To think this sounds like money laundering?

[Beetleback]

There’s a takeaway shop on our high street that is constantly being refurbished. It occasionally opens for a few weeks or months, then closes again for a long, elaborate refurbishment. This has happened maybe four times in the last few years.

There’s a lot of muttering locally about money laundering, but I really don’t understand how that would work? Can anyone explain it to me?

Private hire taxi drivers, I worked for HMRC when Tax Credits were first introduced. I worked in the Enquiry Centre where customers could come to get help if their money hadn't arrived & saw so many taxi drivers that claimed to work 40 hours a week but only earned £10k, they were walking out with cheques that were more than I earned in a month. They take cash, pick up fares illegally & don't include them in their takings. There are so many ways businesses can cream money off their takings & now places like HMRC have reduced their staff to the bone, the chances of getting caught are minimal.

You are correct. Don't assume the police/authorities have the slightest interest in challenging any of it.

Out of curiosity I checked out the owners on companies house.

One Turkish director of a company which also owns/leases various local restaurants. Also the sole director of a building contractor and sole director of a building materials firm. So they could be contracting their own companies for all these refurbs.

Ha, yes. Almost certainly.

We say the same about the Turkish barbers round us!
There's a small town near me, small town centre, six Turkish barbers! Always empty of customers, with just one (or occasionally two) guys sitting looking bored!
I always think the same of the hand carwash places. They seem to change hands regularly, have loads of staff, but probably don't make £100 a day. How are you paying those 8 guys you have?

They’re not paying them - it’s modern slavery

Interesting... I guess that would just make it more easier to do on a bigger scale. Restaurant closes for 'refurbishment'. Could then produce invoices for materials and labour, which all go through accounts and get paid, but in reality very little actually happens. So if had £100k in dubious cash that was difficult to bank or account for, could be used to 'pay' for refurb, and come out the other side with maybe £80/90k of much more legitimate looking money in a bank with a paper trail behind it that can be spent how you wish without suspicion.

Not sure. But it may be that a food business for example would look suspect if it had no outgoings.

For example, if you had a fried chicken shop, you could take the cash and launder it, but an investigator taking a look at the accounts might ask the question where are the incoming purchases (chicken?). I don't know whether a refurb would be hidden in cost of sales and therefore appear as an expense instead of the chicken, allowing the books to stand up better to scrutiny.

There may also be an issue that they are moving the "refurbs" from shop to shop, so they take it out of one shop, only to put it in another as "new" even though it is actually second hand. Meanwhile the shop pays full price for the refurb. You could actually even move the "refurb" backwards and forwards between two shops charging full price for the refit each time.

It is of course a disgrace that nothing is being done about this sort of stuff.

We had a sandwich shop near us - no one in their right mind would buy anything there as the food was awful - basically just the cheapest stuff bought from a budget supermarket thrown together by staff who clearly didn't want to be there! It was the kind of place you'd go in once! But the two owners (brothers) were running top of the range sportscars, even though it barely had any customers!

It lasted a few years until HMRC/Police closed it down and arrested the owners for money laundering (from drugs). I think they both got around 5 years in prison for millions in money laundering according to what was reported about the court case.

@GasPanic

It is of course a disgrace that nothing is being done about this sort of stuff.

The closure of local tax offices is the disgrace. I'm an accountant, and have been for 40 years, just coming up to retirement. When I started in the 80's, local tax offices had inspectors who'd go around "checking the books" of the businesses in their town, mostly VAT inspections, but also Payroll/PAYE inspections. They'd not usually find much, and often were criticised as "Jobsworths" when they only found small amounts of undeclared tax (which is why they were scrapped), but in reality, they were a really good preventative measure as businesses knew the chances of a physical inspection every few years was very high, so would be cautious and meant they paid more attention to decent book-keeping etc. Local inspectors also kept an eye on their "watch", i.e. for new businesses starting up, which businesses looked busy, etc., and could use that local knowledge when it came to reviewing accounts/tax returns as submitted.

All that's gone. Now just a few huge "contact centres" where staff have no local knowledge, and most businesses won't have had any kind of "inspection" for the last 20 years, so are no longer afraid of the taxman coming!

We are in east london, waltham forest, our high st now has appx 7 cafes and 6 barbers....its all albanian mafia...all reported and witnessed...cases of money being counted out back, constant refurbs...now have a massive crack issue in the area....witnesses have reported dealers from the albanian cafes meeting other dealers in alleys etc...the turkish barbers are usually albanians pretending to be turkish....what is funny is most of them are all empty and cannot cut hair at all as a friend went into one and left when realised barber was clueless..!!..the albanian mafia is nasty and has taken over high streets all over the uk...they need to be deported as mostly here illegally on fake passports etc.

albanian mafia pretending to be turkish...we have the same here, have posted in this thread....all over london now.

"I'm not saying she is but she is more than likely tax dodging than laundering, as machines are easy to get hold of these days"

Tax dodging is a form of money laundering.

yes, albanian mafia !!

@GasPanic

For example, if you had a fried chicken shop, you could take the cash and launder it, but an investigator taking a look at the accounts might ask the question where are the incoming purchases (chicken?). I don't know whether a refurb would be hidden in cost of sales and therefore appear as an expense instead of the chicken, allowing the books to stand up better to scrutiny.

What happens in reality is that in such a scenario, they buy lots and lots of chicken, "sell" some of it legitimately, but throw away most of it. By pretending to have sold it all, they can put a lot of dirty cash through the till as chicken sales. The sales to purchases margins/percentages look OK, as the till shows the right amount of takings for the right amount of chicken bought, so the accounts/tax returns look right. A big "giveaway" as to what they're doing is to look at the costs of their waste disposal - higher than normal numbers of collections is a good sign (though lots will just fly tip it!). Another giveaway is where they're not too bright and don't buy a matching amount of polystyrene trays to match the amount of chicken they claim to sell (HMRC routinely check the amount of Poly trays to check for too many (pocketing cash sales) or too few (money laundering through not selling as much as the takings show).

Any high profit product (i.e. food takeaway) or service (hairdresser, nail bar, tattoo bar, etc) can work that way. The bigger the gap between buying what they sell and the sale price the better.

Paying for refurbs is actually the icing on the cake, as the newly "cleaned" money can be paid on to friends/family "pretending" to do the refurb, to reduce the profits of the money laundering chicken takeaway so they pay less tax. The "cleaned" money is funnelled to others for usually overpriced or unnecessary construction work. In reality, the owners of the construction firm are probably "uncles" of the chicken shop owner, so monies are just being redistributed around the family which is pretty normal in some ethnic minority extended families as they tend to look out for each other rather than borrowing loans etc and there's usually lots of "loans" pinging around between generations and linked/extended families.

Interesting post - love the detail about the packaging!

Igf you have to go to that amount of effort though to clean the money…are not just as well off running a legit business?

I guess that make the likes of barbers and nail salons attractive for laundering as there’s less product involved? Easier to claim you’ve cut 100s of heads of hair than sold 100s of boxes of chicken.

It's depressing how widespread and obvious this is without the government caring less.

Igf you have to go to that amount of effort though to clean the money…are not just as well off running a legit business?
Drugs is much more profitable especially when combined with other criminal income sources, like theft, extortion, slavery etc.

bad that's why the dumped chickens pop up on the litter picking sites every so often.

But to clean the money through a legit-looking business, don't you need to end up with vaguely plausible profit margins?

"What happens in reality is that in such a scenario, they buy lots and lots of chicken, "sell" some of it legitimately, but throw away most of it."

My guess is they also probably sell it on to mobile food vans, which are much harder to track down and tax.

If you think HMRC are bad, you'll love some of the horror stories coming out of the DWP. Claims being processed without the requirement to provide supporting documentation? What could go wrong with that approach?

There’s ways to do that. Diversifying, for example - washing the money through more than one (cash dominated) based business.

also, putting the money through successful ‘legit’ businesses which already turn over high profits. For example:
https://www.hardens.com/uk-london/11-05-2017/mayfair-restaurant-boss-arrested/

https://www.theolivepress.es/spain-news/2019/10/31/hugely-popular-luxury-restaurant-busted-for-money-laundering-for-drug-traffickers-as-e650000-seized-in-dramatic-raid-in-spains-andalucia/amp/

Some businesses used won’t actually be owned by those making the money, but the owners will agree to launder in exchange for a percentage cut.

Indeed. The ones where I lived would be referred to as Turkish, and often claimed to be, but they weren’t. 9/10 were Albanian Kosovars.

It’s an easy mistake for people to make if they’re not familiar with the between the languages and dialects tbf.

You're not in West Yorks are. I've already said money laundering in relation to the one I'm thinking about. Opens for a few months, closes for refurbishment then opens under a new name. Menu generally the same except for a few amendments when it Greek they had mousses but got taken off when it was Turkish and now it's a Mediterranean grill. Despite the several months of refurbishment very little changes and the staff pretty much stay the same. Clearly something not right and money laundering seems the answer.