How British Merchants 'Perfected' Money Laundering

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#business #History #money

Written By: Sam

Video Created By:
Svibe Multimedia Studio
Editor: Cardan
Media Gatherer: Andrea Rivas

Footage Courtesy of: Getty Images

Music Provided By: Epidemic Sound

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‘Money laundering’ wasn’t coined as a term until the 1970s, when the Watergate scandal hit. Since then, the phrase has become a household word, while the crime itself remains a familiar hallmark of criminal enterprises.

During the 1990s, the Bank of New York helped Russia launder capital flight when the USSR broke up.

HSBC was fined almost $2 billion for cleaning the money of drug traffickers, terrorists, and rogue nations like Iran.

Al-Qaeda’s financial operations in the run-up to 9/11 couldn’t have happened without the help of the United Arab Emirates Dubai Islamic Bank. Allegedly…

Even Fortnite isn’t safe.

After some hackers stole lists of credit card details, they bought in-game currency to sell for real cash.

But money laundering isn’t relegated to secret boardroom meetings in flashy skyscrapers.

Take the US candy shops in London.

Over the last ten years, a suspicious amount of American sweet shops have popped up across the capital, including Oxford Street.

As one of the world's busiest streets, the rent here is extremely high. Shops like TopShop, Nike, and Uniqlo have to work hard to cover costs.

Yet similar-looking chains of deserted US candy importers can somehow afford multiple shops throughout the one-and-a-half-mile street.

They even operated during the Covid lockdown when other shops struggled to stay open.

Perhaps to nobody’s surprise police raids have uncovered a staggering amount of illegal goods and cash.

One derelict shop was fronting up to £55,000 worth of illicit goods, including counterfeit chocolate bars.

But where did this all start?

How did we get to a world where money laundering is so commonplace that even average citizens treat it like a joke?

-- Sources --

[georg]

Two points around taxes that are often mentioned in the video:
1) Income tax in Britain was introduced in1799, so avoiding it wasn’t required for the first 200 years of the East India Company
2) Money laundering is explicitly targeted at bringing illicit money into the cycle and taxing it. You did explain that but then ended up mixing up money laundering (= making illicit money look legit) and tax evasion (= pulling money from the legitimate cycle)

[JaagUthaHaivaan]

The Chinese may have been running their laundering shenanigans for a time longer than anyone else, but the name hawala itself is of Indian origin. This informal system of money transfer is actually still used in some parts of India, especially among diamond traders.

Unrelated fun fact: Robert Clive had a giant tortoise pet, given to him as a gift after the Battle of Plassey. That tortoise outlasted the British empire. It died in 2006, believed to be 255 years old then. This chap Clive truly lived his life king size.

[jamescustodio]

The Art Galleries and auctions today are the modern version of Pitt's method.

[MbisonBalrog]

Money laundering is not tax avoidance/evasion. It is making cash flow seem like come from legit sources. Then whether or not you want avoid or evade taxes after is another matter. You launder money from illicit gains like drug smuggling

[edwinmuchiri]

"If they could jail Alcapone, They sure as hell can get you. Steps 1. Placement. 2. Layering 3. Intergaration" Did you just quote Saul Goodman to Jesse Pinkman?

[brendanwiley]

As an American who watches the Lotus Eaters, it is noticeable that the American candy shops are mentioned and not the Turkish barbors.

[mariodejesus]

I might be missing something and if I am maybe clarifying it would help, but you keep talking about "tax free" as if that is the intention for laundering money, but I always thought it was actually to make it look like real income, pay tax on it and then whats left you are free to spend as you want because it's now legitimate money, so if you go buy the super car and someone asks where the money comes from you have proof. The is tax free until you launder it, but is extremely difficult to spend on anything substantial due to the paper trail on big ticket items. So criminals are happy to pay the tax on the laundered money to then have free use.

[briandrake]

He who controls the spice, controls the - Baron Harkonnen

[unusualhistorian]

Great video, but Denmarks East India Company 4:41? I know it was a simple error, just wanted to make sure it was known.

[shaahidulislam]

Under Bangladesh's past PM Sheikh Hasina, nearly 100 billion USD was laundered from one of the poorer economies of the world.

[loupnuit]

It's always the sketchy looking mattress shops by me, as well as vape shops that carry products no one seems to buy.

[Sohave]

10% of the viewers: This is horrible, how can we stop it.
5% of the viewers: This might help me understand things as I move up in the ranks of the criminal organisation I work for.
The remaining 85% of the viewers: Is there something in this I can use this to dodge tax with my legitimate business.

[danielhale]

Okay now I know how to launder money. Step 2 is to... get money. Rats, I knew there was a catch!

[YoYo-gtiq]

The intro is more than 5 minutes but totally worth listening to. Thanks for making it interesting and entertaining

[jablue]

Love the topic, but the music is way too loud compared to the voice.

[bayridge]

It was the Dutch, not the Danes, that competed with the East India Company.

[akc]

Hawala system is a medieval South Asian system and not an ancient Chinese system.

[craigrmeyer]

Turn down the music and re-release this. Don’t punish us for trying to watch your video.

[little_laughs_family]

Hawala is an Arabic/Urdu word, it literally means, "reference". Another meaning of this is handover.

[oakstrong]

A common knowledge is that England, and London especially is the capital of money laundering, if we talk about the number of countries involved. Yet, it is not blacklisted like SE Asia is (for a good reason, though) from where I couldn't get even a small online payment accepted.