‘American-style candy stores are the frontline’: money laundering expert warns high streets being hollowed out by criminal fronts
“American-style candy stores are the frontline in the fight against international money laundering,” a leading financial crime expert has warned, as new figures reveal more than 2,700 high street businesses were raided last month in the biggest operation of its kind.
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Marit Rødevand, founder and CEO of anti-money laundering firm Strise, said communities across the country can see how their high streets have changed, even as suspected criminal operations continue to thrive in plain sight.
“Anyone who spends even a short amount of time on their local high street will see how it’s changed and how fraudulent businesses have thrived,” she said.
“We’re fascinated as to how we can all know that something is wrong but that nothing is done about it.”
Her warning comes as the National Crime Agency confirms that 924 arrests were made and more than £10.7 million seized during a month-long series of raids in October, targeting cash-heavy premises allegedly used to clean criminal profits from drugs, fraud, trafficking and other organised crime.
The raids formed the second stage of Operation Machinize, a UK-wide effort launched earlier this year after investigators concluded the scale of cash laundering had reached a tipping point.
Around £12 billion in criminal cash is believed to be washed through the UK every year.
A total of 2,734 businesses were raided, including barber shops, minimarts, takeaways, vape stores, nail bars, sweet shops and so-called American-style candy stores.
Some areas, including Essex and Doncaster, have seen the number of barber shops rise by as much as 200 percent in five years, a pattern investigators say reflects the rapid expansion of fronts for illicit finance.
Read more: Counterfeit crackdown as thousands of businesses raided in bid to ‘clean up Britain’s high streets’
Read more: Britain’s high streets are being laundered clean – one candy store at a time
Rødevand said poor oversight at Companies House had made it far too easy for criminal groups to set up shell companies with little scrutiny. “It allowed fraudsters to join up names like ‘Santa Claus’, ‘Tooth Fairy’ and ‘Darth Vader’,” she said. “Company data needs to be verified better and enforcement needs to have more of a bite.”
She added that tell-tale signs of suspicious activity, including high cash turnover in low-footfall shops, frequent changes of ownership and inconsistent declared income, should be more widely recognised. “Improving transaction monitoring and bettering public awareness could make these patterns far easier to detect.”
Money laundering, Rødevand stressed, is far from a distant white-collar problem. “These businesses allegedly engage in tax evasion, exploitation of vulnerable people and the selling of stolen or illegal goods. They enable and encourage the phone theft epidemic that has been so rampant in the UK. Money laundering is the support network that allows criminals to make a business out of fraud, scamming, theft and drug-dealing.”
Officials say the raids show how deeply some criminal operations have embedded themselves in local economies.
Sal Melki, the NCA’s deputy director for illicit finance, said many of the targeted shops were acting as “hubs for a range of poly-criminality”, including hiding drugs, laundering cash and serving as meeting points for criminal associates.
One of the most significant breakthroughs came in West Yorkshire, where officers disrupted an alleged crime gang accused of using a jewellers to run an investment fraud and launder profits. More than £2 million in assets were seized, including gold bars, 30 luxury watches and a £500,000 ring.
A solicitor linked to the case is alleged to have authorised payments of £800,000 while owning a £1 million house with no mortgage.
Rachael Herbert, director of the National Economic Crime Centre, said crippling criminal profits was an essential deterrent. “Depriving criminals of their source of income has a real impact, limiting the amount of funds they can reinvest in further offending and deterring them from taking spaces on our high street that could be used by legitimate businesses.”
Security minister Dan Jarvis said high street front shops were undermining communities. “Criminals are using these dodgy shops as fronts for serious organised crime, money laundering and illegal working, risking the future of the British high street,” he said.
The government said the next phase of Operation Machinize will continue into 2025, with hundreds more suspect companies now under scrutiny.