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Money Laundering

Analysing accounts and found serious problems

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I am in the process of analysing accounts for a solicitor on behalf of one of their clients.

Found some really serious problems. Do I report? or as I was engaged by the solicitor to do the work does the solicitor do the report? 

A lot more involved than I can write here obviously,  just not sure who should do the reporting.

Can't reply as anonymous so have added this.... I believe my findings will be used in court and the accountant will be included.

The solicitor is definitely not "dodgy" but I believe the accountant is.

5th November 2018 - Just to update on this - court case is now over but the issues found were not raised in court so as to protect an innocent party (will update again with further details). Question I now have is - while the info was not reportable as per David Winch's reply below is this still the case? Do I/can I now report because the substantial fraud (£200k+ lost tax) was not brought up in court? The accountant was 100% involved/helped in this fraud.

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RLI
By lionofludesch
04th Feb 2018 17:07

I'm guessing that you won't want to answer any supplementary questions on here so I'm just going to say -
you.

If you've found sufficient evidence of suspicious activity, you need to report it.

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David Winch
By David Winch
04th Feb 2018 18:33

Possibly neither of you should report (or possibly both of you should).
Is your suspicion based on information which has come to you in "privileged circumstances" as defined by s330(10) PoCA 2002? For example has the information been communicated to you in connection with legal proceedings or contemplated legal proceedings? If so you should not make a report.
If in doubt you can seek advice from your professional body or from the solicitor who instructed you as to whether 'PoCA privilege' under s330 applies.
David

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Replying to davidwinch:
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By Mr_awol
05th Feb 2018 10:05

Quote:

Possibly neither of you should report (or possibly both of you should).
Is your suspicion based on information which has come to you in "privileged circumstances" as defined by s330(10) PoCA 2002? For example has the information been communicated to you in connection with legal proceedings or contemplated legal proceedings? If so you should not make a report.
If in doubt you can seek advice from your professional body or from the solicitor who instructed you as to whether 'PoCA privilege' under s330 applies.
David

Hi David,

Out of curiosity would/could asking the solicitor if PoCA privilege applies constitute a tipping off offence if asked retrospectively? Obviously in hindsight it would be wise to ask before commencing work on behalf of solicitors as a matter of course - but most of us probably don't do this type of work all that often.

My reasoning is that if the OP has undertaken their task and go back to the Solicitor and ask the question, then that is a pretty clear indication to the solicitor that a report is likely. Obviously if you ask up front it forms a generic pre-engagement enquiry and doesnt convey the same message.

So, would the OP be better in the case simply to report factual information to the solicitor (who can then consider privilege in terms of their own obligations) and then not mention ML in any shape or form - instead taking advice from the(ir) Institute solely? Or is that unnecessary and he's fine to make the enquiry now?

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Replying to Mr_awol:
David Winch
By David Winch
05th Feb 2018 11:01

I am not sure what you mean by "asked retrospectively".
I do not see any 'tipping off' problem in discussing the OP's findings & concerns and whether or not to make a report with the instructing solicitor unless the OP suspects the solicitor is 'dodgy'.
David
P.S. There are differences, as a matter of law, between the OP's reporting obligations and the solicitor's reporting obligations (because the solicitor may not be acting within the 'regulated sector', may be providing 'legal' advice where the OP may not, and has common law legal professional privilege as well as 'PoCA privilege' under s330(10)).

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Replying to davidwinch:
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By Mr_awol
05th Feb 2018 11:56

Thanks David.

By 'asked retrospectively' I mean the following timeline:
1) Solicitor requests service and agrees terms
2) Accountant carries out analysis/investigative work etc
3) Accountant asks "BTW is this covered under privilege as far as my ML obligations go"

In the above example, it is easy for the solicitor to deduce that the accountant has ML concerns, and as such the accountant has pretty much told the solicitor aware that (depending on the response) a report is likely.

If, on the other hand, item three was clarified as part of item one, then the accountant is free to report (or not as the case may be) and can simply provide the solicitor with the factual analysis requested. Then it's up to Sol to decide if they have any reporting obligations or not*, but acc doesn't care by then.

* In answer to the p.s. - yes I am aware, which is why I said the sol can then go away and consider their own obligations, of which the OP need not concern himself

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Replying to Mr_awol:
David Winch
By David Winch
05th Feb 2018 12:22

The OP has added that his findings "may be used in court". So it is clear that s330(10)(c) PoCA 2002 applies.
So my advice would be that the OP should not file a suspicious activity report - the information on which his suspicion is based has come to him in "privileged circumstances".
It is equally clear that s330(11) does not apply as the information was not communicated to the OP with the intention of furthering a criminal purpose.
David
P.S. Also the solicitor should not report.

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