KYC Solutions for prestigious prep schools?


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Britain’s prestigious private schools are not required to use KYC solutions as part of their admissions vetting process, but some anti-corruption groups are wishing they would make an effort to do so.

The British newspaper The Independent last week published an investigative story detailing money laundering through British front businesses and the Moldovan court system, and it followed up with a lengthy story about how laundered money from this massive scam found its way into exclusive British prep schools in the form of tuition payments for the children of the corrupt launderers. Moldovan officials investigating the laundering operation singled out Millfield, a British private school that, according to its website, costs approximately $20,000 per year for the high-school age students.

Frank Cummings, CEO of AML Partners, said that this type of integration of laundered cash is yet another way of taking illicit funds from the layering stage into full integration. “Tuition at a private school or a university is really no different from buying a diamond or a fast car,” Cummings said. “It’s a high-value purchase that moves the criminal cash into the mainstream and provides something of great value to the launderer.”

Cummings said that while Millfield made the news in this particular case, this type of integration is occurring all over the world, particularly with the cost of private schools and their prestige factor and long-term return for the family. The top private prep schools in the U.S. and the U.K. cost more than $50,000 per year, and there are Swiss boarding schools that run over $100,000 per year.

According to Independent reporter Jim Armitage, anti-corruption organizations like Transparency International and Global Witness have begun to shine attention on the integration of laundered funds at high-prestige prep schools and universities, neither of which have a legal requirement to vet funds but who may have a moral expectation to do so, according to some anti-corruption activists. Transparency advocates would like to see private schools and universities make an effort to know the source of the tuition payments of its wealthy patrons, particularly those that come from regions of the world with high incidences of corruption and little attention to law enforcement regarding illicit funds.

Transparency International executive director Robert Barrington said that while the overall amount of money laundered through tuition payments is small compared to other schemes, it has the added benefit to criminals of legitimizing their families and children whose wealth results from crime but whose children and future generations gain the networking, legitimacy, and prestige inherent in attendance at a prestigious school or university.