Mapping moneyland, where the powerful, rich and crooked make their billions disappear

WHEN is a bank not a bank? When it is a laundry and, as laundries go, Danske Bank in Estonia was quite something.

Resigning on Wednesday morning, ashen chief executive Thomas Borgen said: “We have not lived up to our responsibility in the case of possible money laundering in Estonia. I regret that deeply.”

The numbers are staggering, the torrent of money pouring out of this Baltic bank almost incomprehensible.

One branch with 15,000 customers not actually living in Estonia, 9.5 million payments between them, with their transactions totalling €200 billion. That’s £180 billion, give or take. Gone, vanished, disappeared into what Oliver Bullough calls Moneyland.

Bullough, an author and journalist, has spent years painstakingly mapping this parallel world, which mirrors our own but without borders, tax inspectors or police, a world where the dirty money, millions and billions, stolen by politicians, businessmen and gangsters – although the distinction is often blurred – is moved, stashed, cleansed and, eventually, spent.

Bullough was not shocked by the detail or the scale of the Danske Bank scandal as it unfolded last week. And, he will be surprised if there are not more scandals like it as money pours into the rabbit hole leading to Moneyland, where normal rules don’t apply.

On the same day the Danske bank scandal emerged last week, the former prime minister of Malaysia was arrested, accused of diverting £500m of state funds into his bank account. In Liberia, the son of the former president was banned from leaving the country as the whereabouts of a missing £80m is investigated.

Bullough said: “As technology advances, the pace quickens and the sums involved grow and grow.

“The money has disappeared, it is effectively invisible, dark matter, and can only be measured by its impact, where this money hits the real world, whether that is in the London property market or on our democratic systems.”

His new book, Moneyland: Why Thieves And Crooks Now Rule The World And How To Take It Back, traverses the globe following the money. From tiny islands in the Caribbean to the most prestigious addresses in Harley Street, his painstaking reporting follows the money, getting so far before the fog comes down, enveloping the resting place for the looted billions.

The money – possibly £15 trillion, possibly more – is, of course, hidden in a maze of off-shore tax havens and shell companies designed by the best accountants; behind brick wall corporate structures built by the most expensive lawyers; protected by the smallest, most venal administrations, and defended by the fiercest defamation lawyers.

The book begins as Bullough joins the wide-eyed crowds swarming through the former palace of the toppled Ukrainian president Viktor Yanukovych, whose corruption and greed earn him a place high in Moneyland’s roll of dishonour.

Yanukovych, now in exile in Russia, stole millions from his country with his embezzled wealth spirited away to be sunk into everything from a “medicine racket run out of Cyprus” to an “illegal arms trade traced back to Scotland.”

The arms deal was a spin-off from one of the now-notorious Scottish Limited Partnerships (SLPs), which became hugely popular for foreigners with dirty money to clean and those charged with doing the laundry. It is said just five people registered thousands of SLPs in 2016. One hundred of them are said to have helped launder up to $80bn out of Eastern Europe, the so-called Russian Laundromat.

Bullough said the sudden popularity of SLPs – more were registered in 2016 than in the previous century – shows how quickly those charged with hiding dirty money will exploit the smallest of loopholes.

“It was slightly unfair that Scotland gained this reputation as a haven for money launderers,” he said

“Basically, what made the Scottish Limited Partnerships so attractive to them came down to 13 words in a Victorian law but those words created a crevice which, when noticed and understood was forced open. The money crosses borders but laws don’t.”

Despite the scale of pillage, Bullough insists action can be taken to constrain Moneyland.

“It will be difficult but there are incremental gains to make. It will rest on cooperation between countries to make things more difficult, make more checks, ask more questions.

“Athletes say don’t be perfect, be better, and that is how the world must go about it. Small steps.”

The Great Vanishing Act: How the trick is done

“Some people call shell companies getaway cars for dodgy money, but – when combined with the modern financial system – they’re more like magical teleporter boxes. If you steal money, you no longer have to hide it in a safe where the mice can get at it. Instead, you stash it in your magic box, which spirits it away at the touch of a button, out of the country, to any destination you choose. It’s the financial equivalent of never feeling full no matter how much you eat…offshore means never having to say “when”.

“And the magic does not stop there. Once ownership of an asset (be that a house, or a jet, or a yacht, or a company) is obscured behind multiple corporate vehicles, hidden in multiple jurisdictions, it is almost impossible to discover. Even if the corrupt regime from which the insider profited collapses, as it did in Ukraine, it is difficult – if not impossible – to find his money, confiscate it and return it to the nation it was stolen from. The corrupt rulers have got so good at hiding their wealth that, essentially, once it’s stolen it’s gone.”