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WHY IS LONDON A TOP CHOICE FOR FRAUDSTERS?

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The concept of karma says you reap what you sow. In other words, all your actions and the choices you make accumulate in the wheel of fortune to decide what your fate will be. Children are often brought up with tales of karma and divine justice in order to inculcate in them the values that are required to be a good human being. Most religions also prescribe a similar version of the concept as guidelines to living by or a code of conduct to subscribe to.

Unfortunately, the lives of several white-collar criminals serve as a direct contradiction to this golden rule. We can all agree unanimously that murderers and terrorists are the most despicable of the human race and deserve to burn in hell for all eternity. However, white-collar criminals represent a more grey area, where it can be argued that their crimes are not as grave in the spectrum of all criminal offences. These crimes can also be justified as an accounting error, much like counting cards in blackjack or trading with insider information. It is only according to concrete rules set down by the government that their actions can be classified as illegal.

Of course, we can argue that criminals can only escape justice for so long, and once the system catches up to them, they have to pay their dues with interest. The cycle turns and equilibrium is once again restored. The smarter criminals, however, have found ways around this problem. Using complicated maze-like methods that take the best minds to unravel, intelligent white-collar criminals often get away with the spoils of war.

Take, for example, Vijay Mallya, Nirav Modi and Lalit Modi. These three white-collar criminals cheated the Indian economy out of a few hundred thousand crores. Yet, they are not lamenting in some high-security prison. On the contrary, they are still living as large as they used to, maybe even more. The only difference that they have had to adjust to is the fact that they now reside in the United Kingdom. 

Is this really a punishment?

Let us take a closer look at the quality of life they are currently enjoying in order to be able to form a well-informed and unbiased decision.

Vijay Mallya’s life in exile

Vijay Mallya, the founder of Kingfisher Airlines and the former chairman of United Breweries, fled from India in 2016, after failing to repay an amount of Rs. 9,000 crores which were loaned to his company by a consortium of 17 Indian banks. He failed to appear before the court on multiple occasions after being summoned by the Enforcement Directorate, on account of the several charges of money laundering which he currently faces. He has even been placed on the Most Wanted List because of the impressive list of crimes he has committed. Essentially, he has cheated the Indian economy out of millions.

Vijay

Surprisingly, fate has not caught up with him. He is not spending his days repenting his actions behind the bars of a high-security prison somewhere in India. Instead, he is living it up large in his London townhouse which overlooks Regent Park. Mallya reportedly purchased this villa for an astounding 11.5 million pounds.

That, my dear friends, is 11.5 million pounds of the Indian taxpayers’ money.

In spite of India’s repeated demands that the UK government turn him over, Mallya is still reportedly absent from his judgement day.

Is this fair?

Lalit Modi and his Belgravia townhouse

IPL founder Lalit Modi fled to London in 2010, after being charged on several counts of financial impropriety. He is accused of money laundering, nepotism and the acceptance of illegal payments from numerous sources during his stint at the Board of Cricket Control in India. The Enforcement Directorate has been trying to get him to face the court and take responsibility for the few thousand crores that he has taken from the Indian economy using underhand means.

Lalit

However, much like Vijay Mallya, Lalit Modi to is far from penance. He is ensconced in a mansion in Belgravia, the most exquisite and most expensive residential neighbourhood in London. The mansion is over five storeys high and covers an impressive 7,000 square feet. It has fourteen rooms and an inbuilt elevator inside. Modi pays an approximate amount of Rs. 20 lakhs per month as rent for this house.

Can you imagine living under such horrific conditions?

Life of the billionaire jeweller in exile

London is also home to one of the biggest fraudsters in the recent past, Nirav Modi. The diamantaire is accused of a $2 billion fraud case against Punjab National Bank, the biggest scam in Indian banking history. He is also charged with $4.2 million lawsuits in Los Angeles, California. He fled to the United Kingdom in 2018 and has been hiding there ever since.

nirav

Of course, like his contemporaries, Nirav Modi too does exile in style. He is currently residing in an apartment in a luxury skyscraper near Oxford Street, at the West End of London. This property has been valued at over 8 million pounds. In fact, he has reportedly opened up a diamond business of his own in Soho, very close to his residence.

The list goes on, dear friends.

Recently, the former Yes Bank chairman Rana Kapoor too tried to follow in the footsteps of these flamboyant fraudsters, and make way for London with his family. Unfortunately, his plans were thwarted at the last moment.

The United Kingdom is a top choice for such fraudsters around the world as its legal system priorities human rights over all else and is very forgiving of past crimes. In fact, since 2013, over 5,500 Indians have applied for refugee status in the UK. This system of fraudsters escaping judgement by fleeing to London is not restricted to India. Similar criminals from the United States and Russia have also fled to London in the past.

Of course, Russia is quite different from other democratic countries in the sense that they are a lot more trigger happy than others. The Russian way of punishing such absconders is with a bullet to the head in the dead of the night. They have inculcated a reputation as cold and heartless for a reason. They truly believe that the only way to enforce a decision is by imbibing people with a fear of retribution. Two of the fraudsters who escaped to London after cheating the Russian government were reportedly found dead in their apartments. 

Why is the UK such a favourite destination?

Reverting back to the main question, why do fraudsters choose London to escape to?

Why is it such a favourite destination?

Well, the UK is very forgiving of past crimes, provided you come bearing gifts, namely, money.

According to British laws, refugees and absconders can stay on in the UK as businessmen, provided they invest at least 200,000 pounds in the British economy. This investment can take any form, from the purchase of real estate to invest in shares. 

Quite convenient, isn’t it?

It is indeed.

There are several reasons why the UK is favoured by fraudsters. One of the main reasons is the UK’s strong human rights laws.

The United Kingdom is a signatory to the European Convention on Human Rights. Formed in the aftermath of the second world war, it allows the UK to extend its protection to anyone that it deems falls into the risk of human rights violation. The right to life, right to liberty, freedom from torture, freedom of expression, among others, were very important in light of the massacre laid down by the Nazi Reich and the plight of the European Jews. 

However, the UK courts currently use these conventions to delay extradition requests from other countries. In other words, if the UK decides that a person is in the risk of facing torture or the death penalty, or if the extradition is for political reasons, it will extend its umbrella of protection to that person and delay, or even deny the extradition.

Accordingly, the UK provides facilities and easy refuge to foreigners, especially those who come with a lot of money. According to British laws, if you invest 2 million pounds in the British economy, you will be granted a golden visa which allows you to reside in the country.

Other countries which aid criminals:

In fact, the UK is not the only one. Other countries too, resort to such schemes in order to bring money to their economy. 

One of the best examples of the same in Switzerland. Apart from exquisite views, cheese and chocolates, the Swiss are known all over the world for their banking laws. Swiss bank accounts grant the highest levels of privacy in comparison to most other countries. Not only that, but the banking regulations also followed in Switzerland ensure very low levels of financial risk. Switzerland can be thought of as a black hole for black money. The deposits that they hold are shrouded in secrecy and protected from all kinds of financial crisis and conflict.

london

As a result, Switzerland is a favourite destination for most millionaires and large businessmen around the world.

Another such example is Mauritius. 

The tiny and picturesque African island is known as being a tax haven. Because of this reason, it is a favourite destination, not just for honeymooners, but businessmen looking to launder black money. All they need to do is register a virtual business with black money in Mauritius, and pay a negligible tax of about 1%. The money is then transferred back to India as a legitimate inflow of foreign investment. 

In fact, 39% of the foreign money invested in India is through Mauritius. This has become such a favourite method of laundering black money and evading taxes that it has been dubbed as the “Mauritius route”.

Thus we see that there are several countries out there which are just waiting to lend a hand to criminals in order to aid them in their quest to evade justice.

In the last few years, India has requested the United Kingdom to turn over 131 of the fraudsters who are currently residing there. Citing human rights and other issues, the UK has so far agreed to the extradition of less than 1%.

The UK does not react to all countries in the same way, though. When the United States wanted to extradite 130 of their criminals who were hiding in the UK, 120 of them were turned over. This is perhaps owing to a combination of the right amount of threats and the right level of pressure. 

India is still yet to crack into the ideal combination of request and threat in our extradition requests. Hopefully, we are learning and will fare better in the future in regard to bringing these criminals home to face the music.

Stay tuned for more.

Happy investing!

author

Adrija