Lawyers accused on terror cash

The Guardian (UK) ^ | 8-10-02 | Nick Hopkins, crime correspondent

[Oldeconomybuyer]

The hunt for terrorist and criminal money launderers is being undermined by the continuing refusal of some lawyers and accountants to report potentially suspicious transactions by their clients, the country's leading economic crime investigator warned yesterday.

Jon McNally, head of the economic crime unit at the national criminal intelligence service, admitted he was "frustrated" that the two professions had done relatively little to help the police since September 11.

He accused many firms of not making appropriate checks to ensure their clients were honest people dealing with legitimate funds.

Thanks mainly to the diligence of the major banks following the atrocities in the US, the number of suspicious transactions reports (STRs) soared to 31,251 last year, up 13,000 from 2000.

But only 1%of the total were referrals from lawyers, the lowest figure for three years. The number of reports from accountants was even more derisory - 0.35%, half the amount of 1998.

Figures show that motoring organisations such as the AA and the RAC have submitted more reports than accountants in recent years.

Mr McNally warned the police would not hesitate to use new laws to prosecute lawyers and accountants who failed to show "due diligence" by effectively turning a blind eye to corrupt activity. "Half of all money laundering cases involve funds handled by solicitors or accountants, yet the number of reports we get from them is low.

"There's no doubt that some firms could be more diligent. They have to understand where money is coming from and where it is going to. Solicitors and accountants need to know their customers."

Mr McNally said the professions "may benefit from an independent review" of their practices. "In other areas (involving finance), risk managers look out for the possibility of money laundering. I'm not aware that this happens in the legal profession. Lawyers keep very much to themselves."

The national criminal intelligence service relies on reports of suspicious transactions to identify money launderers. The agency assesses reports from financial institutions and decides whether they should be passed to the police for further scrutiny.

Police, customs and the security services regard the work as vital because they believe that tracing the funds of criminals and terrorists is the key to stopping their activities.

After September 11 fears that terrorists might be laundering money through the City was one factor in the massive in crease in the number of suspicious transactions reports filed in the last quarter of 2001.

Sixty-two per cent of the STRs came from banks, 15% from bureaux de change and 7% from building societies.

Proceeds of crime legislation has tightened the rules on failure to disclose suspicious activity, and Treasury regulations due to be enacted next June could mean that all big legal and accountancy firms will have to employ in-house money laundering investigators.

The Law Society said it issued advice to firms earlier this year about improving STR disclosure.

"I have no doubt that some City firms are being used by money launderers," said a spokesman. "But there isn't a huge number of solicitors out there trying to suppress information. Money launderers are clever people. They tend to be very good at looking normal and providing convincing stories about where their money has come from."

The Law Society is confident that the national criminal intelligence service's target for next year will be reached and that firms will become more diligent.

Banks were under a greater obligation to file STRs because of laws governing their activities, the spokesman said. "We are behind the banks in this area, but we will catch them up. It's an education process. Most of the big firms now employ specialists to help them identify money launderers."

[Freedom'sWorthIt]

Thanks for the post. This is not really a surprise. What group is the leading financial supporter of the Clintonista Crime Family --- which"organization" was most complicit in pumping both the stock market zoom bubble and in ignoring the terrorists efforts to kill us?

The accountants - well as we have learned - most of them are also bought and paid for by the same Corrupting Criminal Mafia masquerading as a political party.