Solicitor jailed
In February 2013, a solicitor was jailed for 10 years for receiving the proceeds of crime following an immigration scam.
The scam involved women being flown in from eastern Europe to marry men from non-EU countries who had paid the firm up to £14,000. The women were flown out the following day. The scam was uncovered after police broke up a money laundering and drugs racket in London.
The solicitor was convicted of receiving the proceeds of crime and conspiracy to breach immigration law. Two immigration advisers who worked at the firm were convicted of receiving the proceeds of crime, and another was convicted of money laundering in his absence after fleeing the country.
While in this case the solicitor and the immigration advisers were found to be complicit in the fraud, to the point of helping fabricate fake documents in support of the applications, it is possible that solicitors could be unwittingly involved in assisting immigration fraud and associated money laundering.
Money laundering risks
In the UK, money laundering is not just about hiding the proceeds of crime, it can also involve simply having it in your possession or spending it.
If your firm is targeted by organised criminals who are seeking to engage in immigration fraud, whether through sham marriages or just fraudulent visa applications, you could be at risk of committing a money laundering offence or a failure to make a suspicious activity report.
If you receive funds from an organised crime group to pay for your services, you are at risk of receiving the proceeds of crime, and if you use those funds to pay for visa application fees you are at risk of transferring the proceeds of crime – both of which are money laundering offences.
You do not have to know that you are dealing with the proceeds of crime in order to commit a money laundering offence, you merely need to suspect that you are doing so.
Usually, undertaking a fraud is the creation of the proceeds of crime but if you suspect that you are being used by an organised crime group, their income will almost certainly be derived from other criminal activity, so will already be the proceeds of crime.
There is a defence for:
- receiving the proceeds of crime for normal legal fees and
- not making a suspicious activity report where the information causing the suspicion is privileged,
but these defences are not available where your conduct assists with a crime.
Identifying areas of concern
Providing immigration advice and assisting with immigration applications is not work that is covered by the Money Laundering Regulations 2007, so you are not required to conduct client due diligence on immigration clients.
However, in order to complete the application forms for visa applications, your client will need to provide a lot more personal information than just the passport usually required for client due diligence purposes.
Fee earners should already be looking closely at the documents provided, to assess the adequacy of the supporting evidence for the application as well as to notice any inconsistencies which the UK Border Agency would be likely to query.
Fee earners should also be alert to any indicators that a client is the victim of trafficking as part of their general assessment of the client's case.
These same factors will assist in identifying if you are being used to assist with immigration fraud and are possibly becoming involved in money laundering as well.
Protecting your firm
It is good practice to appoint a Money Laundering Reporting Officer (MLRO), who can consider the risks for your firm, deal with queries and make reports where required.
When training your staff on immigration fraud and trafficking risks, you should point out that money laundering may also be occurring and that they need to bring any indicators to the MLROs attention.
The MLRO will need to carefully consider:
- the source of funds being used to pay the firm's fees and disbursements,
- the risk of committing immigration offences and money laundering offences,
- whether the information giving rise to the suspicion is subject to legal professional privilege, or if the crime/fraud exemption applies,
- whether the firm can continue to act for the client, and
- whether the firm will need consent from the Serious Organised Crime Agency to return any fees already paid.