How can money be laundered in the Legal Sector?
In carrying out their duties, lawyers are often required to hold clients’ funds, manage said funds, serve as a conduit for the sale and purchase of large properties, manage companies and trusts, and carry out executive duties. The level of involvement paired with the frequency of large monetary transactions, the shifting or protection of assets, and verification of information, makes lawyers prime targets for ML/TF transactions or behaviours.
Identifying suspicious transactions for Lawyers
Criminals may:
- Appoint a lawyer in financial or commercial transactions and request the concealment of their name in any of these transactions.
- Resort to lawyers to create companies, particularly international business companies, from outside the country (offshore) in a way that shows that the objective of creating the company is to conceal the illicit source of the funds.
- Resort to lawyers to invest in the real estate market, but the purchase or sale prices are not commensurate with the real estate value.
- Request, upon hiring a lawyer to incorporate a company, to transfer/deposit the incorporation fees or the capital to/in the bank account of the lawyer through multiple accounts that he has no relation to without a reasonable justification.
- Request that the lawyer manages investment portfolios, in countries allowing such activity, and give instructions to conduct transactions that have no clear economic reason.
- Use the sources of funding for requested transactions, from large financial transactions that cannot be justified by any known business or corporate purpose.
- Request payments be made to third parties without clear reason or a valid corresponding transaction.
