The Charity Commission for England and Wales has disqualified three charity trustees from their positions after they were found to be indulged in a £10 million money-laundering scam involving fake Viagra and weight loss pills.

The commission said it was “considering its options around the recovery of charity funds” as it published the report of its inquiry into Chabad UK.

Officials said two trustees had been removed and disqualified, while the manager of the charities, Edward Cohen, had been automatically disqualified after he was convicted of laundering money by selling fake erectile dysfunction drugs.

They were also convicted for supplying false information to the commission.

Cohen was found guilty of stealing £165,000 from the charities and companies. Last year, he was sentenced to seven and a half years in prison.

The objectives of the charities include humanitarian efforts, education, relief of poverty, and the Jewish faith, according to the officials of the commission.

The Metropolitan Police said nine companies in the Chabad UK, including the seven charities, processed more than £10 million into 14 bank accounts from March 2012 to September 2014.

The police said a small proportion of these payments were legitimate charitable donations. However, most payments came from overseas accounts, which were linked to a large number of websites offering fake Viagra pills and slimming aids to customers in a few European countries.

It has been found that most of the charities’ annual returns declared no income or expenditure. Also, it has been found that over £60,000 was paid out of the bank accounts of the charities to an unnamed trustee from 2007 to 2015.

The commission said it will take action to recover funds held in some of the bank accounts, which were restrained under the Proceeds of Crime Act 2002. It also said it would make sure that any charitable funds recovered will be transferred to other genuine charities.