Party Vibe

Drug gangs go to London’s diamond dealers for cash
Published by The Guardian – Monday 21 April, 2003

Copyright: The Guardian

Criminals are laundering their profits in new ways and Hatton Garden is braced for a flood of stolen gems

Millions of pounds in stolen diamonds are set to be ‘fenced’ through London’s Hatton Garden in the coming months as drug gangs from around the country increasingly turn to the gem trade in a bid to launder their cash.

Experts say diamonds are fast replacing more traditional methods of money laundering and that the trade is set to grow even more rapidly following the theft of £65 million worth of diamonds in Antwerp – the centre of world diamond trading – last month.

According to Hatton Garden jeweller Joel Grunberger, it is only a matter of time before the stolen gems begin to appear. ‘Some of the diamonds are certain to end up in London because Hatton Garden has a number of people whose history is not exactly squeaky clean.’

Grunberger was a consultant on the Guy Ritchie gangster film, Snatch, which begins with a diamond robbery on an Antwerp dealer. ‘Honest dealers work cheek-by-jowl with the villains. I don’t mean that they sell to the villains, but within the businesses there are unscrupulous people. Everyone knows the Brink’s-Mat gold haul came to Hatton Garden,’ he said.

The gem trade appeals to money launderers because, following the introduction of new banking regulations, it is one of the few remaining industries where large cash transactions can be carried out with complete anonymity. ‘It is all based on trust, so there is no paper trail,’ says money laundering expert Peter Lilley. ‘There is an environment of almost complete secrecy and it is a very cash-intensive marketplace. These are all things that money launderers find very attractive.

‘Another huge benefit is that diamonds are very easy to transport, much more so than gold. It is much easier to put a few thousand pounds’ in diamonds into a suitcase and take it across a border than it is to do the same thing with the cash equivalent.’

Lilley’s book on money laundering, Dirty Dealing, identifies both Antwerp and Hatton Garden as being extremely vulnerable to the attentions of organised crime.

The strength of the links between Hatton Garden and the underworld was first highlighted five years ago when diamond merchant Solly Nahome was gunned down outside his north London home. A professional hitman pumped four bullets into him before escaping on a waiting motorcycle. As well as having an office in Hatton Garden, Nahome was financial adviser to the notorious Adams family, a north London clan said to control a drugs and crime empire worth more than £100m.

Nahome was already known to the police as an international criminal specialising in fraud and money laundering. He was said to have met with members of the Adams family three or four times a week and arranged for £25m to be hidden in property deals and offshore accounts.

More recently, police have identified a drug smuggling ring operating among Jewish diamond traders working between Tel Aviv, Antwerp and Hatton Garden. A few weeks after Nahome was executed, a suspected Russian Mafia figure who had been arrested during a fraud investigation in Hatton Garden was shot dead in Antwerp.

Terrorists are also known to exploit the lack of security in the gem trade. Earlier this year it emerged that one of Osama bin Laden’s top lieutenants had visited Hatton Garden in the run-up to the 11 September attacks to raise funds for al-Qaeda.

London’s gemstone dealers buy large quantities of stones from Antwerp, where half the world’s diamonds are traded. The diamond district, a maze of tiny streets close to the train station, turns over more than £30 billion each year. It is one of the densest concentrations of valuables anywhere on Earth and, with dozens of CCTV cameras, 24-hour security guards and a dedicated police station, is considered one of the best-guarded districts in Belgium.

The robbery at the Diamond Centre, which took place over the course of a weekend three weeks ago, has been described by police as ‘a piece of genius in its simplicity’. The thieves managed to bypass highly sophisticated security systems to enter a vault containing 160 safety deposit boxes used by cutters and traders to store their wares. They forced open 123 of the boxes and ended up ankle-deep in a mass of diamonds, gold, jewellery, stocks, bonds and cash.

Although they stole huge quantities of valuables, they were simply unable to carry it all and had to leave masses behind. When police cleared out what remained in the vault it filled 17 large bin liners. Conservative estimates say the haul was worth at least £65m, but the true amount will never be known because many of the owners of the safety deposit boxes will not come forward.

‘The reason many people have safety deposit boxes is because they don’t want to declare what they have, which makes it harder for the police to trace the stolen goods,’ said Grunburger.

Although police have made four arrests, they have yet to recover a single gemstone.

http://www.guardian.co.uk/