Over a year ago, I reported here on a police raid on three private safety deposit vaults in London.
In a meticulously orchestrated operation, more than 300 heavily armed police simultaneously raided the vaults, all owned by Safe Deposit Centres Ltd. Subsequently, police arrested two of the South-African born owners of the company on suspicion of money laundering and related charges.
Police confiscated the contents of more than 3,500 safety deposit boxes and claimed that more than 90% of them contained criminal assets. Indeed, police linked the box-holders to organized crime syndicates dealing in drugs, child pornography, human trafficking, prostitution, and the catchall crime of money laundering.
I thought it might be interesting to go back a year later and find out just how many of these boxes actually contained "criminal assets." Keep in mind this phrase has a very expansive meaning—it naturally includes obviously illegal items such as narcotics, but could also encompass, e.g., untaxed currency.
At the time of the raid, London police said each of the more than 3,500 boxes would be treated as "a crime scene in its own right." For 90% of the boxes to contain criminal assets, as police claimed, 3,150 of them would need to be linked to crime. For 10%, police would have needed to find evidence of criminal wrongdoing in 350 boxes. And for a mere 1%, 35 boxes would need to contain "criminal assets."
Well, in this case, police have brought a grand total of 11 prosecutions against the owners of assets out of the more than 3,500 boxes raided (about 0.3%)—although another 700 box-holders are under investigation for tax evasion. And guess what? Numerous innocent box-holders, upon having their belongings returned, have discovered that items—cash in particular—is missing.
One elderly box-holder survived the Nazi Holocaust, and kept several thousand pounds in the heavily guarded Safe Deposit Centre in case his family needed to flee their home once again. I suspect he may already be making plans to leave England. If I were in his shoes, I certainly would.
This incident illustrates several important lessons that I described a year ago, but will repeat here.
- Never trust media reports of sensational crimes when busting the wrongdoers involves the wholesale violation of privacy rights. In this case, the media simply repeated the lurid accusations of the police, without asking critical questions such as, "Where's the evidence?"
- You can forget about any cash you keep in a safety deposit box. If police don't steal it, they'll use sniffer dogs to identify drug residues on the cash. Tainted cash is presumed to represent the proceeds of drug trafficking. It doesn't matter that drug residues are present on more than 95% of circulating currency.
- Precious metals or jewelry might be a little safer if you can produce an invoice that police can tie to a specific bar, coin, or item of jewelry. But, if you've simply stored away gold coins that you purchased with cash, without an invoice, you can kiss them goodbye.
- Don’t forget that the main outcome of the London raid was an investigation of 700 box-holders for tax evasion. If there's even a scintilla of evidence that you purchased valuables found in your box with untaxed funds, you can probably kiss them goodbye. And, you can look forward to a tax investigation.
- If you keep important papers in your safety deposit box, police and tax authorities will copy them before you receive them back. If those papers show evidence of anything illegal—or untaxed income—once again, you can look forward to an investigation.
- Based on the bounty confiscated by London police in this operation, you can count on many more of them, and not just in England. Safety deposit boxes anywhere in the world are at risk.
- Remove your valuables and store them in a floor safe in your home. If the vault is in a foreign country, and it's not practical to relocate your valuables to your home, make certain that you can prove beyond a reasonable doubt that you legally own every item in the box. You should have a receipt describing the property in detail, along with a record of how you paid for it. Ideally, you should also have records proving that you used legally earned, after tax funds to pay for the items in the box.
- Don't delay. The "success" of the London operation, and the fawning media attention accompanying it, will surely spur similar efforts in other countries. Time is not on your side.
Copyright © 2009 by Mark Nestmann
