Private schools taking fees from criminal parents could be prosecuted for money laundering experts warn… after drugs baron pays for daughter's classes with envelopes of cash

• e-mail

Gangsters are using blood money to send their children to some of the best private schools in Britain.

The threat of criminals using public schools as money laundering hubs has existed for years, especially as the number of foreign students in the UK swelled.  

According to the Independent Schools Council, there are more than 61,000 foreign students at UK private schools, with 10,959 from mainland China, 1,517 from Russia and 1,323 from Nigeria.

More than 50 private schools have closed or announced plans to do so this year after Labour's VAT raid came into force in January.

But the new 20 per cent tax on fees could be having more than just an effect on whether private schools remain open.

Tom Keatinge, the Director of the Centre for Finance and Security at the UK's leading defence think tank, RUSI, told the Daily Mail that questions may be raised about whether Labour's tax on private school fees is fuelling parents to pay in cash. 

 He said: 'There have been periods of scrutiny of the private school system over the years.

'Especially when it's oligarchs paying with cash, [the authorities] look at schools who take cash from people with questionable wealth.

'What schools will say is they are relying on banks [to check where money is coming from.]'

London private schools usually charge around £10k a term, whereas world-famous Eton, where Princes William and Harry attended, charge more than £60k for a year's tuition.

Mr Keatinge said: 'If someone is paying in cash, there is no bank [to carry out checks] – it's a problem.

'There are limits on the amount of cash an organisation can accept without reporting it and there are very clear restrictions on the use of cash for the payment of high value services.

Gregory Bell (pictured) has been jailed for 18 years and nine months after providing some of Britain's most dangerous criminals with Class A narcotics such as cocaine and ketamine

London private schools usually charge around £10k a term, whereas world-famous Eton, where Princes William and Harry attended, charge more than £60k for a year's tuition. Pictured: Princess Diana, Prince Harry, Prince William and the then-Prince Charles attend William's first day at Eton College on September 6, 1995

An Organised Crime and Corruption Reporting Project revealed in 2011 that a Russian ghost company called Valemont Properties Ltd paid £10,943 into the Lloyds TSB account of the leading public school Millfield (pictured) in Somerset, via a Latvian bank

'A school would be unwise to accept cash in the best of times. There's clearly a concern about non-payment of VAT.'

Mr Keating explained that schools could be seen as 'complicit' in crimes if they accept cash, and face the risk of prosecution.

He added: 'If there's a case, I would like to see it prosecuted to the fullest extent possible.

'Up until now, there haven't been consequences. But the NCA has started to chip away at the sense of impunity.'

Earlier this month, a drug baron who paid for his daughter's private school fees with envelopes of cash he made while working as a wholesale supplier to gangs was jailed for 18 years and nine months.

Gregory Bell, 43, made millions providing some of Britain's most dangerous criminals with Class A narcotics such as cocaine and ketamine.

He owned 34 properties, mostly in east Manchester, together with two villas in Spain and lived in a prestigious rented, £2,200 per month, apartment in the upmarket Cheshire village of Prestbury.

Bell gambled much of his money - staking more than £2million into Ladbrokes and Betfred - while also splashing out more than £70,000 on designer clothing found at his home address.

The drugs tycoon educated his daughter at a private school and paid her fees by leaving an envelope of cash with the school receptionist, Manchester Crown Court heard.

He hid much of his criminal activity on the now-defunct private communications channel Encrochat, on which he went by the codenames of Castlesnail, Radiorhino and Wonkyfrog. He was also referred to as 'boss' or 'gaffer' on the platform.

But detectives managed to access Bell's encrypted mobile and uncover his operation, as well as the names of more than 70 names of drug suppliers and customers spanning Britain.

Prosecutor David Temkin KC said Bell was the head of a 'highly sophisticated' organised crime group which organised large amounts of drugs to be delivered to other major suppliers and gangs across the country.

It's not the first time a criminal has tried such a scheme.

James Ibori, 64, defrauded some of the poorest people in the world out of up to £157million of public funds during his time as Nigerian Delta State governor, lying about government contracts and embezzling cash.

James Ibori, 64, defrauded some of the poorest people in the world out of up to £157million of public funds during his time as Nigerian Delta State governor

The ex-Wickes cashier blew millions on luxury homes, a £12.6million private jet, fees at some of the UK's most expensive boarding schools for his children, first-class travel and exclusive hotels. He even bought properties in Washington DC and Texas.

The crooked politician owned a £600,000 fleet of armoured Range Rovers, a £120,000 Bentley, and a £340,000 Mercedes Maybach that was shipped directly to his lavish £3.2million mansion in Johannesburg. He also had a £2.2million home in Hampstead -  paid cash for in cash in 2001 - and a £311,000 townhouse in Dorset.

Ibori served four years in a UK prison before he voluntarily returned to Nigeria in December 2016 after being told he faced deportation. 

Ibori had moved to the UK in the 1980s where he married and set up home with his wife, Theresa Ibori, in Nower Hill, Pinner, Middlesex. He worked as a cashier at a building supplies store Wickes in Ruislip, Middlesex, earning around £5,000 a year. 

But after his time in Britain - which saw him being convicted of petty theft - Ibori moved back in his home county and became one of Nigeria's most influential and wealthy politicians. 

However, behind the scenes, he used a complex network of associates - including his wife, sister and his lover - to launder cash from his proceeds of crime.

He was eventually jailed for 13 years in 2012, after admitting to conspiracy to defraud, money laundering and conspiracy to make false instruments over a £23million fraud on Delta state and Akwa Ibom state between 2005 and 2007.

But at the time, a sentencing judge branded this sum 'ludicrously low', claiming the amount the Ibori could have embezzled might have hit a staggering £200million. 

In 2023, following one of the most complex confiscation proceeding investigations in British history, the Crown Prosecution Service proved Ibori had benefited from his crimes to the tune of £101,514,315.21.

Additionally, an Organised Crime and Corruption Reporting Project revealed in 2011 that a Russian ghost company called Valemont Properties Ltd paid £10,943 into the Lloyds TSB account of the leading public school, Millfield in Somerset, via a Latvian bank. 

The school, which has fees of up to £35,000 a year, was made aware of allegations against Valemont in 2014 and reported the transaction to the National Crime Agency.

An HMRC spokeswoman said: 'Cash payments to businesses aren't illegal. Schools and any other organisations receiving cash payments must stay alert to financial crime risks and report anything suspicious.'