Firms told of 'cottage industry' in laundering

A leading New York prosecutor has told a London conference that international money laundering is being run through “a cottage industry” of lawyers, bankers and accountants.

John Moscow, New York assistant district attorney and lead prosecutor in the BCCI case, told the gathering in his keynote speech: “There are some very well paid and brilliant people out there working to assist money launderers.”

The high-level discussions at the Institute of Advanced Legal Studies involved some of the leading names in City law firms as well as financial crime investigators.

Firms represented included Herbert Smith, Simmons & Simmons, Freshfields, Clifford Chance, Burton Copeland, Peters & Peters and Lovell White Durrant.

But he said UK lawyers caught up in money laundering were just part of a worldwide web of international fraud.

Moscow told the conference: “British lawyers are only the very, very tip of the iceberg… There is a cottage industry of accountants, lawyers and others.”

But Moscow told The Lawyer in an interview afterwards that the “cottage industry” is centred in the City of London, and that he has come across lawyers who do not know the identity of their clients, and make little effort to find out.

In November, The Lawyer exclusively revealed six City firms were under police investigation for money laundering. The Law Society accused the National Criminal Intelligence Service, which revealed the information, of lawyer-bashing and “talking out the back of their heads”.

Robert Wardle, associate director at the Serious Fraud Office, told the conference he aims to “persuade professionals they should not make a lot of money by laundering other criminal's assets”.

“All too frequently those criminals are professionals, including lawyers, bankers and accountants,” he says: “He is as much a criminal as the person he helps.”

He goes on to warn the unsuspecting lawyer: “Once you have helped a criminal you're in their sway.”