Graham Barrow has worked to prevent money laundering and fraud for decades — in recent years working with journalists to investigate companies. In a guest post he shares his tips with Tony Jarne on what you can do when you are following the money.
Many times, as journalists, we need to investigate businesses to tell our stories. You need to track companies to know how Russia is avoiding the sanctions and who allegedly profited from PPE contracts during the pandemic.
But, how do we begin, and what are the details we need to look out for? To navigate the company’s world, Graham gives some advice when you are tracking the money.
Start with Companies House
Companies House is where all the businesses based in the UK need to be registered. It is fully transparent, open, and free. Check the basics of a company: who are the directors? Does the company have real activity? A website? If a company does not have a website, it is a red flag.
Be aware that Companies House do not check any description and has no mandate to do so. Graham’s Twitter account regularly publishes ridiculous examples of companies exploiting that: if Jesus Christ can be a company director, you know no checking is involved.
Parliament approved new legislation to improve corporate transparency and the accuracy of the register. It will not change Companies House directly, and it will not entirely protect it from bad actors, but Graham considers it a step in the right direction.
Look for a network of companies
“I do not think I have ever come to any criminal that thought: ‘We are going to create one company, and that is going to be how we will do all of their criminality’,” says Graham.
“Always think in a network of companies. Risk is not a data point; risk is always in networks. A single data point tells you nothing. You always have to contextualise it”.
When a company is set up, they have to provide specific information including a registered address, a director, the beneficial owner (who controls the company) and a statement of capital.
There are a lot of data points and textual information you can analyse to contextualise a group of companies. Some of the most important ones are:
1) Address. Businesses need to be located somewhere. Are there any other companies located in the same place? Which entities?
If you see a new company based in an address that has never been used and suddenly hosts three companies or more, that is a red flag.
It can be helpful to search an address in the Companies House advanced search option and check which other entities are based there.
2) Names. Are they similar to each other? Is there any pattern in the names?
Looking for patterns in the companies’ names can be helpful, too. Many of the names of UK Limited Liability Partnership companies alleged to funnel billions of pounds were created through an algorithm.
3) Time. When were companies registered? Were the companies registered on the same day? “People will register companies but will not think: ‘I will register one this morning. I am going to wait three hours, and then, I am going to register another,'” Graham says. “That is not how they work. They sit down at a computer and start registering companies.”
If you have access to a business register, companies have a registration number. Graham said: “I am always interested in looking at companies with registration numbers on either side”. At some point, they can be linked.
Look for the outliers
In the UK, the Standard Industry Classification (SIC) code describes what the company has been set up to do.
Graham found a group of companies with Chinese directors using three of these codes. One was for raising pigs or swine, the other was for processing nuclear fuel, and the last was for wholesaling pharmaceuticals.
He said: “In reality, there is no company in the world that has three businesses [where] ‘We raise pigs, we process nuclear fuel, and we are wholesalers of pharma’. It is just nonsense”.
You are looking for those companies that are outliers, but at the same time show a pattern.
Think like a criminal. How would you set up your network?
Imagine that you are setting up a network for an organised criminal gang. How are you going to do it? What are the things you must have? The one absolute requirement in the UK is that the company must have a UK registered address.
That means that there will be a concentration of companies in specific addresses because you need to be able to access the post.
If you do not want your name to appear on the company, you would also need trusted proxies to act for you. For practical reasons, you would not have hundreds of those, so you would get a few proxies for all the companies in the network.
This can cause situations as happened with Ali Moulaye, a proxy who signed the accounts of thousands of UK companies. Graham has a spreadsheet with more than 10,000 accounts signed by Moulaye for 7,000 different companies, many of whom were allegedly involved in several international money laundering networks (Moulaye denied wrongdoing).
And the opposite. If you were a business, is this how you would construct your company to maximise your profits? If it is complicated and expensive, the answer is no.
It is about how you look at the data. Try to look at it rationally and commercially and say, does it make sense? If the answer is no, there is another reason why it is like that.
How to track companies in off-shore jurisdictions
When trying to track companies outside the UK the first place to go would probably be Open Corporates, which gathers data from company registers around the world. An open public licence will be helpful because it gives you access to lots of data. You can also download CSV files and aggregate the data easily.
You can access an open public licence if you apply as a journalist, researcher or academic. In this guide, Bellingcat explain how to set up your account and use the Open Corporates API.
Other company databases, such as North Data, offer a free Premium Service for investigative journalists, which is especially useful for companies based in European countries.
For directors of companies registered in Panama, Cyprus or New Zealand you can look at Open Ownership, where you can find beneficial owners of companies from over 200 jurisdictions.
If you check names in other countries, you must understand how patronymics work in different parts of the world. The OCRRP wrote this article about it.
Another place where you can check companies and directors are the databases created with leaked documents such as the Panama Papers. OCCRP Aleph and the Off-shore Leaks database have plenty of information about companies based in tax havens and opaque jurisdictions.
There are several countries where you can access public documents updated online. For example, the court system in Russia is almost entirely public. Graham found several UK companies inside Russian court cases, and they almost always produce them in their proper spelling.
Google Advance Search Operators can be especially useful in narrowing down searches to particular types of documents, domains and languages, or specifying a range of words which might appear in close proximity.
Be patient. Sometimes, you cannot do anything because it is a black hole. In some situations an insider, whistleblower or leak is the only way to get the information needed.
Good sectors to investigate: cryptocurrencies, sales by internet and delivery services
Graham identifies several sectors that could provide good stories for investigative journalists:
Cryptocurrencies: recent investigations have detailed how several criminal organisations have used crypto to launder money and fraud. At the last Global Investigative Journalism Network (GIJN) conference, several experts gave tips about how journalists investigate cryptocurrencies.
Internet sales. The single most common SIC in Companies House is 47910: e-commerce and online retail.
Anything tradeable online will attract all sorts of criminals. Crooks can set up an eBay account and not actually ever sell anything: it simply generates paperwork to validate criminal funds moving through the system.
Delivery services. A lot of drugs and guns and all sorts of contraband are moved through parcels. Express delivery companies are often set up because they can be used to avoid suspicion and tracking.
Resources on following the money
If you want to know more about how to conduct financial investigations, there are several resources that you can use:
- The Dark Money Files podcast. Graham and his friend and partner, Ray Blake, have been shining a light on the murky world of financial crime for several years. The Danske Bank, Ali Moulaye and Laundromats chapters are especially recommended.
- Butler of the World and Money Land by Oliver Bullough are both recommended by Graham for anyone looking to understand financial crime. He also recommends:
- The Washing Machine: How Money Laundering and Terrorist Financing Soil Us by Nick Coan
- Treasure Islands: Tax Havens and the Men Who Stole the World by Nick Shaxson
- The Investigative Journalist’s Guide in Company Accounts by Raj Bairoliya is published by the CIJ and covers the basics of accounting for investigative journalists.
- The CIJ — as well as Finance Uncovered — also offer courses in financial investigations.
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