A North London man who set up an un-registered Money Service Business (MSB) and traded in designer clothes to launder more than £800,000 has been sentenced.
Shunjian Jiang, 28, from Colindale, bought high-end fashion items to order, before sending them to China. His customers paid in yuan – the Chinese currency. He used this money to act as an illegal MSB, advertising on online forums offering to exchange sterling to yuan for Chinese ex-pats in the UK.
He carried out the currency exchanges using a number of UK bank accounts and HM Revenue and Customs (HMRC) investigators found significant numbers of cash deposits and transactions on his bank records.
Jiang was arrested in August 2016, when his previous flat on the Isle of Dogs, East London, was searched. £50,000 worth of designer clothes ready for export to China were found and seized by officers. Southwark Crown Court heard that Jiang spent £465,000 on clothing.
Richard Mayer, Assistant Director, Fraud Investigation Service, HMRC, said:
“Jiang set himself up as an unofficial MSB and handled considerable sums of money to purchase a property and maintain his UK lifestyle. He also exploited the ‘grey’ market in China and its demand for genuine designer clothes to move money between the UK and China.
“People using unregistered MSBs should be aware these businesses can and are being used to launder money. HMRC is determined to crackdown on this type of criminal activity and I urge anyone with information about it to contact HMRC online or call our Fraud Hotline on 0800 788 887.”
HMRC investigators identified significant numbers of cash deposits between £1,000 and £6,000 being made into his accounts at various UK locations and found he was acting as an MSB, but had failed to register this activity with HMRC.
Jiang pleaded guilty at Southwark Crown Court to operating an un-registered MSB and on 12 July 2019, was sentenced to eight months of prison, suspended for 18 months at the same court and will have to do 160 hours of unpaid community work.
On sentencing, His Honour Judge Pegden said: “You acted as a money exchanger plainly in a business capacity. Very large sums of money came from China to the UK.
“Sterling, by hundreds of transactions, went into various accounts enabling you to purchase a property in north London.
“The money you exchanged became criminal property because the business was not registered and I sentence you solely on that basis.”
HMRC has started confiscation proceedings to recover the full amount of the funds illegally exchanged by Jiang.