Kevin Slack prosecutes £6 million money laundering conspiracy

February 5, 2020

Kevin Slack from Exchange Chambers has successfully prosecuted a man for conspiring to money launder and for offences of fraud after parallel FBI and British police inquiries.

At Caernarfon Crown Court, Michael Kinane, 41, of Porthmadog, Gwynedd, was sentenced to seven years and eight months in prison.

The case was referred to North Wales Police last November by the UK’s national reporting centre for fraud, Action Fraud.

The crime, known as business email compromise (BEC) fraud, targeted two companies, one based in the UK and one in the USA, resulting in a loss of $7.8m. The crime is believed to have been one of the largest BEC frauds in US corporate history and the largest by value in the last decade

The email systems of London-based pharmaceutical research company Avillion were infiltrated, enabling the conspirators to learn of an imminent investment into the business by a US investor.

A fake email account was created in the name of the Financial Controller of the UK company and emails from that account were sent to the US investor, requesting the investment funds to be paid into two new accounts – one of which was Kinane’s.

On 2 November 2018, the US investor unwittingly transferred $7.8 million into Kinane’s US dollar foreign currency account newly opened with NatWest.

Between 2 November and 5 November 2018, these funds were moved out of Kinane’s account to various third party accounts in Poland, Germany, Hong Kong, China and Malaysia as well as to a second foreign currency account recently opened by Kinane.

Judge Nicola Jones said she accepted he had not orchestrated the scheme, but was motivated by “greed”.

Kinane also purchased three high-value cars over a 2-day period via fraudulent credit agreements.

A proportion of the laundered funds were transferred to a separate account in the name of a company that Kinane had incorporated earlier that year.

Identified as Magic Lily Ltd, it was alleged to have operated from his home address in Porthmadog.

Police inquiries identified that the company existed, but did not have any stock, did not trade and did not file accounts or pay corporation tax.

Kinane was arrested on 8 August 2019 as he got off a plane from Turkey at Gatwick Airport.

The 13-month investigation has resulted in the recovery and return of £1.2m ($1.6m) to the victim.