Financial Crime World

Dutch Authorities Shut Down Caribbean Bank Linked to £5bn UK Tax Fraud Scheme

In a significant crackdown on international criminal networks, Dutch and British authorities announced the closure of First Curaçao International Bank (FCIB) in the Netherlands Antilles amid an investigation into tax fraud.

The Shutdown of First Curaçao International Bank (FCIB)

The bank, which reportedly had over 2,500 UK citizens as clients, was identified as the primary financial channel for individuals involved in carousel fraud, a crime estimated to cost the UK taxpayer over £5bn per year.

  • Dutch and British customs officers conducted raids in London, the Netherlands, and South Wales.
  • Several suspects were arrested, including sisters John Deuss and Martina Deuss, the founder and owner of FCIB, respectively.
  • Dutch authorities requested to question John Deuss about the bank’s role in money laundering.

The Colorful Past of John Deuss

The 64-year-old John Deuss, a Dutch oil trader, had once been accused of violating South African sanctions and attempting to defraud the Soviet Union.

  • No evidence ties John Deuss to carousel fraud trades.
  • Martina Deuss is currently being questioned about the bank and affiliated companies’ involvement in tax fraud.

Carousel fraud, also known as VAT fraud, involves the import and export of goods to reclaim the value-added tax multiple times.

  • The bank’s closure came after authorities discovered that all suspects charged with carousel fraud over the previous two years held accounts at FCIB.
  • The bank’s turnover jumped from approximately $60m in 2020 to over $6.5bn in a week, coinciding with an increase in carousel fraud losses.
  • The bank had also established a UK operation, Transworld Payment Solutions, which vetted potential clients.
  • Raids were conducted on Transworld’s Knightsbridge offices, as well as those of Dutch bank Rabobank and Swiss bank UBS.

Tracing the Money Trail

The breakthrough in the case came when investigators traced the money trail to FCIB.

  • The bank’s suspicious transactions with correspondent banks, including Barclays, Rabobank, and UBS, led each bank to close the door on FCIB.
  • UBS’ rejection prompted FCIB to warn clients of impending account closures, which occurred on August 31.

The closure of FCIB led to a significant decline in estimated carousel fraud for Her Majesty’s Revenue and Customs (HMRC).

  • £1.6bn in fraudulent exports occurred during July, down from over £4bn in each of the preceding four months.
  • HMRC remains optimistic about the impact of the growing number of arrests and shutdowns of fraudsters’ banking facilities on the overall crime scene.