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The long read: Hundreds of millions of pounds of dirty money are being deposited at post offices every year. So why are the police reluctant to investigate the scale of the problem?
Read full story on theguardian.com →
News — Oliver Bullough
Leicestershire police won’t say who first told them about Jigar Gheewala, but you can see why, once they had heard of him, they decided to find out more. Gheewala was unemployed, had no apparent income, yet lived in a £1.3m house and sent his three children to private school. “He was a declared bankrupt, with a bank account that was absolutely not reflective of what it should be,” said financial crime supervisor Laura Panter of Leicestershire police’s economic crime team. “That was our starting point.”
Over the course of 2020, despite being on benefits, Gheewala’s bank account received more than £880,000 in cash in 200 different deposits. He was, it turned out, a money launderer, but not the kind you’ll see in the movies. Gheewala’s deposits had been made not in Liechtenstein or on Grand Cayman, but at various post office branches in Leicester, one thick wodge of banknotes after another.
As banks have closed branches all over Britain, post offices have quietly become central to how we move our money. In 2017, post offices began to accept deposits on behalf of banks, and those deposits now exceed £30bn a year. The way it works is straightforward. A customer hands over banknotes to be counted, then inserts a bank card and enters the pin, like a cashpoint in reverse. The post office system then credits the value of the cash to the account linked to the card.
It is a simple system, which Post Office Ltd, the state-owned company that controls the branches, says provides a crucial service to businesses and individuals otherwise cut off from banking services. But the simplicity comes at a cost. It has eliminated many of the checks that previously stopped criminals from laundering their cash. In the same way you can use someone else’s card to take money from a cashpoint, provided you know the pin, you can use any bank card to make a deposit at the post office. The process is deliberately streamlined and, unlike at a bank, the post office operative (often referred to as postmaster or subpostmaster) has no way to access any of the account details, and thus no way to check if the person with the card is its holder, or whether this transaction is part of a suspicious pattern.
Law enforcement agencies estimate that, alongside ordinary businesses’ takings, hundreds of millions of pounds of dirty money are being paid into the post office each year. This allows drug dealers and other criminals to bank their illicit wealth, and profit from their crimes, and to do so with the absolute minimum of effort. “The number of places where cash can come into the economy is vast now but, as bank branches continue to close, the number of places to pay it back in has necessarily become more restricted. You’ve got this sort of reverse funnel effect going on,” said a former Post Office employee with knowledge of how it organises financial services. “The bad guys are genuinely targeting post offices as one of the few places left where they can actually go to put money in.”
Leicestershire police used Gheewala’s transactions to reconstruct how he operated. On a typical day, he might make his first cash deposit in the east of the city, at a post-office counter hosted by a convenience store; then it would be a five-minute drive to another store, with boxes of veg out the front, its windows obscured by decals of soft drinks and spirits, offering post office services alongside the scratchcards. A few minutes away was another branch, between a chemist and a fried chicken shop, before another short drive would bring him to a retail centre where the post office sat next to a bakery on a prosperous-looking residential street. A final drive north would take him to a convenience store among red-brick detached houses, and that was a morning’s work done: thousands of pounds deposited in an hour or so, bundles of criminal cash being paid into the most ordinary of locations.
“When we started looking at this, we were then able to see other individuals in Leicestershire that were mimicking exactly the same activity,” said Panter. “What we were finding was there was quite a consistent pattern in terms of the deposit activity around post offices.”
Panter and her colleagues’ investigation became Operation Kilo, which began in 2021 and culminated in December 2025 with Gheewala being sentenced to almost 12 years in prison, along with six co-conspirators. And this was not just a Leicester-based operation. Officers watched as couriers came to Leicester with bags full of cash earned by criminals from London and Yorkshire, stashing them in shops for Gheewala’s people to pick up. Each day’s haul would be distributed among a network of underlings, who trekked around the city’s post offices, paying rubber-band-bound stacks of banknotes into as many as 10 different accounts at each stop, using cards with the pins written on the back.
The bank accounts into which the money was deposited belonged to ordinary people – “mules” in police jargon – who received small payments for renting them out, or to companies in Leicester’s garment business, where managers faked invoices to make the payments look legitimate. (Gheewala promised the mules £50 per £10,000 laundered, but in reality he often seems to have paid them less than that.) Gheewala controlled the whole operation from a laptop kept in an otherwise empty house, with all the account details and their passwords written down in a notebook. As soon as the money appeared online he would, using cryptocurrency exchanges, disperse it around the world.
In two years, Gheewala’s group moved an astonishing £53m , allowing organised criminals to legitimise their earnings on an industrial scale. It’s not clear how much exactly Gheewala was charging for the service, although to judge by the lifestyle he was living, he was doing well out of it.
His operation might have been big, but it wasn’t unique. Just a month after Gheewala’s conviction, two men were jailed in Birmingham for an almost-identical scheme, in which they paid in up to £200,000 a day as they travelled between 10 post offices in the east of the city. In April, a man from Cheltenham was jailed for six years and eight months for controlling a network of mules paying millions of pounds of cash into post offices in Bristol and Gloucestershire.
And this has been going on for a while. Two men were jailed at Southwark crown court in 2024 for paying £26m into post offices in London and Manchester before their arrests in 2017. Students have been jailed in Scotland for paying criminal money into post offices, and there are other ongoing cases in which similar crimes are alleged.
If it wasn’t for what has been going on elsewhere in the Post Office, this would be a major story. Instead, it has been largely ignored.
The Post Office Horizon scandal burst into the public consciousness thanks to 2024’s ITV drama Mr Bates vs the Post Office, but by that stage it had been dragging on for two decades. Post Office Ltd wrongly prosecuted hundreds of its post office operatives, despite senior figures knowing that the computer program that supposedly showed they had been committing fraud was faulty. Ex-post office operative Alan Bates’s landmark victory against his former employers in 2019 forced the government to overturn his and others’ convictions, and to promise to pay hundreds of millions of pounds in compensation.
The scandal is one of Britain’s worst miscarriages of justice. One of its unfortunate side effects is that it has impeded investigations into how much money is being laundered via post office branches. Even if police officers are themselves confident that figures originating in Post Office Ltd’s Horizon software (a version of which is still being used ) are reliable, they are aware that many jury members will – for understandable reasons – be intensely sceptical. Documents released by the inquiry into the Horizon scandal show that, in 2024, just a few weeks after the ITV drama was first aired, a detective constable from Blackburn police station decided to halt an investigation into “large-scale money laundering, and possibly other fraud offences” via post office branches in Lancashire out of concern that defence lawyers would find it too easy to discredit evidence originating from the computer system.
“After the Mr Bates TV show, it became a real hot potato and nobody wanted to get hold of it,” said one officer, who asked to remain anonymous. “For every case that’s brought, there are many more in the background. There is no real appetite to do anything unless it’s a slam dunk, because the public is on the side of the post office operatives.” So the problem remains. “It’s the way that you can pay money into the post office without checks, that’s the problem. It’s huge.”
If you look at the raw numbers, you can see his point. In October 2020, cash deposits at post-office branches across the UK totalled £1.9bn . That is £1.9bn for that single month, not the whole year. The following October, the sum was £2.2bn. That number kept rising each year until, by October 2025, it came to £2.9bn – an increase of 50% in just five years. Although Post Office Ltd then stopped publishing such detailed figures, the trend has continued. It boasted of a 10% increase in deposits in the first quarter of this year, meaning they have now almost certainly passed £3bn a month.
What makes these numbers so astounding is that over the same period, cash usage among the general public has dropped sharply. Cash now accounts for fewer than one in 10 transactions in the UK. Yet cash deposits at the post office have gone sharply in the opposite direction.
According to Post Office Ltd, the reason it stopped publishing monthly cash totals last year was because its post office operatives did not want to alert criminals to the amount of money they had on the premises. Branches are vulnerable to theft for the same reason they are wide open to money laundering. They are often just ordinary shops offering post-office services over the counter, and they lack the specialised equipment that would allow them to track who is on the premises, or to keep their employees safe.
Back when Post Office Ltd was still publishing its monthly cash figures, it would accompany them with upbeat quotes about how much it was helping small businesses by providing banking services. While much of the increase is certainly being driven by the closure of bank branches, a senior police officer would regularly forward the figures to me, accompanied with a single emoji: 👀.
Concerns about being seen to further victimise post office operatives has discouraged police officers from going on the record about the scale of the problem that they’re seeing. “I’m sure you appreciate that anything quotable is going to have to be suitably vanilla,” another senior officer told me. “It would need to be, you know, ‘we work in partnership’, ‘there are many perspectives’-type stuff.”
The sensitivity is understandable, but it comes with dangers. By making it possible for organised criminals – drug dealers, human traffickers, thieves, fraudsters and others – to launder their earnings, and thus to keep their profits, the post office risks creating an entirely different scandal.
The trial of Giuseppe Sangiovanni and seven of his alleged co-conspirators was due to start in May 2025 at Bristol crown court, and to run for several days. Sangiovanni was accused of running a scheme that laundered £2.2m via post office branches in Bristol and Gloucestershire over a few months of 2021. His alleged co-conspirators were accused of letting him move money through their bank accounts in return for small payments.
On the first morning of the trial, however, Sangiovanni changed his plea to guilty and left the courtroom to await a fresh hearing, leaving his co-defendants behind. It quickly became clear that they were not criminal masterminds. I had only just arrived in Bristol and knew only the bare outlines of the case, but even I could tell their chances of escaping conviction were now close to nonexistent. If the prosecutors had all the transaction details, and the ringleader was admitting the charges, then the owners of the bank accounts through which the money had passed would find it all but impossible to convince a jury that nothing untoward had occurred.
Technically, a trial was still scheduled, but it was so obviously not going to happen that the jury never even entered the courtroom. The two prosecution lawyers, far from wargaming the new reality, were using the break to discuss holiday destinations for their unexpected spell of spare time. The only people present who appeared not to realise the consequences of Sangiovanni’s decision were his co-defendants, who continued to sit in the dock like baby birds in smart casual, with only the haziest of ideas what was going on.
The judge tried to help, encouraging them to discuss things with their lawyers. They whispered among themselves, until one at a time – over the course of many hours, and after many hearings were convened, suspended and convened again – they changed their pleas to guilty too. (They were not masterminds, as I say, and mostly received suspended sentences.)
“They’re just run-of-the-mill local criminals. A couple of them weren’t really criminals at all. One that we didn’t charge was a single mum and, to a degree, was exploited,” said Detective Inspector Peter Highway of the south west regional organised crime unit. It was only while being interviewed by police that one defendant discovered that Sangiovanni had laundered more than £1m through his bank account. “He was a bit surprised by that number,” said Highway, “because he hadn’t done the deposits himself.”
Money laundering was criminalised in the UK in 1988 as part of a global effort to close loopholes in the financial system that were allowing criminals to keep their profits. Previously, it had been easy for criminals to walk into a bank and pay in cash, no questions asked, but the new laws obliged bankers to report suspicious transactions to law enforcement agencies. The theory was that, with bankers sending in a steady stream of suspicious activity reports, police officers would be able to see money being laundered in real time, freeze it and arrest its owners.
The world has moved on since then and the most sophisticated crime, such as fraud, involves electronic money stolen from people’s bank accounts and moved in a bewildering variety of ways, involving shell companies, cryptocurrencies, secrecy jurisdictions and more. This requires equally advanced countermeasures from banks, which use AI-powered tools to spot the signs of criminal behaviour.
At the street level, however, not much has changed: criminals still use cash, and the National Crime Agency estimates that they launder about £12bn worth of banknotes in the UK each year, largely by presenting the money as the fruits of legitimate businesses. This is where branches of the post office come in.
From the criminals’ point of view, post offices are quick and easy places to launder dodgy money. “There’s no requirement for ID verification, there’s no requirement for any kind of enhanced screening, there’s no centralised CCTV,” said the second senior police officer. We put a higher bar on buying alcohol than we do on money laundering via the post office.
This is why Gheewala’s mules were able to go into a branch with a pocket full of bank cards, and pay bundles of cash into multiple accounts, one after another. “You definitely don’t want, in a post office that has already got queues out the door, to have a complicated financial transaction going on. So everything that the post office does for banking is done with simplicity in mind,” said the former Post Office employee.
The trouble then is, as happened in Leicester, that criminals move money onwards as soon as it arrives in a bank account. Any reports that post office employees do make about the transaction will come too late for the bank to be able to freeze it. This defangs the UK’s entire anti-money-laundering strategy, which has always relied on being able to block suspicious transactions while officers investigate them.
The criminal possibilities opened up by Post Office Ltd’s foray into banking were quickly obvious. In July 2020, the Post Office’s compliance committee noted £7m of questionable deposits had gone into 45 branches. In November that year, it discussed how £5-7m a week was being deposited at just two branches in east London, and said it was discussing with the banks what action to take.
Sangiovanni and his co-defendants fell foul of this kind of scrutiny, after bank compliance officers spotted what amounted to millions of pounds of suspicious cash transactions at 27 post offices around Gloucestershire, and alerted the police who brought in first the mules, then Sangiovanni, for questioning. “He gave an account that he would go to a car park at Asda, and someone would give him a carrier bag full of cash, and he would then take it away, and then send them some crypto,” said Highway. “He didn’t feel that was suspicious. We did.”
By the time officers from the south west organised crime unit moved in, however, the money was long gone. So, although they caught Sangiovanni, the criminals whose cash he was laundering got to enjoy the freshly laundered money. “Millions of pounds into the laundering, that’s a bit late in the day,” said Highway.
It looks obvious how to close this gap in our defences against dirty cash. If the Post Office is going to act like a bank, it should collect the same kind of information as a bank, make the same kind of reports as a bank, and freeze transactions in the same way that banks do. In 2023, the regulators at the Financial Conduct Authority (FCA) took a small step in this direction, by imposing limits on how much cash could be deposited at the post office at any one time. It was a logical step to take, but it ran into immediate controversy.
The fact that two-thirds of bank branches have closed in the UK in the past decade has left businesses and individuals who still rely on cash heavily dependent on post-office branches to pay in their takings. Post Office Ltd used this fact to push back against the FCA’s deposit limits by saying they were penalising hard-pressed businesses that were just trying to stay afloat. “They are hurting legitimate customers and businesses who need support,” said Ross Borkett, Post Office Ltd’s then-head of banking, after the FCA’s changes were announced. Cash-intensive businesses, via the British Independent Retailers Association and the Independent Retail Consortium, mobilised a lobbying operation, writing to their MPs, who in turn held debates in parliament to highlight how few bank branches were left in their constituencies.
As a result, ministers promised to ensure that businesses and individuals still reliant on banknotes and coins would always be able to use them. In other words, the FCA’s cash limit is likely to be the last intervention to make payments at post offices harder.
At a time when an increasingly large proportion of the population can’t access a physical bank branch, the 11,500 post-office branches in the UK will become ever-more central to a strategy of ensuring everyone can still use banknotes. Moving, securing and accepting cash is expensive though, which is one reason why the banks don’t much want to do it any more. Post offices don’t charge their customers for making deposits, however, so who is going to pay for it?
The answer to that question is tied up in the legacy of the Horizon scandal. Post Office Ltd was already in significant financial difficulties before it began having to pay compensation to the hundreds of post office operatives that it had unfairly prosecuted. It has now had to distribute more than £1bn , pushing it into a deep annual loss.
That is already a significant challenge for its long-term viability, but it is only half of the problem it faces. Post-office branches operate as independent businesses, but the amount of money operatives earned from providing post office services fell by almost 5% in the decade to 2023, in part thanks to fewer people sending letters. Meanwhile, post office operatives’ expenses have increased. So Post Office Ltd not only needs to find the money to pay compensation to the post office operatives it has wronged, but it must also simultaneously find a sustainable business model if it wants people to be post office operatives at all. And that is where banking comes in.
Banks pay Post Office Ltd for providing services on their behalf, which helped it to post revenues of £309m from “banking and ATMs” in its 2024-5 accounts. That was more than a third of its revenues for that year, and only slightly less than it earned from handling the mail. In fact, Post Office Ltd may already be making more money from deposits and withdrawals than it does from its traditional business. As the former insider joked: “We should start calling it the Bank Office.”
This isn’t just important for Post Office Ltd, but also for individual post office operatives, who earn a fee for every cash deposit they accept. “The post office operatives will be remunerated on the transactions that they have through their branch, so they will get a transaction fee,” Ben Woollard, the new head of banking at Post Office Ltd, told me. “As with any product, the more a post office operative or any business will deliver, then they will earn more income out of that.”
Woollard argues that post-office branches are no different from any other business in being vulnerable to money laundering. He pointed out to me that anyone offering banking services receives annual training in how to recognise and tackle money laundering, and that the head office sends out alerts to branches in areas that appear to have a large number of suspicious transactions.
But although any business that handles cash could be exploited by criminals, it is also true that few businesses handle banknotes in the volumes that routinely pass through post-office branches, making them more vulnerable to abuse than most. Post office operatives are also running a system that we know is already wide open to dirty money, and are rewarded proportionally to the raw total of money they put through it, so the temptation to look the other way or even to provide financial services to criminals must be ever-present.
We have no idea how many insiders have given in to this temptation, and it looks likely that we will remain in the dark. The disastrous legacy of the Horizon scandal means there has been little appetite to investigate. With such a deeply flawed system, the best that police officers can hope for is to prosecute the more egregious offenders.
So despite the success of Operation Kilo, Leicestershire police’s Detective Constable Catherine Richards wasn’t exactly optimistic that Gheewala’s conviction would change anything: “Crime is continuing,” she told me. “Money needs to be laundered. And, yeah, somebody else fills those boots, don’t they?”
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Over the course of 2020, despite being on benefits, Gheewala’s bank account received more than £880,000 in cash in 200 different deposits. He was, it turned out, a money launderer, but not the kind you’ll see in the movies. Gheewala’s deposits had been made not in Liechtenstein or on Grand Cayman, but at various post office branches in Leicester, one thick wodge of banknotes after another.
This report is published with credit to theguardian.com. Full available text from the wire is above. Read on theguardian.com →
Source: theguardian.com · Oliver Bullough. Published 25 Aug 2026, 04:00 am.
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