Paul Holden, the director of investigations at Shadow World Investigations, has told the State Capture Commission of Inquiry that the Gupta enterprise used pre-existing and independent criminal networks to launder its funds abroad.

Holden returned to the commission on Tuesday to give money flow-related evidence.

He compiled a report analysing thousands of bank statements and detailing alleged laundering of money linked to state capture corruption.

For a number of years, Holden said the Gupta enterprise made use of vehicles that received payments from contractors to the state, in contracts tainted by state capture.

“The contractors to the state would make multiple of many payments to first level laundry entities that were designated by the Gupta enterprise,” he said.

During his testimony, Holden also described the four laundry networks identified in his report that operated at the highest level and their structure.

Holden said:

The laundries were obviously incredibly complicated, but in analysing them, it became clear there was a certain pattern to how they operated.
At the very top level, Holden said there was a first-level “laundry vehicle” entity that received funds from state contractors.

From there, the funds were paid into what he said was an intermediary account or high-level laundry vehicle, he said.

“The funds are then paid into that intermediary account from multiple different first level laundry entities and then sent onwards in the money laundering network. Generally speaking, the funds are either sent onto a second further party who aggregates the funds, and then makes those transfers onwards again.

In most instances where we have been able to trace the funds flowing to some sort of endpoint, the funds generally end up offshore, through what I [Holden] refer to in the report as an onshore/offshore bridge in my report.

“An onshore/offshore bridge is a company that receives and aggregates payments from this extended laundry network and then makes payments abroad into a very extended overseas laundry network,” he said.