Money Laundering Lawyers’ Basic Guide to the Law

conspiracy to defraud

Money Laundering – the real criminals are often never targeted

Perhaps few money laundering lawyers know that the term ‘money laundering’ originated in New York where the Mafia used laundromats as a way to clean illegal money by overstating the cash income of these businesses in the accounts. It was almost impossible for the authorities to prove that the income stream from those businesses was not the true revenue. The story has evolved and continues to the present day. As long crime makes money, methods will be needed to make it look legitimate before it can be of any real use.

One of the most unfair aspects of a money laundering prosecution is that the defendants are often not serious criminals, but are people caught up in the investigation because of their closeness to other people in the case. At Mary Monson Solicitors, we have criminal lawyers who specialise money laundering cases and do many of these cases every year. We understand the stress that a person faces when he or she is targeted in this way by the state. We offer our support, our expertise, and an aggressive defence against the criminal investigation.

Our Money Laundering Lawyers’ Case Study

For anyone who finds themselves subject to a money laundering investigation we have included a case study of a case we have acted in recently.

“Boiler suit” men

Our client was a wife of the leader of the so-called ‘boiler suit robbers’. Her husband had been convicted in a conspiracy to rob dozens of high-end jewellers of millions of pounds in watches and diamond jewellery in London and the South East.

Our client was accused of helping him in the running of the operation. Our solicitor advocate and barrister negotiated aggressively with the prosecution on her behalf and all but two charges relating to money laundering were dropped. The court accepted what we said: that her criminal involvement was minimal. Result: 1 year suspended sentence – Client walked free.

What Exactly is Money Laundering?

Money laundering is the process by which ‘dirty’ money from the proceeds of criminal conduct is ‘cleaned’ so that it looks like it comes from a legitimate source.

It varies in its level of sophistication from simply taking a suitcase of money to a country which is less interested in the source of the wealth to using several layers and locations of the international banking system to make the source of money virtually untraceable. A more common and simpler form that specialist money laundering lawyers will regularly encounter involves putting the money through the bank accounts of friends and/or their businesses, who themselves may end up being prosecuted, even if they were not aware of the origin of the money.

The Law

The Proceeds of Crime Act 2002 (POCA) contains the money laundering offences.

The act criminalises three types of individuals:

  1. People who benefit from property obtained from criminal conduct
  2. People who use property obtained from criminal conduct
  3. People who come into possession of property obtained from criminal conduct

Property which represents the benefit from criminal conduct is described as ‘criminal property’. It includes money, shares and any other property. Examples could be bribes or benefits to a business from failing to comply with the law. Money obtained as a result of tax evasion is usually only classed as criminal property if there was false declaration about the profits, not just because they weren’t declared properly.

It is important to remember that the prosecution have to prove the type of criminal conduct which makes the property criminal.

It is important to remember that property cannot be “criminal property” unless the alleged offender knows or suspects that the property is a benefit from criminal conduct, and this is a point that experienced money laundering lawyers will often need to focus on. Criminal conduct is conduct which is a crime in the UK, or would be if it happened in the UK. This means that an offence being committed outside the UK could result in the proceeds being classed as criminal property in the UK.

The Offences

A person does not commit this offence if he obtains criminal property at a fair price. Therefore a retailer would not commit this offence if he is paid for goods with what he suspects is criminal property.

Notifying the Authorities – Authorised Disclosure

A person may have a defence to any of the above money laundering offences by informing the police, customs or a nominated officer about the suspicious transaction they are involved in. This is called an “authorised disclosure”. It gives the person protection from prosecution and allows him or her to carry on with the transaction. The logic of this procedure is that other people involved in the transaction might be “tipped off” if the person who wants protection disappears part way through the transaction.

Money Laundering – Lawyers, Other Professionals and Regulated Sector Members – Failing to disclose and ‘Tipping Off

A person operating in the “regulated sector” commits an offence if he fails to disclose his knowledge or reasonable grounds of suspicion of possible money laundering. The regulated sector includes financial and legal advice and banking but also the activities of casinos and estate agents. Legal advisers advising clients confidentially about a case are not committing and offence if they fail to disclose information about money laundering.

An offence may happen when a person knows or suspects that a disclosure has been made by a professional to the state regarding the suspected money laundering activities of another person, and ‘tips off’ that person. He or she commits an offence if the tipping off is likely to harm any investigation that might follow. The offence is only committed if the ‘tipper off’ receives the information while doing business in the regulated sector. Genuine legal advice is not part of the offence unless the tipping off is done with criminal intent (S.333 of POCA).

Sentences for Money Laundering

The maximum sentence for the money laundering offences is 14 years imprisonment. Sentences near the maximum are rare, but do happen. They are usually reserved for more serious cases, where the laundering has been going on for a long time, is for a very large amount of money, or is part of a sophisticated criminal operation. Drugs-related laundering often results in more serious sentences.

Where the laundering is a ‘one-off’ action, is for a comparatively small amount of money, or the defendant is not part of a criminal gang, but involved through naivety or by virtue of being the spouse of another defendant, much shorter sentences are more common. In these types of situation, a well handled damage limitation strategy by experienced money laundering lawyers may result in a community sentence, rather than prison.

Sentences for failing to disclose and tipping-off are substantially shorter. The maximum is 5 years. Custodial sentences are common, and the Court of Appeal says that 6 months imprisonment is appropriate for a solicitor who acts in a conveyancing transaction while having grounds to suspect that money laundering is taking place.

Strategy in Money Laundering Cases

There is no set strategy which will work every time in a money laundering prosecution. Money laundering is often charged with a number of other offences related to fraud, theft, drugs, or other high value criminal activity. Much will depend on the evidence of those defences.

In large criminal conspiracies, where the main criminal or criminals are at some distance from the person charged with money laundering, the money laundering defence solicitor may be able to show that monies or assets were held or transferred unknowingly, which will result in a not guilty verdict. Sometimes the defendant is a friend or family member of another more deeply implicated defendant, and did not question the transaction because of he or she trusted that it was all above board. In this type of situation, the nature of the relationship should be focused on and portrayed skillfully to the jury to explain the client’s involvement.

Forensic Accountants assisting the Defence Solicitor in a Money Laundering Case

In situations where there is evidence of large amounts of money being transferred, a forensic accountant is nearly always necessary. It is important that the accountant has experience of acting as an expert witness, and has experience of analysing accounts where there is alleged criminal activity. The forensic accountant will provide a report, and could appear as a witness. For money laundering cases this may be particularly relevant. This is because everything may depend on how the jury views a bank account money trail or business accounts records, and this may be influenced by a good accountant instructed by the defence solicitors.

Not Guilty or Damage Limitation?

It should always be the aim of money laundering lawyers acting for the defence to try to find a path out of a criminal case which results in his or her client avoiding any conviction or punishment. Every avenue must be followed, and no stone must be left unturned in that fight. However, in some cases, the evidence is overwhelming. Sometimes clients have admitted the offences in interview, or evidence of them and their bank accounts leaves no way out. Where this is the case, the entire focus may shift towards avoiding a prison sentence, even if the client has to accept entering a guilty plea.

In some circumstances, clients in money laundering cases may receive suspended sentences or community sentences, and not go to prison. For there to be a chance of this happening, the defence must present a picture of the defendant to the judge beyond the offences admitted. The picture must show the offence(s) in the context of the client’s family background and situation, any illnesses or other difficult situations that have acted on them leading up to the offence. This personal mitigation may end up making the difference between a 2 year prison sentence and a one year suspended sentence.

There may also be the chance for the defence solicitor and barrister to negotiate with the prosecution on the client’s behalf, forcefully yet diplomatically, pushing for a lower charge or less serious slant on the facts from the prosecution. This may help turn a serious case involving a longer sentence into something less serious, resulting in a lower sentence or even a community sentence. Of course, every case is different, and there are no guarantees. The most important thing is to find the right legal team, and work with them to make as much progress as possible before the trial or sentence.