The High Street Solicitor and the Proceeds of Criminal Activity — The Risks
| Pages | 5-15 |
| Date | 01 January 1997 |
| Published date | 01 January 1997 |
| DOI | https://doi.org/10.1108/eb027115 |
| Author | Andrew Campbell |
| Subject Matter | Accounting & finance |
ANALYSIS
The High Street Solicitor and the Proceeds of
Criminal Activity — The Risks
Andrew Campbell
Journal of Money Laundering Control 1/1
INTRODUCTION
In this article attention will focus on the risks to
high street solicitors in England and Wales who
handle money on behalf of clients which may be
the proceeds of criminal activity. There are many
difficult issues involved and some of these will be
discussed.
Two areas of criminal law which are of particu-
lar importance to the issue of handling money
which is 'hot' or 'dirty' are the anti money-laun-
dering provisions and the recently introduced con-
fiscation orders.1 This article concentrates on the
anti money-laundering provisions and these will be
considered from the perspective of the small firm2
which may possibly be involved in handling the
proceeds of illegal activity.
Professional criminals, and certainly those
involved in organised crime, will be aware of the
requirements of the money-laundering legislation
and the risks involved in attempting to channel the
proceeds of crime through the banking system.
The banks, building societies and other financial
institutions have in place procedures for reporting
suspicious transactions and will have money-laun-
dering compliance officers to investigate such
reports. Additionally these financial organisations
will have provided staff with training and new cus-
tomers will have to provide proof of identity
before an account can be opened.3 Accordingly,
those who wish to move 'hot' funds will perhaps
be wary of directly using the banking system. The
banking system will have to be used at some stage
but criminals may look for ways to make trans-
actions appear legitimate before the funds enter the
banking system. Monty Raphael, when addressing
the International Bar Association noted:
'While clearly the financial institutions of the
world will remain in the front line of the war
against money laundering, nonetheless the last
half decade has seen many cases where almost
any kind of capitalist enterprise may be used for
the purpose of cleansing illegal profits. Indeed,
when one considers the amount of dirty money
which is looking for a home each year, it is
self-
evident that criminals, and those who service
them, will use every conceivable form and
method to achieve their ends. These must
include the subversion of the legitimate banking
commercial and professional order. In so far as
lawyers play an essential role in most banking
and non-banking commercial activities, and in
so far as money launderers have devised tech-
niques, lawyers are inevitably engaged, however
inadvertently, in the process of money launder-
ing.4
The use of solicitors to undertake apparently legiti-
mate transactions is capable of providing the type
of cover required. The Brink's-Mat robbery serves
as an illustration of the way in which the services
of a solicitor can be used. Michael Relton assisted
in laundering more than £1.7m by investing the
money in various places, including developments
in London's docklands and various other property
deals.5
This was a high profile case but it serves to
illustrate that channelling funds through a legal
firm is an attractive option for criminals.
As will be seen there are different types of risk
involved for the high-street solicitor. The solicitor
who is overly suspicious of the activities of his or
her clients might lose business while on the other
hand failure to take appropriate action could lead
to both damaging publicity and possible criminal
liability. A criminal conviction will inevitably lead
to being struck off. Accordingly solicitors can find
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