UK lawyers warned on US anti-money laundering laws

UK lawyers face the increasing danger of becoming entangled in anti-money laundering suits as US regulators pursue aggressive new tactics, according to former Fraud Squad detective Rowan Bosworth-Davies.

Bosworth-Davies, who now specialises in financial crime at Titmuss Sainer Dechert, said he had evidence that US prosecutors had used undercover investigators to track down money launderers in the UK.

Other tactics, he said, would increasingly include extraditing suspects from foreign jurisdictions even though the crimes were committed in their home country.

“Most banks have branches in New York and most businesses now clear money through New York,” he said. “That entitles the New York authorities to prosecute. Lawyers have to be particularly careful about money moving through client accounts.”

Bosworth-Davies cited the successful prosecution in New York last month of the Venezuelan Castro family, who were accused of defrauding Venezuelan investors. The US was able to prosecute because the Castros had exchanged currency in New York banks.

“The fact that it was Venezuela was irrelevant,” said Bosworth-Davies. “The crime could just as easily have taken place in London or Glasgow or Edinburgh.”

The new measures have been implemented following an executive order by President Clinton last year to get tough on foreign jurisdictions that were not cooperating on anti-money laundering measures.

The New Orleans trial and acquittal in late 1994 of English sports lawyer Mel Stein, whose client, Cuban businessman Carlos Miro, was jailed for fraud for almost nine years, was an example, said Bosworth-Davies, of how lawyers could get caught up in US actions.

Titmuss Sainer is hosting a seminar next month at which the Manhattan assistant district attorney John Moscow will explain the implications of the new measures.