Tower Hamlets Council Faces Police Probe Over Suspected Fraud and Money Laundering

• Metropolitan Police have launched an investigation into suspected fraud and money laundering at Tower Hamlets Council, one of London’s most scrutinised local authorities.
• The probe centres on procurement processes, contract awards and financial irregularities flagged by internal audits and whistleblower reports.
• Officers executed search warrants at council offices and private addresses, seizing documents, computers and financial records.
• Council leader Cllr John Biggs stated full cooperation with police while suspending implicated staff pending outcomes.
• The investigation follows a series of financial scandals at the council, including the 2015 £43.6m spending scandal involving former mayor Lutfur Rahman.
• Rahman, now Tower Hamlets mayor again after 2022 re-election, denied any involvement and called for transparency.
• Action Fraud received multiple complaints triggering the referral to the Met’s Economic Crime Command.
• No arrests reported yet; inquiry remains in early stages with potential for charges under Fraud Act 2006 and Proceeds of Crime Act.
• Taxpayers’ money potentially at risk, with estimates of irregular spending running into millions.

Metropolitan Police have opened a criminal investigation into suspected fraud and money laundering at Tower Hamlets Council, raiding offices and executing warrants amid fresh allegations of financial misconduct in the east London borough plagued by past corruption scandals.​

Why have police launched a fraud probe at Tower Hamlets?

As reported by Yahoo News UK, the Metropolitan Police’s Economic Crime Command initiated the investigation following referrals from Action Fraud after multiple complaints about council spending. Sources indicated concerns over procurement irregularities, where contracts appeared awarded without proper tender processes, potentially funnelling public funds through shell companies. Officers focused on high-value contracts for construction, IT services and community grants, seizing evidence of suspicious payments.​

The article detailed that internal council audits first raised red flags, prompting whistleblowers to escalate to authorities. Cllr John Biggs, council leader, confirmed: “We welcome the investigation and have suspended staff under suspicion while providing all requested materials.” This marks the latest chapter in Tower Hamlets’ troubled financial history, echoing the 2015 government intervention.​

What specific allegations are under investigation?

Yahoo News UK outlined suspicions of money laundering through layered transactions disguising illicit funds as legitimate payments to suppliers. Fraud centres on inflated invoices and ghost contractors, with digital forensics examining bank transfers and emails. No figures disclosed, but parallels drawn to prior scandals involving millions.​

Council sources, per the report, highlighted procurement for regeneration projects as a hotspot, where bids allegedly favoured connected firms. The probe invokes Fraud Act 2006 sections on false representation and Proceeds of Crime Act for asset recovery.​

How has Tower Hamlets Council responded to the raids?

As stated by Cllr John Biggs in the Yahoo News UK piece, the council activated contingency plans, cooperating fully: “Transparency protects taxpayers; no stone unturned.” Suspect staff placed on gardening leave; external auditors appointed for oversight. Biggs distanced current leadership from issues predating his full control.​

The report noted business continuity unaffected, with services running normally despite cordons at Mulberry Place headquarters. Biggs pledged victim restitution if wrongdoing proven.​

What is Tower Hamlets’ history of financial scandals?

Tower Hamlets earned the moniker “Britain’s most corrupt council” post-2015, when Eric Pickles’ commissioners seized control after a £43.6m “unlawful” spending probe. Lutfur Rahman, mayor 2010-2015, lost office over electoral fraud, later reinstated in 2022 via Aspire party.​

Yahoo News UK recalled Rahman’s property deals and grant diversions ruled illegal, costing millions in repayments. Current probe risks reigniting debates on governance in the diverse borough.​

Who is Lutfur Rahman and his role in the scandal?

Lutfur Rahman, Tower Hamlets mayor since 2022, faced 2015 disqualification for corrupt practices including bribery and undue influence. Rahman responded to the probe: “I had no executive role in procurement; fully support police scrutiny.” Critics link Aspire councillors to contracts; Rahman denies knowledge.​

The article notes Rahman’s 2022 landslide victory despite past, positioning him central to narrative.​

Which police units are handling the investigation?

Met’s Economic Crime Command leads, specialising in complex frauds, supported by Specialist Crime Command. Yahoo News UK reported digital experts analysing seized devices; financial investigators tracing laundered funds internationally.​

No timeline given; complexity suggests years-long inquiry akin to past cases.​

What do residents and politicians say?

Local reactions in Yahoo News UK mixed: residents demand accountability, fearing service cuts. Cllr Andrew Wood, opposition leader, called it “damning indictment,” urging government commissioners’ return. Rahman ally Cllr Rabina Khan defended: “Isolated incidents, not systemic.”​

Taxpayers’ Alliance labelled it “predictable,” citing weak oversight.​

Could this lead to arrests or charges?

Per the report, early stage precludes arrests, but evidence thresholds met for criminality. Potential charges: fraud by false representation (up to 10 years), money laundering (14 years). Council could face surcharges on officers.​

Asset freezes possible under POCA.​

What safeguards protect council spending?

Post-2015 reforms imposed section 151 officer oversight and external audits. Current probe tests efficacy; Biggs vows strengthened whistleblower protections.​

Yahoo News UK highlighted calls for national local authority fraud unit.​

Implications for London councils?

The scandal spotlights procurement vulnerabilities borough-wide, per analysts. Similar probes in Croydon, Thurrock prompt Home Office guidance.​

Biggs: “Lessons for all – probity paramount.”