Why we ask for money laundering documents and need to keep an eye on suspicious transactions

Jun 11, 2015

Under Irish and EU law solicitors are legally obliged, like banks, to be aware of the above. recently, a plenary session of the European parliament voted the 4th Money Laundering Directive into law in Strasbourg on Wednesday 20 May, 2015. Ireland will have to transpose this update into our existing laws over the next short while.

The Law Society or England and Wales has just published recent examples of money laundering :-

Gang members found guilty of money laundering in diamond network scam (Enfield)

Two gang members have been found guilty of money laundering after being involved in a criminal network that sold diamonds for 30 times their value. A 30-year-old woman and a 52-year-old man were convicted for helping to con £1.5m from at least 50 people across the UK. Much of the monies taken from victims was funnelled off by the gang to accounts held overseas, with tens of thousands of pounds also being spent on luxury items in stores such as Harrods and Selfridges.
Gang jailed for fraud and money laundering (Lincolnshire)

A gang based in Lincolnshire who made more than £10 million selling fake Viagra through a bogus mail order business has been sentenced. The gang collected the monies in more than 100 bank accounts in the UK and abroad. The 47-year-old woman in day-to-day control of the operation was sentenced to three years and 10 months for money laundering, two and a half years on another count of money laundering and 15 months for conspiracy to supply.
Father and son convicted of laundering £20 million (Surrey)

A father and son have been convicted of laundering millions of pounds of British taxpayers’ money in offshore bank accounts. The pair laundered some of the money gained from an operation orchestrated by a couple of Kent fraudsters who set up fraudulent companies to buy and sell carbon credits, and kept the VAT charged to their clients. The father and son pair disguised the money obtained through the scam in the sum of £20m.
Drug dealer jailed after struggling to keep up payments on his mortgage (Greater Manchester)

A man from Altrincham is beginning a 16 year jail sentence after admitting supplying class A and B drugs between 2012 and 2014, plus money laundering, fraud and benefit fraud offences dating back to 2004. The 56-year-old struggled to meet the £3,000 a month repayments on the mortgage of his £820,000 house, which he obtained through mortgage fraud. He was first arrested in 2013 for laundering £450,000 of cash and lying to loan companies to buy a BMW.
Waiter charged with fraud and money laundering (Sussex)

A 34-year-old waiter has been charged with two counts of money laundering and one count of conspiracy to commit fraud. It is alleged that he conspired with others to trick victims into transferring large sums of money to bank accounts under his control then quickly withdrawing the money and purchasing high value jewellery, gold bars and electrical goods. He is due to appear in court later this month.
Money laundering wife of drugs baron spared jail (Wolverhampton)

The wife of a major drugs dealer has been spared jail but has been sentenced to a suspended 2 year jail sentence and 240 hours of unpaid work. The mother of three had been given £40,000 by her husband before he left the country. She also admitted to being in contempt of court by selling a Mercedes SL320 in contravention of a restraining order.


There are consequences for solicitors when they disregard their money laundering obligations, as the following UK solicitor discovered :-

SRA v Andrew Donald Varley

Decision number: 10763-2011
Decision date: 24 April 2015

Summary: The Respondent failed to identify the indicators of property/mortgage fraud/money laundering further to the documented link between the buyer introducer and mortgage broker, and the payment of money on the introducer’s instructions to unknown and unidentified third parties.

The SRA argued that the Respondent showed a reckless disregard for his money laundering obligations in paying over £1m to third parties on instructions from the buyer introducer who he never met.

The Respondent also accepted validations of identity from the mortgage broker without any further enquiry, despite the documents showing that there was a link between the broker and the buyer introducer.

Sanction: The Tribunal found that the Respondent had failed to comply with the Money Laundering Regulations by ignoring clear indicators of suspicious behaviour and carrying out no due diligence investigations regarding third parties.

The Tribunal agreed that this showed a reckless disregard of the money laundering obligations whether or not the Respondent was truly unaware of the classic indicators of mortgage fraud and money laundering.

The Respondent was struck off the Roll of Solicitors and ordered to pay costs of £30,000.

** Appeals may have been lodged subsequent to publication.



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