Tag: Money Laundering Offences

  • Money Laundering Regulations Breaches

    HMRC issue fines for Money Laundering Regulations breaches

    Obliged firms play a vital role in the financial systems of the UK’s economy. They facilitate transactions of significant importance daily. However, that also exposes them to being used for illegal purposes. Therefore, they must always act with integrity and abide by the rules. One of the regulations that they must pay special attention to is the Anti-Money Laundering Regulations.

    For professional firms that provide defined services, the regulations require their anti-money laundering systems and controls meet the UK’s anti-money laundering regime’s requirements. The regulations require these firms to ensure that relevant employees are kept aware of the firms’ policies, controls and procedures and are accountable for their actions. (more…)

  • OFT fines Leicester-based estate agent almost twelve thousand pounds

    The OFT, in its first formal Regulatory penalty, has fined Leicester-based IPS Estate Agents Limited £11,844 for failing to comply with anti-money laundering regulations.

    IPS failed to comply with a number of requirements under the Money Laundering Regulations 2007, including those relating to:

    • verifying the identity of customers
    • keeping appropriate records
    • ensuring that relevant staff are aware of the law relating to money laundering and terrorist financing
    • establishing and maintaining appropriate, risk-sensitive policies and procedures.

    The failures relate to the period between March 2010 and October 2011. The OFT visited IPS premises to check compliance with the Regulations in June 2011 and again in October 2011.

    From the scope of the failures for almost all major areas of compliance to the Regulations you can almost conclude that virtually no compliance of any weight was conducted by the firm with no appropriate management policies and procedures for risk management and the subsequent communication and training of any policies to staff members to fulfill their obligations.

    Kate Pitt, OFT Deputy Director of Anti Money Laundering, said:

    ‘This fine sends out a message to all estate agents that they need to have appropriate measures in place to prevent their business from being used for money laundering or terrorist financing purposes.’

  • 11.07.11 Solicitor Jailed For Corruption

    A Henley-on-Thames based solicitor is serving a 16 month prison sentence for abusing his professional position.

    James Thorburn-Muirhead was sentenced on 29th June after a SOCA investigation revealed his links to a drug dealer, his involvement in the theft of clients’ monies and his failure to disclose information under the Suspicious Activity Reports regime.

    SOCA’s initial interest was in Muirhead’s relationship with convicted drug trafficker Steven Smith and the suspicion that he was involved in laundering the proceeds of Smith’s criminal activity. However, the investigation soon uncovered other serious offences.

    Muirhead had been operating as a sole proprietor solicitor, trading as Thorburn & Co in the affluent Oxfordshire town. Search warrants executed at his offices and home address in July 2007 resulted in the seizure of several hundred conveyancing files along with accounting records and computers. The evidence linked Muirhead with a drug trafficker, but also pointed to other criminality including the misappropriation of money from clients’ accounts.

    In July 2009 Muirhead was charged with 10 counts of theft and false accounting, one count of money-laundering and one count of failing to disclose under the Proceeds of Crime Act. Following a plea bargain offered by his defence team with Muirhead pleading guilty to four counts of Theft and False Accounting and the one count of Failing to Disclose.

    Muirhead’s benefit from criminal conduct was agreed at £196,198.00 and a Confiscation Order was made for the same amount, payable within 9 months. A two year default sentence will apply if he fails to meet that deadline, and he will still be liable to pay the sum. He was also ordered to pay a Compensation Order of £12,666.67 and will pay £25,000.00 towards prosecution costs.

  • 11.02.11 An accountant has been found guilty of tipping off a client under PoCA

    An Accountant has been warned he will go to jail after being found guilty of tipping off a client about a police investigation.

    The stark message to Kishor Doshi, director of Sunderland firm Otax, came after he was convicted of an offence under the Proceeds of Crime Act.

    The jury of eight women and four men at Newcastle Crown Court took just 30 minutes to reach their verdict, after hearing two days of evidence.
    Doshi, of Dunelm South, Sunderland, admitted he rang and told a client that his office had received a police order commanding him to hand over the man’s accounts just hours after he discovered it.

    The order relates to a money laundering investigation by Northumbria Police’s Economic Crime Unit, called Operation Galapagos, into the dealings of the man who cannot be named because of a court ruling.

    But the 60-year-old told the hearing at Newcastle’s Moot Hall that he did not know the document, called a Production Order and authorised by a judge, related to a criminal investigation and was supposed to be kept secret by law.

    Instead, he thought it was part of an ongoing civil inquiry by Revenue and Customs officials and said in interview: “I thought he had a right to know”.

    Earlier in the case, the Tanzanian-born businessman, who has been an accountant for 23 years, told the court he only read the first two paragraphs of the Production Order before he made the first in a series of phone calls between him, his client and an associate.
    But prosecutor Peter Gair said an accountant of Doshi’s experience would have known a Production Order was a criminal investigation led by police.

    Mr Recorder Kershaw adjourned sentencing until next month while reports are prepared.
    But he warned Doshi: “I am going to grant you unconditional bail in the mean time, but you must brace yourself for an immediate custodial sentence.”

  • 30.11.10 Accountant fined £5,000 for a failure to report

    The ICAEW made the following regulatory decision in the following case for a failure to make a suspicious activity report in a timely basis

    Consent Orders made on 28 July 2010

    With the agreement of Michael Martin Shenker of 5Wellesley Court, Apsley Way,
    London NW2 7HF, the Investigation Committee made an order that the member be
    severely reprimanded, fined £5,000 and pay costs of £2,075 with respect to a
    complaint that:

    Between 7 June 2005 and 16 February 2006 Mr M M Shenker FCA failed to comply with
    statement 1.304 of the Members Handbook in that he failed to make a suspicious activity
    report on a timely basis to the National Crime Intelligence Service when he had a
    suspicion or reasonable grounds to suspect that Mr X’s activities in relation to the
    business of Y Limited were unlawful. D6496

  • 04.11.10 FATF to add Tax Crimes as a ‘Predicate offence’ for money laundering

    The Financial Action Task Force in its consultation document ‘Preparation for the 4th Round of Mutual Evaluations’ states that is considering including tax crimes as a predicate offence for money laundering in the context of its recommendation 1. More precisely, it proposes to amend the list of designated categories of predicate offences for money laundering as follows:

    • To clarify the current designated category of smuggling by referring to: smuggling including in relation to customs and excise duties and taxes.
    • To add a separate designated offence category: tax crimes – related to direct taxes and indirect taxes.

    For the private sector, the key result of this change will not be the impact of this change on recommendation 1, which already states crimes punishable by over 6 months of imprisonment be included within the predicate offences, but rather to the obligation to support suspicious transactions under recommendation 13.  Thus transactions related to the laundering of the proceeds of tax crimes would have to be reported as suspicious activity.

    In the UK, the accountancy sector has sometimes been reluctant to be included within the money laundering regime, in some ways understandable when comparing the requirements of recommendation 13 and the all powerful PoCA 2002 and the all crimes regime, sometimes seeming to ‘gold plate’ the EU 3rd  Directive. This can be seen from the differing approaches from some of the 16 supervisory bodies within the UK, some have more urgency than others.

    After another year of advising and training accountants and tax advisors in the UK, probably almost 2,000 firms and individuals of all sizes and expertise in total, I am still surprised that most have no concept of the ‘risk based approach’ and that tax evasion is reportable under PoCA. With a lot I get, I do not deal with my clients funds, I have copied their passport, tick, and I have a copy of a utility bill, tick. I have complied in full.

    This concept of ‘transaction’ based compliance seems to have seeped down into the sector, people and firms wanting to believe that they are too small to have to report or indeed be seen or even comply. The concept of transactional limits has even been debated in the House of Lords and other Parliamentary review boards so is in any wonder then given the reluctance of the sector as a whole this is the case? This is backed up by the statistic that there are still around 25,000 firms and business in the accountancy sector who just have not registered for supervision.

    However, from a point of clarification the main thrust of the FATF review is the mandatory risk based approach for all countries and regulated firms for risk assessment, risk management and mitigation and higher risk concepts. This is removal once and for all of the doubt of being too small for the Regulations, it is not size that matters rather it is the risk. Couple this with tax evasion becoming a predicate office of money laundering; I would hope finally the sector as whole embraces the UK compliance culture; apparently it is not as gold plated as people thought, just ahead of its time.

  • 15.01.10 Hunslet Man Arrested for Money Laundering

    A 35-year-old Hunslet man has been arrested on suspicion of money laundering as part of an investigation involving the City and Holbeck Proceeds of Crime Team and the Holbeck Neighbourhood Policing Team (NPT).

    Police officers and police community support officers (PCSOs) from the NPT entered the unemployed man’s home yesterday afternoon using a warrant obtained under the Theft Act, as part of an investigation into handling stolen goods.

    Inside the property officers found a large number of high-quality electrical goods including a plasma television, stereo system, laptops and computer equipment, and kitchen items, worth thousands of pounds. The man was also found to have £5,200 in cash in his coat pocket.

    The man was able to produce receipts for the items, but these were all paid for in cash and he is believed to have been unemployed for a number of years.  He was arrested on suspicion of money laundering, and after being interviewed he was bailed pending further enquiries.

    The cash has been seized by the Proceeds of Crime Team, who will now carry out an investigation into the man’s lifestyle to determine how he has acquired his assets without a declared income.

    If it can be proved that these assets have been acquired through criminality, the Team can then apply to confiscate them under the Proceeds of Crime Act 2002.

    Why Should They?
    Detective Sergeant Tom Walsh of the City and Holbeck Proceeds of Crime Team said: “Anyone who has expensive possessions but no obvious income must raise eyebrows among people who earn honest livings in our communities, and I would appeal to these residents to contact the Why Should They? campaign if they have any suspicions about how these people have acquired their assets.”

    The warrant was carried out following information from the community, and Inspector Damien Miller of the Holbeck NPT said: “We’re keen to show local residents that we’re listening and will act on the information they give us. Warrants like this are a great example and I would encourage people to continue contacting us about the issues they want us to tackle.”

    Visit the BTC website for compliance help and support for firms in the regulated sector

  • 05.08.09 Passwords stolen for tax returns

    HMRC self Assessment

    Gangs are stealing taxpayers’ passwords and submitting claims for tax refunds to be paid to them, HM Revenue and Customs has warned.

    A series of attempted fraudulent claims through the self-assessment repayments system has been discovered.

    No figures have been released outlining the extent of the fraud, but a HMRC spokesman said this was a new method of trying to extract money.

    He urged people to ensure passwords sent to them by HMRC were kept secure.

    “They should treat these details as carefully as they would a Pin for their bank account,” he said.

    Attempt
    More than 9.5 million taxpayers are in the self-assessment system, which was changed this year to encourage more people to submit their details via the internet.

    Two-thirds of all filings for 2007-08 were submitted via the internet, rather than on paper.

    When people apply to use the system they are sent a password through the mail which is then used when the taxpayer logs onto the HMRC website over the following 30 days.

    However, fraudsters have been getting hold of these passwords and other personal details. This could have been by stealing the mail, tricking people out of the details or even finding the letters discarded in bins.

    They then used these details to make fraudulent repayment claims, requesting funds be sent to other bank accounts.

    The HMRC spokesman said this was different from so-called phishing e-mails which pretended to be from the tax authority and aimed to discover taxpayers’ banking details so their accounts could be raided.

    Liability for any losses would be judged on a case-by-case basis, he added.

  • 30.03.09 Wirral drug baron’s wife’s Champagne lifestyle comes to end

    liverpool-daily-post-news-dynamic-panels-image-3-7581387671SHE enjoyed a life of the most vulgar excess, once joining her husband for a £600 chauffeur ride to Claridges for a £345 meal at Gordon Ramsay’s restaurant. But yesterday the glamorous wife of a Liverpool drugs baron was locked up for laundering his ill-gotten gains. Former beautician Sara Shea used her university-educated husband Keith’s drug money to pay for an enviable lifestyle of luxury.

    He was locked up for 15 years in 2007 for plotting to flood the streets with cocaine, while storing a deadly arsenal of weapons.

    The couple married in a lavish Barbados beach ceremony – spending £12,000 on flights alone – before throwing a £6,000 homecoming at Wirral’s Hillbark hotel. They splashed out £1,095 on dinner in the Oxo Tower – washed down with a £850 bottle of Cristal champagne. Their love of designer watches included an exclusive Chopard, a diamond-encrusted Chanel and his 18-carat gold Rolex. The latter cost £11,530.

    Of course, no luxury lifestyle is complete without expensive cars.  The Sheas had their share of Porsches, before settling on the £110,000 Aston Martin police found when they raided their £300,000 Wallasey home, where the steam room had its own plasma TV. The Aston was accompanied by a £46,500 BMW and a £76,000 Porsche.

    In just a year, the Sheas spent £90,000 in lavish entertainment, including £5,000 on hospitality at the British Open golf and £1,000 a time hiring a box at the MEN Arena. Mrs Shea owned handbags worth £12,000, with an account at Christian Dior’s boutique in Monaco.

    Yesterday, smartly-dressed with sunglasses, and carrying a designer bag, she was jailed for 2½ years. Judge David Harris, QC, said: “There are other partners who may be in this position.

    “The message has to go out that, if they meddle in the proceeds of crime, particularly drug crime, there will be serious repercussions for them.”

    Liverpool Crown Court heard the jet-set couple holidayed in luxurious resorts in Mexico, Marbella, and Nice. Sara Shea claimed she never knew her husband was a drugs lord.

    But Graham Pickavance, prosecuting, told the court the couple were stripped of £7,000 and 2000 euros at Liverpool’s John Lennon airport that was heavily contaminated with Class A drugs. Mrs Shea was carrying half the money, which they never tried to reclaim. The dark-haired 30-year-old, of Montpellier Court, Wallasey, later admitted she suspected their life-style was funded by crime.

    She admitted 11 money laundering charges, totaling £104,000.
    Jonathan Clarke, defending, told the court Sara Shea had inadvertently become involved because of her husband’s actions. He said: “It is an unusual case because this defendant has played no role whatsoever in the offences that lay in such funding coming into the household coffers.
    “Her money laundering was simply spending the money she received from her husband, or being in possession of items he had bought. “She found herself there rather than seeking it.”

    Mr Clarke told the court Shea, who is now dependant on beta blockers and sleeping tablets, had moved away from crime and had been working full-time in Debenhams. She had no wish to return to her husband.

    Judge Harris agreed Sara Shea had “undoubted qualities”, but said she had led an “excessively luxurious lifestyle”. “You chose to turn a blind eye, to ask no questions and to shelter yourself from developing certain knowledge to the nature of his activity.”

    Keith and Sara Shea will face a ‘proceeds of crime’ hearing on July 18.

    Visit the BTC website for compliance help and support for firms in the regulated sector.

  • 25/02/09 Garda fraud officers continue Anglo probe

    THE Garda Fraud Squad raid on the offices of Anglo Irish Bank was unprecedented and could lead to criminal prosecutions, according to legal experts.

    On Monday, a judge in Dublin’s District Court granted officers from the Garda Fraud Squad permission to enter three separate premises of Anglo Irish Bank and take possession of any books or documents, including permission to preserve and prevent interference with any material information seized by up to 20 officers working with Ireland’s corporate enforcer.

    It was the first time that the Office of the Director of Corporate Enforcement (ODCE) has ever sought permission from the courts to search the premises of a financial institution under investigation for possible breaches of company law.

    The rarely used section 20 of the Companies Act 1990 has previously only been brought to bear against individuals.

    Last night, the ODCE refused to disclose the reasons for its application to the District Court, citing “operational reasons”.

    The warrant is valid for a month but gardai can retain any documents seized for an unlimited period of time, following changes in the law in 2005.

    Breaches

    Legal experts have said that a series of possible prosecutions could result from the ODCE investigation including charges relating to the failure to keep proper books of account and breaches of rules relating to directors’ loans. The ODCE can also investigate possible offences where an individual who is financially interested in the success or failure — or the apparent success or failure — of the bank, sought to influence the bank’s policy.

    The investigation of ownership of shares or debentures, including their acquisition, disposal or transfer, may also constitute grounds for seeking a warrant.

    The new acting chief executive of the Financial Regulator, Mary O’Dea, has been working closely with the ODCE and exchanging information on matters relating to Anglo Irish Bank.

    This includes an investigation into all loans and other benefits provided by the nationalised bank to its directors and the unwinding of a major Contracts for Difference (CFD) position held by businessman Sean Quinn.

    Visit the BTC website for compliance help and support for firms in the regulated sector.