Money Laundering: court trial could put people off being reporting officers, say lawyers

The prosecution of a money laundering reporting officer (MLRO) who is alleged to have proceeded with a money transfer before receiving permission to proceed from the National Criminal Intelligence Service (NCIS) could lead to a shortage of people willing to perform the role, lawyers warned this week.


Stephen Judge, former MLRO for spread betting firm City Index, was committed for a Crown Court trial this month. Police allege Mr Judge submitted a suspicious activity report to NCIS, but then consented to the transfer of £30,787 before receiving authorisation to proceed. Mr Judge has pleaded not guilty. The prosecution is thought to be the first of its kind under the Proceeds of Crime Act 2002.


Alison Matthews, MLRO at national firm Irwin Mitchell and a member of the Law Society's money laundering task force, said the decision would put people off the role.


'This highlights the responsibilities and liabilities of the role, and the importance of being very careful about what you do, and how you do it. This case is a scary one, because at the moment we do not know the ins and outs. If the transfer was made before permission was given, it may have been just a mistake, or misunderstanding the law,' she said.


Ms Matthews added: 'It has always bothered me that when this provision was inserted at the committee stage, very late in the day, it was said to be designed to deal with lazy and corrupt MLROs. It was not [originally] designed for people who are trying to do their very onerous job properly.'


A City of London Police spokesman said: 'There is this difficulty [that the prosecution will deter people]. But the rules are there and they were flouted, and that is why we have gone through with this. It is now for the court to decide.'


Simon Robert-Tissot, litigation partner at Barlow Lyde & Gilbert, added: 'This is pretty extreme legislation, and one would hope that the authorities were going to be sensible. If they do not get their prosecution policy correct, it will have an adverse effect on the whole system. Being a MLRO is a thankless enough task as it is. Nobody will want to do it.'


Mr Judge declined to comment.