Money launderers turn their attentions to conveyancing

Conveyancing solicitors were accused of “turning a blind eye to”, and even colluding with, organised crime gangs last week, as organised money launderers targeted property sales as the preferred way to clean dirty money.

The National Criminal Intelligence Service (NCIS), in its annual assessment of serious and organised crime threats, identified conveyancing as the service “in greatest demand” by criminals to launder funds.

“There may be a lack of awareness or curiosity among professionals who may be being used to launder money; some may turn a blind eye, or there may be a degree of collusion,” claimed the NCIS. The number of suspicious activity reports from professionals related to conveyancing rose by 25 per cent in 2002, but the intelligence group reckoned that the figure only represented “a very small percentage of the total”.

Meanwhile, earlier in the month there was further confusion about the situations in which lawyers can inform their clients prior to making a report to the NCIS under the new Proceeds of Crime Act 2002.

The intelligence service published a ‘position paper’ on legal disclosures last month setting down ‘good practice’. Solicitors cannot inform clients if they know or think that the police and other law enforcement agencies are acting. However, there is a defence under Section 342(3) allowing such disclosures. According to NCIS: “This defence is not available where the disclosure is made with the intention of furthering a criminal purpose. The NCIS takes the view that the legal adviser does not have to share or be a party to this intention (which may be held solely by the client) for the defence… not to be available.”

There has been deep concern from white collar crime lawyers that this new paper has considerably undermined the statutory defence. The Law Society is presently looking into whether further clarification is needed.