The Latest

DRUGS, MONEY LAUNDERING, AND HUGE REVENUE FRAUD – THE DARK SIDE TO COMMERCIAL WASTE – PART 2

Commercial Waste Fraud

ISG Investigatons fly tipping

When you think about commercial waste fraud what picture does it evoke? A few skip loads of rubbish dumped on some waste land? Maybe your fridge ending up somewhere you didn’t expect? No big deal, no one is being hurt right?

But this façade often masks the murky world that lies behind it. Money laundering, drug trafficking and modern slavery often have close links to those involved in commercial waste fraud.

In our last blog, we explored the shady links between fly tipping and larger crime. Commercial waste fraud has become a key component for organised crime in the UK, and it’s easy to see why.

Illegal commercial waste costs the UK over £1 billion every year. But it’s rarely caught. No wonder it’s become such a pillar of OCGs operations. It’s the perfect crime.

Incredibly un-sexy, barely reported (unlike the shiny billion-pound-drug-haul-off-the-coast news pieces) and easy to hide behind legitimate companies. And if you needed any more proof of this, in 2017 there were over 4,000 Organised Crime Groups (OCGs) on the National Crime Agency database. 92% were involved in environmental crime.

We wouldn’t turn a blind eye to drug dealers/thieves/scammers/bank robbers so why is billions in waste fraud/money laundering being kept under the radar? Why are we paying no attention to the hundreds of millions hidden in fraudulent activity behind commercial waste fraud?

ISG Investigatons fly tipping

Waste is the new narcotics

It’s taken a little while for the true picture to emerge of the damage that commercial waste fraud can do. Back in 2016, Sir James Bevan, Chief Executive of the Environment Agency, described waste crime in the UK as “the new narcotics”. And it’s easy to see why.

Still classed as an environmental crime, the onus lies on the Environment Agency to prove environmental harm in order to prosecute. This requires time consuming and onerous evidence gathering, monitoring of sites, sampling of soil, assessing the waste that’s dumped and tracking vehicles.

But what about the fraudulent aspect to the illegal dumping of waste? The lag between what’s really going on underneath these crimes and the mis-match between what the culprits are actually investigated for, allows plenty of room for huge profits to be made by criminals and to remain un-detected by crime agencies and HMRC.

According to the Independent review into serious and organised crime in the waste sector, 2018 OCGs in the waste sector are more likely to be operating behind legitimate limited companies. This makes any criminal investigation much harder – and it becomes easier to hide criminal activity.

“Serious and organised crime involves the coordination of a wide range of illegal (or sometimes superficially legitimate) activity, which can only be uncovered by joining multiple dots. Without effective interrogation and linking of databases, Agency intelligence staff lack a crucial component in their understanding of, and ultimately their ability to deal with, organised waste crime.” Independent review into serious and organised crime in the waste sector, 2018

ISG Investigatons fly tipping

“Legitimate” fraud

So how do OCGs manage to create such an undetectable web when it comes to commercial waste fraud? Unfortunately the commercial waste system has plenty of holes in it that are susceptible to fraud, providing them with plenty of opportunity to exploit.

Standard waste disposal rates are £94.15 per tonne, being harder to dispose of it carries with it a hefty charge. Lower rate waste, like inert soils, hardcore and trommel fines, is charged at £3.00 per tonne.

It’s easy to see the benefit of “mis-labelling” waste – there’s a huge profit to make between what you can charge to your un-suspecting customer and what you actually pay if you label it incorrectly.

Many waste sites operate on old, paper-based systems that are open to manipulation and fraud. Manual ticketing of waste loads are an easy way for site workers and contractors to also get in on the act – vehicle details, weighing of waste and contents of the load can all be easily changed or written incorrectly to avoid detection.

Where waste testers come on to site to analyse waste samples, test results can be manipulated to further hide what’s really going on.

Of course, some fraudsters are even more crude. Buying or renting a plot of land, and simply setting up an un-licensed waste facility. Charging people the going rates for waste disposal, but using the site as a dumping ground.

We’ve taken part in an investigation where one site alone lost over £100 million in revenue because of these practices. But the cases are so complex and tread the fine line between environmental crime and fraud, neither the Environmental Agency nor Inland Revenue quite know how to solve the problem.

“The Environment Agency, while it lacks no shortage of highly committed personnel, has neither the necessary authority, powers nor business model to counter this criminal scourge effectively. The current structure and organisation within which staff operate belongs to an older, simpler world where technologies for recycling and incineration were less developed, digital record keeping less common, and the waste industry less global.” Lizzie Noel Chair, serious and organised waste crime review

ISG Investigatons fly tipping

Catching the culprits

“None of respondents to our call for evidence believed that organisations involved in dealing with waste crime were joined up. Respondents cited a lack a shared awareness of criminal activities, limited information sharing between organisations, and slow reaction times after each event.” Independent review into serious and organised crime in the waste sector, 2018

So often in complex commercial waste fraud cases, the culprits aren’t caught by bringing them to task for their environmental crimes. It’s only by looking behind the scenes that we begin to get parts of the jigsaw coming together.

When we’re investigating commercial waste fraud, we often start with individuals. We’ll look at yearly wages of employees and see how much they’re spending. Often there’s a huge discrepancy between what they’re earning and what they’re spending.

We’ve discovered employees earning £25,000 a year owning multiple new cars, classic car collections, overseas villas and some with fully paid off mortgages and multiple real estate. But with very little electronic trail of how these items were purchased and certainly out of reach of their salary.

Unexplained Wealth Orders (UWO) are heavily underused in commercial waste fraud investigations but these sorts of enquiries are often the catalyst for exposing the bigger picture. You don’t have to prove that the wealth has been accumulated illegally, suspicion alone is enough to grant the order. But only certain agencies can apply for a UWO, which means that it’s also essential for everyone involved in these investigations to communicate with each other.

The Joint Unit for Waste Crime has been established to help increase communication between the organisations involved in tackling commercial waste fraud and exposing serious fraudsters but we still have a long way to go. Often, the culprits are only caught after lengthy, time consuming investigation – especially in more complex cases.

Starting the mitigation and investigation much further down the chain is needed to prevent and stop these crimes from happening.

ISG Investigatons fly tipping

Private investigations

Cracking down on commercial waste fraud doesn’t just help save the environment – it also stops career criminals from spinning large, tangled webs that keep money from the public purse and endanger people’s lives.

We’re able to come into waste sites and run a variety of operations to help stop the fraud, catch the culprits and prevent larger crimes.

If you’re suspicious that there’s commercial waste fraud happening on your site, or even need upmost confidence in how the waste facility/site is running, we can run covert surveillance operations to monitor what’s happening on site and gather vital evidence you need for prosecution.

We’re also able to join the dots, by running additional investigations on the suspected culprits to gain a bigger picture of their involvement and find out what else they’ve been up to. This could be employee background checks, vehicle tracking, ANPR, random audit checks or using external waste testers. These are invaluable tools when trying to stop OCGs from going un-detected.

We can run risk assessments of your site to help you identify your weak spots that are open to manipulation. By fixing up the gaps in your waste processes on-site, you’ll also be helping to create a safer working environment for your staff when faced with potential threats, blackmail or violence.

All of this in-turn ends up helping to raise profits and revenue paid to HRMC.

There’s a long way to go until the system catches up with the crimes, but you don’t have to wait for that.

Ask for our help.

Click here to find out more about our services.

More Articles...

If you feel like you’ve exhausted all your options, we want to help.