Solicitors are ‘prickly’ when subjected to criticism, the man leading the fight against economic crime told the Law Society’s anti-money laundering (AML) and financial crime conference today.
Donald Toon, director of economic crime command at the National Crime Agency (NCA) told delegates that the agency was taking a particular interest in solicitors, the ‘overwhelming majority’ of whom were honest, because criminals required ‘witting or unwitting help’ from professionals to set up shell companies, trusts and other instruments to hide the proceeds of their crimes.
He said: ‘Perhaps £100bn a year is laundered through the UK financial sector, nearly all of it reliant on access to services provided by professionals, such as accountants and solicitors.’
The latter, Toon was ‘sorry to say’, were the worst offenders for submitting unsatisfactory suspicious activity reports (SARs).
He gave the example of one firm’s submission that reported ‘no illegal activity’ and no ‘suspicious funding’, the money coming from an established bank and building society. It also failed to give the address of the property the firm’s client proposed buying.
Vigilance was required, he said, instancing an advertisement placed by someone wanting to buy a conveyancing firm with CQS and a ‘clean bill of health’. It was more than likely a legitimate business proposition, he stressed, but it could be a money launderer setting up arrangements to hide funds. Toon wondered: ‘How long does it take to go from being a clean firm to being prosecuted as the opposite and how much money can be laundered in the meantime?’
Devereux Chambers barrister Jonathan Fisher QC echoed Toon’s assertion that most solicitors were honest and decent. ‘Some, however, turn a blind eye to AML,’ he said, ‘in particular the rainmakers who are out there getting business. Others are careless, a few are stupid and even fewer are dishonest.’
Fisher continued: ‘Accountants make very few reports, estate agents are a joke and the banks turn a blind eye and are careless.’
Fisher’s comment elicited laughter from the delegates. However, it was short-lived for Toon returned to the subject of the ‘very few black sheep’ in the solicitors profession and urged practitioners to ‘concentrate on the quality’ of their SARs.
A delegate’s complaint that Toon was unfairly picking on solicitors who spend considerable time and money on trying to comply with AML regulations was met with: ‘You are happy to laugh at estate agents and banks, but get prickly at the merest hint of criticism of yourselves,’ he said.
Another delegate ventured: ‘It is costing each of us at this conference thousands of pounds a year for AML compliance, yet 11 years since we first asked for it, we still haven’t got the right form for submitting SARs.’ Was it just ‘lethargy and IT problems’, she asked.
Toon said he took exception to the delegate’s implication that ‘the NCA has employed someone for 11 years to produce a form’. It was a ‘childish’ criticism, he said, before adding that he could not give a date for the form’s completion. ‘Its pre-history is difficult,’ he explained. ‘It is not an issue that has been ignored.’
Some 300 solicitors attended this year’s anti-money laundering and financial crime conference, titled Stepping-stones to major change.