As British authorities continue the search, the National Crime Agency (NCA) has seized millions of pounds’ worth of his property, including gold bars and an artwork.
Here, we delve into the details of the case, and speak with financial crime experts about the lessons it holds for accountants.
How did Mayhew-Lewis do it?
Mayhew-Lewis helped multiple networks of organised criminals, most of them involved in the drug trade, to launder money.
He employed a variety of strategies. One of his favourites was passing money through numerous companies and bank accounts, to muddy its origin, before paying criminals an apparently legitimate income.
In the process, he would create fake documents, such as bank statements and investment records, to make payments appear plausible. Sometimes he used companies registered internationally and made them look like investment platforms.
At least once, he helped a criminal buy a company to secure a bounce back loan.
In 2019, the West Midlands Police arrested Mayhew-Lewis and found eight kilograms of gold bars, worth £250,000, in his Bentley.
He was charged in August 2022, and, in January 2023, found guilty following a trial at Southwark Crown Court.
However, in July 2023, he failed to appear at his sentencing hearing, and has been wanted ever since.
In April 2024, the NCA announced it had seized the gold found in 2019, which is now worth £400,000, and a painting by Frank Auerbach titled Albert Street, 2009.
Mayhew-Lewis bought the painting for £1.6 million in 2017, and authorities believe someone else used it subsequently to secure a £5 million loan from an auction house.
AML lesson for accountants: Know your customer
“The key here is to really know your customer [KYC],” says Jessica Cath, Head of Financial Crime at Thistle Initiatives.
“We talk about KYC all the time, but [it’s] often completed as a tick-the-box exercise. Very few accountants and finance teams really take the time to understand each customer and verify whether the story they’re telling truly makes sense.”
It’s important to gain a deep understanding of three elements. The first is the business’s corporate structure.
“Request charts showing the organisational structure and verify them,” says Cath.
“If the structure is highly complex, question whether that complexity is necessary and why it was set up that way.”
The second is the ultimate beneficial owner.
“Make sure you know without question who really sits at the top,” says Cath.
The third is where the business gets its money.
“This doesn’t just mean how [it’s] funded now, but also how any initial investment was generated,” says Cath.
“It goes without saying that you should always investigate the source of funds in the specific transaction you’re managing. If you can’t confirm that all have legitimate origins, then you have a problem.”
AML lesson for accountants: Guard against fake documents
“Unfortunately, rapidly evolving technology has made it very easy for criminals to create fake documentation,” says Cath.
“From data-scraping tools to AI-powered image generators, it’s almost too easy. It’s also relatively easy for criminals to steal real documents, which makes fraud even more tricky to identify and prevent.”
“When [there’s] a foreign element, it’s really very difficult to identify everything [you] need to ensure [you] know who you’re dealing with,” adds Vipul Sheth, Managing Director, Advancetrack Outsourcing.
Despite these challenges, accountants and finance teams can nonetheless take steps to strengthen their defences. This includes training staff to identify whether documents are authentic by looking out for red flags, including inconsistencies in formatting, missing authenticity stamps, spelling errors and blurry text.
“Many firms are also now looking at using AI-powered software to detect fraudulent documents more quickly,” says Cath.
“This can certainly be a worthwhile investment, but you must do your due diligence. For example, test software with high-quality fake documents, to see if it catches inauthenticity.”
AML lesson for accountants: Err on the side of caution
“If you ever have the slightest doubt, you should feel empowered to ask for more documentation, or ask more questions, so you can cross-reference,” says Cath.
Since the Mayhew-Lewis case, the Money Laundering Regulations have been updated to cover the buying and selling of art.
“As of January 2020, art market participants who deal in the sale, purchase or storage of works of art with a value of over €10,000 have been subject to strict anti-money laundering obligations,” says Richard Cannon, Partner at Stokoe Partnership Solicitors.
“Crucial is the requirement to operate anti-money laundering policies to identify and reduce risk in transactions. [These include] a requirement to identify the physical person or controller of the corporate entity concerned, then carry out a risk assessment.”
Cath points out that, in the case of Mayhew-Lewis, “alarm bells should have been ringing as soon as the storyline didn’t make sense”.
“For example, there are questions around why he only paid £1.6 million for a painting worth far more, not to mention where that £1.6 million came from in the first place.”
AML lesson for accountants: when to submit suspicious activity reports (SARs)
Accountants can play a key role in combating money laundering by remaining vigilant, and, when appropriate, submitting suspicious activity reports (SARs).
“The information gathered [from SARs] often provides the NCA with real time intelligence on money laundering activity and can be the first step in freezing and seizing the proceeds of crime,” says Cannon.
Under the Proceeds of Crime Act (POCA), accountants are required to submit a SAR if they know or suspect, or have reasonable grounds for knowing or suspecting, that a person is engaged in, or attempting, money laundering.
“In practice, the test for suspicion – as set out in the case of R v Da Silva – is relatively low, and would include a person ‘who thought that there was a possibility, which was more than fanciful, that the other person was or had been engaged in or had benefited from criminal conduct’,” says Cannon.
Key to determining whether this test is met is having trained staff and effective reporting protocol in place.
“[This] enables the Money Laundering Reporting Officer (MLRO) to have sufficient information to decide what action is required, without notifying the parties involved in the offending activity,” says Sheth.
“It is then for the MLRO, perhaps with assistance from internal management or separate advice, to decide if it is a reportable offence.”
The final word
“As always, accountants and finance teams need to think about their professional responsibilities, and who they seek to act for,” says Sheth.
“While not scientific, if a client is evasive in answering questions or providing information, the ‘smell test’ is probably a good starting point. Think through your KYC processes and prepare for a world where clients are mobile, and move from country to country.
“The technology and systems are there for you to complete all necessary checks on clients, but the key is [an effective] risk assessment process.”