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Any reason not to act ?

Client released from goal for money laundering has approached me to act for him again.

Didn't find your answer?

Former client  released from goal for money laundering was able to buy  a house without mortgage. He then  resold in very short period making a large capital gain. No proceeds of crime order made at time of sentencing. All transactions through solicitors and property auctions. Any reason not to act for him ? 

Thanks for advice.

 

 

 

Replies (32)

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By Wanderer
21st Sep 2020 17:18

Quote:

Any reason not to act for him ? 

Because he's a criminal that's been involved in money laundering?
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Red Leader
By Red Leader
21st Sep 2020 17:19

Why on earth do you want this work?

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David Winch
By David Winch
21st Sep 2020 17:22

You can certainly act for him / her.
Your 'problem' is that you now need to consider whether you suspect the property purchase & sale involves any money laundering (by the client or anyone else).
If you do, you are obliged to submit a Suspicious Activity Report to the NCA (whether you take him / her on as a client or not) unless one of the exemptions apply (such as 'PoCA privilege').
If you don't make a SAR then I suggest you make a file note to record that you have considered the issues and how you arrived at the conclusion that no SAR was required.
Bear in mind that there is a real chance that the boys in blue will spot these transactions anyway and be knocking on his door & his solicitor's door. You don't want to find yourself embarrassed if stuff hits the fan.
David

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Replying to davidwinch:
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By Wanderer
21st Sep 2020 17:24

Quote:

You can certainly act for him / her.

However the OP's question wasn't "Can I act for him", it was "Any reason not to act for him ?".
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By jonharris999
21st Sep 2020 18:48

Yes - because it would be an own gaol. :)

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Replying to jonharris999:
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By sammerchant
23rd Sep 2020 16:12

Am I my brother's keeper?

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By Open all hours
21st Sep 2020 18:49

Client released from ‘goal’. Assume he was between the sticks for Chelsea yesterday. Early release beckons for that one.

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My photo
By Matrix
21st Sep 2020 18:52

Selling properties within a short time and making a large gain could mean he is trading. I wouldn’t take the client on since, among other reasons, I don’t think I could trust any of the answers to the question of how he made a large gain in a short time in the current market.

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By Cheshire
21st Sep 2020 19:28

Quote:

Former client  released from goal for money laundering was able to buy  a house without mortgage. He then  resold in very short period making a large capital gain. No proceeds of crime order made at time of sentencing. All transactions through solicitors and property auctions. Any reason not to act for him ? 

Thanks for advice.

 

 

 

''Any reason not to act for him ?''

To maintain self respect and not set the bar so low.

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Psycho
By Wilson Philips
21st Sep 2020 21:24

Knowing nothing about the individual, I would say no professional reason

However, on the basis that a leopard can’t (or won’t) change its spots ...

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By Calculatorboy
21st Sep 2020 22:06

Wide berth , who would want the potential hassle

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By Tosie
21st Sep 2020 22:47

I agree with all the advice that you have received but would add that the fact that you are asking the question indicates that you know that it would be madness to get involved in this situation. It will be the first of many transactions and he will alert his friends who will expect you to act for them. You mention that the transactions were all through property auctions, this seems to indicate some form of conspiracy with careful planning. You state former client, you may well be under the radar if the money laundering took place in a business for which you prepared the accounts. We are very fortunate to have David Winch's support on this site and as always he has given you excellent advice. Good luck, not a good place to be.

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By Tosie
21st Sep 2020 22:48

duplicated.

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By DJsy
22nd Sep 2020 09:08

Short answer: Our firm wouldn't touch this.

Longer answer: Does your client risk assessment allow you to take on known money launderers, and if so how are you addressing this risk? Presumably with very regular monitoring (daily automated screening to external data sources, reviews of his personal finances including personal bank statements, very frank discussions with him, possibly getting an independent security expert or private investigator to prepare a bespoke report, etc)?

If you aren't doing a client risk assessment, what is the point in doing CDD at all? Would you accept anything regardless of the risk? Where is your red line?

Compliance for these kinds of client will cost more than the work itself. Will the client pay for this?

Rapid profit from a property flip is a very common form of money laundering. Who did he sell the property to? Who did he buy it from? Are any of them in any way related to him? How on EARTH did he get a mortgage?! (was it a private mortgage?)

Solicitors are no guarantee that there isn't money laundering involved. They are no better than accountants at spotting it, and judging by your own query on this you should think hard about whether you should do this work - maybe they thought they should accept because he has an accountant(!).

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Replying to DJsy:
David Winch
By David Winch
22nd Sep 2020 09:28

A useful response IMHO.
Yes (I hope it goes without saying) that in the context of a previous money laundering conviction a property purchase, followed by a rapid sale at a significantly higher price, would cause me to ask a series of questions. It may be perfectly legit - or it may be a set up to transfer value to the client (i.e. a form of money laundering exercise).
It occurs to me that this person may have wanted to divest himself of wealth prior to the criminal proceedings and re-acquire it later.
Looking at this from a different angle, people who have significant criminal convictions may be trying to operate a wholly legitimate business and need an accountant to help with their routine tax returns. In practice many firms will not take on such clients.
(I don't myself deal with the preparation of annual accounts & tax returns.)
David

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Replying to davidwinch:
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By Biggsy2020
22nd Sep 2020 09:37

Well don't get significant criminal convictions in the first place! Accountants, especially qualified ones, gain enough bad press without looking for it.

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Replying to DJsy:
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By bernard michael
22nd Sep 2020 09:39

Quote:

Short answer: Our firm wouldn't touch this.

Longer answer: Does your client risk assessment allow you to take on known money launderers, and if so how are you addressing this risk? Presumably with very regular monitoring (daily automated screening to external data sources, reviews of his personal finances including personal bank statements, very frank discussions with him, possibly getting an independent security expert or private investigator to prepare a bespoke report, etc)?

If you aren't doing a client risk assessment, what is the point in doing CDD at all? Would you accept anything regardless of the risk? Where is your red line?

Compliance for these kinds of client will cost more than the work itself. Will the client pay for this?

Rapid profit from a property flip is a very common form of money laundering. Who did he sell the property to? Who did he buy it from? Are any of them in any way related to him? How on EARTH did he get a mortgage?! (was it a private mortgage?)

Solicitors are no guarantee that there isn't money laundering involved. They are no better than accountants at spotting it, and judging by your own query on this you should think hard about whether you should do this work - maybe they thought they should accept because he has an accountant(!).


The OP said without mortgage. That makes it worse
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Replying to bernard michael:
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By DJsy
22nd Sep 2020 13:31

Sorry, misread. I agree - much worse. Source of funds and source of wealth...? I wouldn't waste time even looking further into it - enough red flags to walk away and sleep easy.

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By bernard michael
22nd Sep 2020 09:44

Correct me if I'm wrong David but I believe Justice Goddard said that even prostitutes are entitled to legal representation.

That doesn't mean it has to be the OP who should make his excuses and refuse to act. Blaming AML is an obvious one which the potential client would understand as he has some experience in the matter
I assume there is is no threat involved in the request to act!!

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Replying to bernard michael:
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By DJsy
22nd Sep 2020 13:37

Lawyers are protected when acting for criminals. They also enjoy client privilege (clients can talk frankly and openly without risk of prosecution). Accountants enjoy neither legal protection nor client privilege.

There are other, free, public services that might help him do his own tax returns which OP could direct the client towards.

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Replying to DJsy:
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By Wanderer
22nd Sep 2020 13:53

Quote:

Accountants enjoy neither .................... nor client privilege.

They do in certain circumstances relating to money laundering and with certain qualifications.
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Replying to Wanderer:
David Winch
By David Winch
22nd Sep 2020 15:17

We can have 'PoCA privilege' under s330 PoCA 2002. That means that, in certain circumstances, we don't have to submit a SAR where we have an (otherwise reportable) suspicion. It doesn't go further than that though (unlike a lawyer's legal professional privilege).
David

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Replying to davidwinch:
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By Wanderer
22nd Sep 2020 14:49

Yep, that's the one I was referring to.

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Replying to bernard michael:
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By Comptable
23rd Sep 2020 10:33

"....even prostitutes are entitled to legal representation."
As I understand it, prostitution, unlike money laundering, is not a crime.

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By Justin Bryant
22nd Sep 2020 10:05

This may explain the current property price bubble as criminals generate SDLT free laundered money!

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By Ruddles
22nd Sep 2020 20:50

I can think of one accountant (sorry, bookkeeper) that would take him on. They’d be well-suited.

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By MRsoton
23rd Sep 2020 09:32

Sounds far too much hassle and risk.
Let someone else have the problem

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By MRsoton
23rd Sep 2020 09:32

Sounds far too much hassle and risk.
Let someone else have the problem

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By Ammie
23rd Sep 2020 10:28

I think, deep down, you know the answer.

Possibly looking for some sort of acknowledgement that it would be alright to proceed with the engagement, maybe?

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By petestar1969
23rd Sep 2020 11:28

I would tell him to do one, or words to that effect.

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Morph
By kevinringer
23rd Sep 2020 13:06

I have a barge-pole to lend you

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By Cardigan
23rd Sep 2020 14:05

I think the real question is: Any reason TO act?

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