Money laundering: Reports coming from both inside and outside the SRA
The Solicitors Regulation Authority (SRA) made 26 reports of suspected money laundering by solicitors to the National Crime Agency (NCA) last year, involving more than £200m in possible criminal proceeds.
A further 122 matters are being monitored by the regulator’s money laundering reporting officer (MLRO) to track the progress of ongoing SRA investigations which may uncover money laundering suspicions which require reporting in due course.
While all law firms must have an MLRO, it is perhaps less appreciated that the SRA has one too. In a report to this month’s SRA board meeting, the officer, Sara Gwilliam, said that in total 266 matters were escalated to her office for review in the year to 31 October 2020, of which a shade under 10% (26) turned into suspicious activity reports referred to the NCA.
They came both internally from elsewhere within the SRA and directly from third parties, such as banks, law enforcement and other regulators.
Ms Gwilliam said money laundering linked to vendor fraud – where homes are targeted by fraudsters and sold without the knowledge or consent of the true owners – was identified as a key theme in the reports it made.
“I issued a trend alert on this to flag the issue and raise awareness,” she said. “This has been widely shared with law enforcement partners (such as the NCA, police and HMRC), other supervisors, and the legal profession.”
In addition to residential conveyancing, other themes included bogus investment schemes, clients/funds from high-risk jurisdictions, high-risk commodities (notably precious and scrap metals), aborted property transactions, no underlying legal service or purpose for transaction, complex offshore company structures and trusts, and human trafficking and modern slavery.
Ms Gwilliam said her team has expanded its quality assurance work, conducting full file reviews of several investigations cases each month and holding monthly meetings with other staff to discuss issues raised.
“Pro-active working with the NCA has continued during the year to identify any money laundering risks in certain areas of the legal profession or issues with specific firms,” she added.
“This engagement with the NCA means they are sharing more information with us and contributes to our intelligence capabilities and investigation work, which are key priorities in our corporate strategy.”
All staff have to undertake training on money laundering and terrorism financing, with more bespoke training delivered to those teams most likely to encounter matters which should be reported.
The minutes of the meeting recorded Ms Gwilliam confirming that she had experienced “no restrictions or resistance” in undertaking her duties and had “unfettered access to the senior management team and experienced positive engagement and co-operation across the organisation”.
