There are over 4.2 million company entities registered at Companies House in the UK. Hundreds of thousands of companies are newly incorporated or dissolved in the UK every few months. In amongst those companies, there are thousands that look perfectly normal based on surface level scrutiny.
But they’re not.
Look beyond the vanilla company name, 2 directors and accounts filing date and you find background information, connections and transactions that should demand further investigation from any credible financial services risk team.
Missed red flags
And yet many such companies are missed by financial services firms because of the complexities and time involved in carrying out detailed investigations. Many continue to remain active and the obvious danger is that some of them are the front for serious financial crime.
Cardvox LLP is one such company that presents the kind of indicators that should trigger an investigation.
It was registered at Companies House in 2006 on behalf of 2 legal entities. Those entities are based in the British Virgin Islands. On incorporation, their registered company address in the UK was a townhouse at an Earls Court address in London where 581 other companies are also registered.
Over the few years following incorporation, Cardvox filed several sets of exemption-based accounts that simply recognise low levels of paid commission (£10,000-£30,000). There have been changes to registered address, accounts signatory and designated members and they have a named PSC who is based at an address in a small and rather unkempt back street in a suburb on the outskirts of Moscow.
Financial services teams lacking resource and expertise
The Cardvox insights continue much deeper to include overseas connections, anonymised addresses, non-accounted transactions and familiar signatories. These kinds of traits would jump out to an experienced risk analyst, but many financial services firms simply don’t have enough expertise to cover the volume and complexity of entity-based cases being presented even in respect of their direct customers. But what about customers who are receiving payments from such potentially suspect organisations? Or those who are banking with other overseas banks that use correspondent services of bigger, UK based banks?
Data is great… if you can analyse it
Companies House data is difficult to analyse. It is disparate and poorly organised. And yet it is full of data and insight that is invaluable when coupled with other data sources such as those appearing on the European Business Register, OpenCorporates or even UK council supplier registration databases. The analysis of any such wide ranging data takes time and expertise to produce any notable flags. And that’s before we even consider the detailed stages that can only by carried out by a human eye; such as signatory checks on uploaded PDF accounts documents.
Cardvox LLP was identified by Caspian Entity Investigator following analysis of Companies House and other data sources. Whilst it is not in any way asserted that Cardvox LLP is a bad actor, it demonstrates that with the use of technology, sufficient red flags can be alerted that should cause financial institutions to investigate further.
The solution is part of the Caspian Financial Investigation Platform that replicates the cognitive approach and traits of expert analysts to investigate and identify red flags. It will interrogate multiple complex entity data sources in seconds to provide explained risk-based recommendations that can be fully mitigated or passed to analysts and investigators for further interrogation.
To learn more about Cardvox LLP, our Head of Financial Crime Division, Graham Barrow has written an investigative article – Cardvox LLP – A history of incongruous connections.