Lawyers are being targeted by organised criminals during property purchases, with red flags over home transactions surging 66% in two years.
Research by anti-money laundering and big data specialists Fortytwo Data shows nearly four in 10 (37%) of all suspicious activity reports (SARs) across the entire legal sector relate to either residential or commercial conveyancing.
Property purchases provide perfect cover for those attempting to hide dirty money because of the large sums involved.
Journalist Misha Glenny, whose book McMafia inspired the current BBC crime thriller starring James Norton, said he believes London has become a “centre of laundering filthy lucre” as “unsavoury characters” from around the world buy up property.
Of the 506 SARs in the legal profession between 2014 and 2017, residential house purchases accounted for 158 red flags. A further 31 SARs were raised during the purchase of commercial properties.
SARs are alerts submitted to the National Crime Agency that flag up suspicious activity indicative of money laundering.
Around two-thirds of cases of wrongdoing are serious enough to be referred to Solicitors Disciplinary Tribunal.
In April 2017, solicitor Daniel Mun Kin Tang, a partner at north London firm Christopher Mathew Solicitors, was fined £7,500 and £32,469 in costs by the Solicitors Disciplinary Tribunal for overlooking potential money laundering red flags during the purchase of three flats by a family he knew. Tang admitted he had been “sloppy” but denied the allegations.
Julian Dixon, chief executive of Fortytwo Data, said money laundering is vastly under-reported due to the nature of organised crime.
“Solicitors are vulnerable because of the legitimacy their profession provides,” he said. “For criminals, the vast amount of cash involved in property purchases provides the perfect cover for laundering the proceeds of drugs, terrorism and firearms offences.”
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