AN EXPERT in financial crime branded Britain’s attempts to combat money laundering as “pathetic” as he disclosed that just £46 million of the £250 billion laundered through the UK had ever been recovered.

Mike Adlem, who trained with the fraud squad before embarking on a 15-year career investigating financial crime and advising banks, estimates that the cost of recovering that £46 million was more than £400 million.

He called for an overhaul of the way Britain is dealing with money laundering.

Mr Adlem, who spent two years tracking down Holocaust assets in Switzerland and has helped Nationwide Building Society to comply with money laundering regulations, said the UK’s attempts to curb the problem were “pretty pathetic”, with the recovery of just 0.02 per cent of cash laundered over the past ten years.

He said: “We have got lost in the ten years since anti-money laundering regulations were introduced. We are achieving nothing and we need to stop and completely rethink things.

“The banks are wasting millions of pounds to comply with the Financial Services Authority, but the reality is that this is little more than box ticking.

“The burden on banks to comply with regulations needs to be reduced and replaced by a more effective way of identifying organised criminals.”

The National Criminal Intelligence Service (NCIS) needs to share much more intelligence with the banks to help them to focus on those customers who presented a genuine risk, said Mr Adlem, UK managing director of Protiviti, a risk management consultancy formed from the ashes of Arthur Andersen. The initiative needs to be led by the Government, he added.

Banks conceded that the checks they run on new customers have become onerous.

Yesterday, the Joint Money Laundering Steering Group, which represents the financial services industry, announced proposals to relax the checks, which would include the need to produce just one document, rather than several, to prove identity.

David Swanney, a director of the British Bankers’ Association and the author of the proposals, said: “The one-size-fits-all approach is not the most costeffective way. We do need to be targeted and to cause the least inconvenience to the low-risk customers.”

A spokeswoman for the Financial Services Authority said: “We are in the early stages of working with the NCIS to share intelligence and will look to develop this further.”

Some of the UK’s biggest banks have spent well over £20 million to satisfy the Financial Services Authority’s rules which seek to pinpoint inadequate controls in their systems that allowed scope for money laundering.

Most of the money has been spent on sophisticated software to spot unusual transactions, as well as on additional staff — who can number more than 100 at the biggest banks — to process the information.

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