, where the crooks can spend it without fear of prosecution.

The banks make money from the transactions and often not enough questions are asked about who owns and runs the companies, or where the money has come from.

On Friday, the UK government announced reforms designed to clamp down on this type of fraud and money laundering.

'Suspicious activity'


A leak of more than 2,000 "suspicious activity reports" sent by banks to the US Financial Crimes Enforcement Network (FinCEN) names more than 100 companies registered to suite 2B. Unbeknown to the shoppers frequenting the nearby Superdrug or buying a pasty at Greggs, the room is a virtual thoroughfare for international financial crime.

The US Treasury, which houses FinCEN, believes it is one of the dodgiest addresses in the world.

"If I were in charge of money laundering [detection] at a UK bank, all systems would be instructed that we do not process any payments to or from companies registered at that address," said financial crime consultant Martin Woods.

The way the schemes work is intentionally complex. Criminals in Russia and other countries who want to launder their money take advantage of limited partnerships (LPs) and limited-liability partnerships (LLPs). These are UK companies, used perfectly legitimately by thousands of businesses, that require the owners to file very limited information about their operations.

Criminals can use them to move large amounts of money anonymously.

They pay "formation agents" as little as £50 to register the LPs and LLPs with Companies House, where all UK firms are registered on their behalf. Doing so gives a UK address through which to move their money - such as suite 2B, floor two, 175 Darkes Lane.

But LPs and LLPs can be managed from abroad, with the criminals' details very difficult to detect. Often information given about the person setting up the company is not checked, so criminals can hide behind false names and aliases.

Using businesses registered in the UK helps legitimise the money on its way to being "clean".

Accounts inconsistencies


LPs and LLPs have hugely multiplied in number. In 2004 there were 20,000 in the UK. By 2017 there were 100,000.

Two of the firms registered at suite 2B were Ergoinvest and Chadborg Trade. Both had accounts with Danske Bank in Estonia, which was involved in one of the world's biggest money-laundering scandals between 2005 and 2017. Ergoinvest and Chadborg Trade reported identical income of just £21,353 for one year. They also reported the same figures as each other for operating expenses and profit.

These were fictitious figures. The difference between these accounts and reality is revealed in documents seen by the BBC's Panorama, showing that $700m (£535m) went through Ergoinvest and $2.6bn (£1.99bn) went through Chadborg.

Aleksej Strukov, who runs suite 2B, said he had no access to companies' financial records and could not verify the information filed with Companies House.

"Our only role is the provision of the Darkes Lane address as their nominated registered office address, and in doing so, ensure we comply with the AML [anti-money laundering] regulations for that service," he said.

Mr Strukov also said he conducted standard due diligence checks to verify the identities of company directors, shareholders and beneficial owners.

'High-risk'


What happens in suite 2B is just one particularly large-scale example of the part the UK plays in global money laundering.

A total of 3,282 British companies were named in the leaked suspicious activity reports - that's more than any other country in the world. And the flood of dirty money is damaging the UK's international reputation. A leaked US Treasury report describes Britain as a "higher-risk jurisdiction" and compares it to notorious financial centres "such as Cyprus" in its role.

Banks around the world are supposed to ask the "source of funds" handled by them. But in recent years, they have been criticised for not doing so properly and governments, their resources stretched, have struggled to detect wrongdoing.

"Money-laundering schemes are put together to make that difficult," said Graham Barrow, author of Dark Money. "Money launderers know this, and complexity is their friend.

"If it's gone through 17 bank accounts before you see it, it's hard [to track]. And that's what they do: they have multiple companies in multiple countries with multiple accounts and move the money backwards and forwards between them."

The United Nations estimates the annual value of international money laundering to be between $800bn (£607bn) and $1trillion (£760bn). That is between 2% and 5% of everything produced in every economy in the world.

Facing these revelations last week, the UK announced reforms to Companies House. Under the plans, directors will not be able to be appointed until their identity has been verified. Companies House will also be given greater powers to query, investigate and remove false information, with the aim of increasing the reliability of the data showing who is behind each company.

The changes will give "law enforcement and the private sector more accurate information to crack down on dirty money and financial exploitation", said Security Minister James Brokenshire. In 2018, the UK government promised to bring in stronger controls over registering LPs and to give officials powers to ask for more information while they are operating.

But the use of these companies in money laundering is "vanishingly difficult to investigate", said Mr Barrow.

And much of it happens in places like suite 2B in leafy Potters Bar.



The FinCen Files is a leak of secret documents which reveal how major banks have allowed criminals to move dirty money around the world. They also show how the UK is often the weak link in the financial system and how London is awash with Russian cash.

The files were obtained by BuzzFeed News which shared them with the International Consortium of Investigative Journalists (ICIJ) and 400 journalists around the world. Panorama has led research for the BBC.

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