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SOCA Annual Report 2008-09

SERIOUS OGANISED CRIME AGENCY News Release issued by COI News Distribution Service on 13 May 2009

The Serious Organised Crime Agency today published its annual report for the year 2008-09.

The highlights this year include:

* £175m assets denied to UK criminals through a combination of cash seizure, cash forfeiture, civil recovery, restraint orders, and confiscation orders

* £88m assets denied to criminals overseas

* A conviction rate in the courts of 93%

* 71 alerts issued to industry to enable business to protect itself more effectively against potential crime

* Increased use of 'lifetime management' tools, including 16 new Financial Reporting Orders, 12 exclusion orders to prevent overseas criminals returning to the UK, and 13 Serious Crime Prevention Orders

* Over 85 tonnes of cocaine seized

* New forensic evidence on the drop in street level purity of cocaine

The case studies on the following pages provide a snapshot of the range and impact, breadth and complexity of SOCA's work over the past year.

Notes to Editors

SOCA is an intelligence-led agency formed in April 2006 to tackle Class A drugs and organised immigration crime as top priorities. Other priorities are fraud against individuals and the private sector, high tech crime, counterfeiting, firearms, serious robbery and recovery of the proceeds of crime.

SOCA is an Executive Non-Departmental Public Body sponsored by, but operationally independent from, the Home Office.

E-Crime

SOCA led the UK end of a long-term FBI undercover operation against the online criminal forum DarkMarket. Before the forum was closed down in October 2008, it had been regarded as one of the most significant internet sites dedicated to the theft and sale of compromised personal information. It dealt in large quantities of stolen payment card and online banking data, and the tools and techniques needed for criminals to commit offences using them.

Alongside two SOCA operations against DarkMarket subjects, SOCA provided intelligence and forensic support in this work to the City of London, Greater Manchester, South Yorkshire and Humberside Police.

Follow up work continued, and to date nearly 60 suspects had been arrested in Turkey, Germany, the US and the UK, of whom 12 were arrested here. Behind these headlines, coordinated international operations saved $70 million in potential losses. As part of that effort, SOCA had so far recovered over 16,000 compromised cards, with forensic work still underway.

Adewale Taiwo, a Nigerian national known as "fredbb" in DarkMarket, was arrested by Humberside Police and sentenced to five years imprisonment for conspiracy to defraud at Hull Crown Court. He admitted to causing £600,000 of fraud although £240,000 had been successfully frozen by the banking sector. "fredbb" will be deported on completion of his sentence.

Mass Market Fraud

The Office of Fair Trading estimates that UK victims lose around £3.5 billion every year to Mass Marketing Fraud (MMF) - the fake lotteries, dating scams and advance fee frauds which rely on contacting and tricking a mass audience via the post, internet or telephone.

SOCA worked with partners during the year to develop a co-ordinated national and international strategy to disrupt and dismantle the crime groups responsible for these despicable crimes. In conjunction with the Office of Fair Trading, and in consultation with over 40 public and private sector stakeholders, a strategy for the UK to tackle the harm caused was prepared. Given the global nature of the crime, an international working group, chaired jointly by SOCA and the US Department of Justice, was established. This group not only increased international understanding of the threat posed but also encouraged innovation in tackling it, on which significant progress in the year ahead is anticipated.

One strand of related SOCA activity aimed to reduce the estimated £340 million lost every year by victims in the UK to criminal frauds originating in West Africa. To this end a strong partnership was formed with the Nigerian Economic and Financial Crimes Commission (EFCC). The EFCC were thus an active member of the international working group and partners with the UK in a project to target the communication infrastructure criminals use to make and maintain contact with victims. A subsequent successful programme to intercept fraudulent mail in Lagos resulted in Nigerian criminals being displaced to other West African countries, where SOCA and local law enforcement pursued them. SOCA's main contribution was to provide intelligence and tools to assist the authorities identify and prosecute offenders.

Finally, following the interdiction of over 20,000 mass market fraud responses, the arrest of the UK group member and the disruption in a neighbouring European country of the gang who had been propagating the scams, SOCA intended, as a means of forewarning victims, to return their money with a letter to all those who had been tricked into responding. This exercise was in final preparation at the end of the year.

Cocaine - Upstream

Two men who masterminded an attempt to smuggle hundreds of kilos of cocaine into the UK were sentenced in September 2008 to 18 and 28 years imprisonment. In an elaborate concealment, Paul Clough and Paul Stromberg had hidden 337 kilos of almost pure cocaine within the fibreglass hull of a boat which was due to be shipped from Venezuela to the UK. Its street value here would have been around £40 million.

SOCA intelligence about their plans was passed to the Venezuelan authorities, who X-rayed the boat while it was still in a Puerto Cabello warehouse and seized the drugs. The UK masterminds were subsequently arrested here by SOCA and prosecuted.

Alison Saunders, Director of the CPS Organised Crime Division commented: "The charge of conspiracy to commit an offence outside the United Kingdom is rarely used in this country other than in terrorism cases and reflected an innovative approach to this type of criminality."

Cocaine in the UK

An investigation by SOCA led to the arrest and conviction of a senior supervisor in a major courier company. Andrew Burns had been attempting to pass packages containing cocaine to organised crime groups, using legitimate company names as a front.

A parcel containing 35 kilos of cocaine was intercepted at Gatwick and was substituted in order to effect a controlled delivery.

Burns was found guilty on 9 September 2008 for his part in the importation and was sentenced to 8 years imprisonment. However an Unduly Lenient Sentence application was heard in February 2009. Lady Justice Hallett found that the manager's role was essential to the commission of the offence and increased his sentence to 14 years.

Cocaine - A New Route Disrupted

SOCA responded to increased activity of Colombian drug traffickers seeking new routes into Europe.

A successful operation with the authorities in Sierra Leone led to the extended disruption of cocaine flights from South America to West Africa. In summer 2008, SOCA intelligence prompted the seizure of over 600 kilos of cocaine when a light aircraft was detained at Sierra Leone's main international airport. Sierra Leone Police made the seizure following close collaborative work between a Sierra Leone intelligence unit and SOCA. The crew of the light aircraft, together with members of a Colombian organised crime group who had based their drug trafficking operations in Sierra Leone, were detained attempting to flee over the border to Guinea. Fifteen people were charged in December 2008 and are now serving prison sentences.

At the request of the local authorities, a team of SOCA officers was deployed to Freetown to help the Sierra Leone Police with the collection of forensic evidence, its investigation and its presentation in court. In addition, SOCA's Forensic Science Group assisted with the examination of technical equipment, fingerprints and drug samples in the UK. This was the first major drug case the Sierra Leone police had ever investigated and was a notable success for them as well as for SOCA.

Innovation in forensic drug analysis

A SOCA initiative, known as Project Endorse, began in October 2008 to subject to full forensic examination all UK seizures of heroin, cocaine (including crack) and amphetamine above 25g.

This was the first time that the comprehensive testing of UK drug seizures had been attempted and the project was supported by all UK law enforcement agencies and forensic providers. It examined and compared physical appearance, chemical profiles and chemical composition (the latter showing all the significant materials added to the drugs since their production) and recorded the details in a searchable database.

The results were of direct operational value, identifying links between over 170 law enforcement seizures that were not otherwise known to be connected. They also provided factual information about the current nature of the UK drugs markets, showing:

* that contrary to the widely held view that heroin is not normally adulterated ('cut') in the UK, cutting with paracetamol was common-place, especially at the wholesale level;
* that the purity of street-level cocaine was typically less than 20%, and in some cases as low as 5%, raising questions about its alleged ready availability;
* that crack was heavily adulterated, most commonly with phenacetin, a known carcinogen; and
* that the purity of most street-level amphetamine was below 5% and sometimes as low as 1%.

As well as assisting SOCA and other UK agencies, the results were shared with international partners via Europol to support SOCA's operational efforts upstream.

Human Trafficking

During a lengthy joint operation with Lithuanian Police to investigate a group involved in the trafficking of women to the UK from Lithuania for sexual exploitation, SOCA officers escorted a serving prisoner to Lithuania in May 2008 under powers in Section 74 of SOCPA. The prisoner - an Albanian national - agreed to travel to Lithuania to give evidence in the trials of two individuals responsible for supplying the women to traffickers.

This unusual intervention proved particularly successful. It resulted in extensive press interest in Lithuania which provided a warning to those young women who might be tricked into travelling with the traffickers and led to a SOCA officer being commended at a ceremony in Vilnius. More importantly, it led to six trafficking groups being identified in the UK, intelligence being passed to police colleagues, the arrest and conviction of 18 individuals here, who received a total of 145 years imprisonment, and to the rescue of a further 16 victims.

Finally, the Lithuanian Police announced that, as a result of the new UK powers being publicised widely in Lithuania, there had been no new reported cases there of trafficking women to the UK.

Sharing intelligence

SOCA's international network of Liaison Officers (SLOs) worked closely with authorities in countries all over the world.

The SLOs in Barbados and St Lucia played a key role in developing and evaluating intelligence which led to action in April 2008 against property linked to the major regional drug trafficker Antonio Gellizeau, who was suspected of having been involved in importing bulk quantities of cocaine from Venezuela to the Grenadines and then selling it to the numerous air courier networks targeting the UK, European and US markets. The St Vincent & Grenadine and Bermudian authorities carried out a co-ordinated strike against the yachts 'Jo Tobin' and 'Orion' in Bequia island as well as several properties on St Vincent linked to Gellizeau. An estimated $1.76 million in cash was found in a well constructed deep concealment on the yacht 'Jo Tobin'. The yacht's crew, Winston Robinson and Kent Andrews, were subsequently charged with money laundering offences.

This ground-breaking operation was the first of its kind in the region. It involved the use of multiple police, Coast Guard and military assets supporting the St Vincent Financial Intelligence Unit (FIU) investigators, as well as the use of the Regional Security System Maritime Patrol Aircraft.

Both SOCA and the regional UK Security Advisory Team were integrally involved in mentoring the planning and execution of the operation, as well as the lengthy investigation by the St Vincent FIU. This resulted in Antonio Gellizeau being arrested on 19 December 2008 and charged with the illegal importation and concealment of the cash seized.

Denying criminals their profits

A helicopter, a luxury villa and a Bentley were among the assets recovered by SOCA in civil proceedings against a businessman in County Armagh. Other assets recovered under the consent order, granted by the High Court, included the contents of a number of bank accounts, residential and commercial property, prestige cars including a Humvee and personalised number plates and a caravan. In all, assets with a minimum value of £3m were involved.

In its civil recovery application, SOCA had submitted that Mark Niall McKinney and his wife Beverley had derived the majority of their assets through illegal activities including money laundering and fraud. SOCA also alleged that Mr McKinney, who owns MMK International Transport, was involved in illegal trading and income tax and VAT evasion.

A 21st Century Bank Robbery

A European crime gang attempted to pull off the biggest bank theft the UK had ever seen. It was an audacious and sophisticated attempted theft of more than £229 million from Sumitomo Matsui Banking Corporation in London.

Through an insider, members of the gang gained access to the bank's computer network. They completed 21 electronic "Swift" money transfer applications to move the money to a number of recipient accounts based in Turkey, the United Arab Emirates, Israel, Hong Kong and Singapore. Due to a mistake in the messages the transactions were unsuccessful and no money was transferred.

SOCA used its technical expertise and international reach to investigate. A complex web of companies and accounts had been set up globally to launder the money. The insider and two other members of the gang were identified through circulation across Europe of the bank's CCTV footage. Three people were extradited to the UK under European Arrest Warrants from Belgium and Spain. Further investigative work resulted in the identification of the supporting money laundering cell.

The gang was sentenced in March 2009. Approximately £1.5 million in assets was restrained and will be the subject of further action under the Proceeds of Crime Act. The investigation by SOCA's E-Crime department was praised by the Judge, who said it had been an "outstanding, professional, first class investigation all round."

Heroin

The US Drugs Enforcement Agency praised the assistance of SOCA in a joint operation which saw the arrest in October 2008 of Haji Juma Khan, suspected of being a major Afghanistan-based heroin trafficker.

Khan was arrested by the authorities in Indonesia and deported to the US the following day. He was charged in a New York court with conspiracy to distribute narcotics with intent to support a terrorist organisation.

Intelligence suggested his organisation had been responsible for supplying significant quantities of heroin from Afghanistan to Europe and the UK over a number of years and providing funding and support to the Taliban in Afghanistan.

Another major blow to the heroin trade was dealt early in February 2009, when an Afghan Unit mentored by SOCA arrested the leader of a narcotic trafficking network in Farah Province. The Afghan Unit, supported by the military, conducted a series of raids against the networks of Haji Abdullah and his associates and detained several of its key members. Abdullah himself was arrested at Herat Airport attempting to leave the country.

On 31 March 2009 at the Central Primary Court in Kabul, members of the network were convicted in the first such case to be brought before the nascent Afghan judicial system. SOCA's mentoring of the in-country unit was a critical part of achieving an Afghan-led outcome.

Firearms

SOCA worked closely with Greater Manchester Police to investigate the importation of illegal firearms from Eastern Europe and their distribution within the UK.

The operation recovered a total of 21 illegal weapons including handguns, rifles and a sawn off shotgun, together with over 7,000 rounds of ammunition. Quantities of illegal drugs and cash were also seized.

As well as resulting in prison sentences for those involved, the investigation delivered a wealth of intelligence on the movement of illicit firearms and on threats to cause injury or kill. This was shared with law enforcement partners, and resulted in arrests by both West Yorkshire and Greater Manchester Police, with significant impacts on the gang culture in each area.