We are delighted that for the fourteenth year running we have been highly ranked again by the Legal 500.
Please see the commentary about some of our leading lawyers cited in The Legal 500 2023 Edition.
While drug trafficking is commonly associated with violent crimes (such as firearm offences), financial crimes also play a crucial part in the drug trafficking process. To conceal any illegal activities from authorities, drug traffickers will use the process of money laundering to convert funds raised from criminal activities into revenue that comes from a perceived legal source.
Whether you have been accused of laundering money that originated from drug trafficking, or have been charged with failure to report suspected money laundering activities, you should instruct the help and expertise of a specialist criminal defence lawyer right away. Get in touch today.
First of all, drug traffickers will initiate ‘placement’, which involves placing the drug money into various financial institutions. This process generally includes opening several bank accounts (often in different names), and storing varying amounts of money in these accounts.
The second stage involves ‘layering’ to create distance between the person who originally placed the funds and the people who are going to be involved in the next stage of withdrawing. The money in the banking accounts is withdrawn and converted into other currencies, paid to other people and moved around until its true source is difficult to trace.
Finally, in the third stage, the money is ‘integrated’ back into society and used for legitimate purposes such as purchasing high value property, stocks, bonds, tourism, and so on. A high amount of financial activity between accounts is therefore a major sign of money laundering that could be linked to drug crime.
When drug money has been raised, a method known as ‘structuring’ is used to break down the large volumes of cash that have been acquired into small manageable sums. Other laundering methods involve wire transfers into different currencies, the purchase of gems and other precious items or jewellery, or simply smuggling vast amounts of cash out of a country.
A predicate offence in the context of money laundering occurs when those who commit crimes, such as drug trafficking, then launder the monies linked to those crimes. A predicate offence is therefore an offence that often comes before (and then enables) a crime that is greater in severity or that generates large amounts of money (in this case, laundering potentially millions of pounds in drug funds).
The 6AMLD has identified 22 predicate offences that cover cyber crime, financial and tax crime, terrorism and fraud. These predicate offences are listed below:
A person can still be prosecuted for money laundering offences under the Proceeds of Crime Act 2002 (POCA), even if the money laundering activity occurred outside of the UK, so long as a part of the criminal act or scheme to launder money had both harmful consequences on the UK economy and took part in the UK. If prosecuted, all criminal conduct will be examined during a trial, which includes overseas activity that would have been considered an offence had it occurred in the UK.
Authorities worldwide are cracking down on suspected money laundering behaviours and are doing everything in their power to prosecute where they can. If you have been charged or accused of money laundering linked to drug trafficking, it is crucial that you have the right legal representation by your side who can fight your case.
At Lewis Nedas Law, our solicitors are highly knowledgeable in financial law and have successfully defended many types of cases involving allegations of money laundering, failure of compliance checks and so on. We will do all we can to protect your reputation, remaining discreet while offering you advice and support at every stage of the investigative process. Get in touch with our experienced financial crime solicitors by contacting us on 020 7387 2032 for 24/7 legal support, or fill in our online enquiry form.
A leak of around 12 million documents, known as The Pandora Papers, disclosed the hidden wealth, tax avoidance schemes and money laundering activities conducted by some of the world’s most powerful people. The files exposed how individuals used anonymous and offshore companies to conceal their wealth, while highlighting the complexity of tax havens, shell companies and loopholes that are established to avoid heavy taxation.
This article looks to explain offshore entities and the role they play in financial crime. If you believe you are being investigated for tax evasion and money laundering, please get in touch with our dedicated team today.
The Pandora Papers have shown how some of the world’s richest and most powerful people hide their wealth in offshore companies and tax loopholes. A common example is owning a property (that is based in the UK), through a company or chain of companies based offshore.
Offshore countries are often referred to as ‘tax havens’ because it is simple to set up a company with very little or a total absence of corporation tax. Tax havens also enable the companies, and their owners, to remain hidden. The most well known tax havens are in the Cayman Islands, British Virgin Islands, Singapore and Switzerland.
People can avoid paying taxes by setting up a company in a tax haven, and while it is not illegal, it is often frowned upon. Some people choose to hold their money in offshore tax havens because they want to protect it from criminals, or from financial or political instability in other countries. Although it’s not against the law to have offshore bank accounts, property, assets and companies, they are known for moving around illicit funds because of their natural secrecy.
In order to establish an offshore finance company, a shell company needs to be set up. A shell company is a company without an office or employees. It does cost money to create a shell company, and specialists are often paid by the super-wealthy to both establish and run these companies on their behalf. Such businesses tend to have paid directors, but these directors can be different to the person or people who are really behind the company.
According to the IMF (The International Monetary Fund), trillions of dollars are stored in offshore accounts every year, causing billions in lost taxes for governments.
As the name suggests, the company is simply an outer ‘shell’ of a company, meaning it only exists by name and has no other physical presence or staff.
Individuals use tax havens and shell companies to make it more difficult for their financial assets to be located and to have significant tax benefits. However, shell companies are also commonly used to hide a person’s identity and provide a safe haven to conceal money obtained through illicit means such as bribery or drug trafficking.
While owning a shell company isn’t illegal, what a person holds within it could be. For instance, if laundered monies are being stored in a shell company, this is obviously illegal, but to have a luxury property owned by a shell company is legal. A company that has a second entity in a tax haven may end up paying itself a fee as part of a transaction, which would enable it to record lower profits in its country of origin. This way, companies avoid huge tax bills.
Tax evasion is a deliberate move to avoid tax and money laundering is one of the most recognised ways to do so. If you have been accused of tax evasion, or failure to report or prevent tax evasion, it can cause severe reputational damage to your business. If found guilty, you could also face serious financial penalties or even a custodial sentence. As such, it is essential to get the best legal representation as early as possible to ensure that any proceedings are handled effectively and in line with your best interests.
Our team has years of experience successfully defending charges of financial crime, including those related to tax evasion and money laundering. Should you find that you are being investigated by an authoritative body, we will help you fully comply with the investigation while protecting your business.
If you have been charged with or are being investigated for tax evasion through shell companies and offshore financing, our financial crime team at Lewis Nedas Law can help to compile a successful defence for your case. Get in touch with our experienced solicitors by contacting us on 020 7387 2032 for 24/7 legal support, or fill in our online enquiry form.
Lewis Nedas Law has been recognised as one of The Time’s best law firms.
Lewis Nedas has been commended for commercial dispute resolution, commercial property, company & commercial, financial crime & fraud & regulatory, insolvency & restructuring.
Read the full announcement here.
Money laundering activity is typically considered to be carried out through cash, however cryptocurrency has created a digital means in which large sums of funds can be transferred from one source to another with anonymity. Governments around the world are becoming increasingly aware of the loopholes surrounding cryptocurrencies and money laundering, and are finding ways to crack down on any illicit transactions through the virtual currency.
If you have been charged with or are being investigated for money laundering in relation to cryptocurrencies, our specialist team is here to assist you and offer advice while defending your case. Contact us today.
If money laundering takes place via cash (fiat) currencies, bank accounts must be set up to flow cash through the system, taking funds from illegitimate sources and placing them in and out of the financial system repeatedly to conceal their origins.
Cryptocurrency, on the other hand, is a modern medium for value exchange and represents a more attractive option to money launderers because of the speed with which funds can be transferred between users via exchanges. Exchanges only need the addresses of crypto wallets to take place, and can occur anywhere in the world as the entire system is decentralised.
Money laundering using cryptocurrency is also far more anonymous because bank accounts are not required to move funds. The anonymity of the cryptosystem can be exploited to create accounts that do not match up to personal documents, as well as create multiple exchange accounts that are sourced from the same IP address.
Unlike bank statements, there is no paper trail in cryptocurrency transactions. Instead, transaction history is cryptographically secure on a blockchain. There can, however, be a pattern of transactional behaviour that indicates money laundering is taking place through cryptocurrency platforms, such as:
As cryptocurrency continues to grow in popularity, regulators and governments have been taking more steps to tackle money laundering-related activities through crypto platforms.
As of 10 January 2020, existing crypto-asset businesses had to be compliant with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) and must be registered with the FCA by 9 January 2021. Any new crypto-asset businesses set up after 10 January 2020, must register with the FCA before carrying out any activity.
The EU also has its own anti-money laundering directives (AMLD), which state the rules for record-keeping by both consumers and crypto platforms. Similar to other financial institutions, cryptocurrency trading platforms must consider their approach to compliance.
General anti money-laundering measures include:
As many cryptocurrencies run on a blockchain network, they are extremely volatile and very difficult to control. Many traders like to trade using cryptocurrencies because of the immutable ledger that a blockchain offers, meaning that transactions cannot be changed or reversed.
Although cryptocurrency is more anonymous than normal currency, it doesn’t make it impossible to trace. Every ‘block’ in the blockchain is home to chains of transaction histories, which can be linked back to crypto wallets. Therefore, if an illegal transaction is traced to a wallet, that wallet can be used to track the owner.
Government bodies are continually trying to keep up and introduce checks to ensure that currencies held on blockchains aren’t financing crimes. If you have been accused of money laundering, you must instruct a specialist criminal lawyer as soon as possible. Our financial crime team can help defend even the most complex of money laundering cases, and can ensure you comply with investigations by the FCA, Serious Fraud Office (SFO), Crown Prosecution Service (CPS), HM Revenue and Customs (HMRC) and more.
If you own a business that is being investigated for suspected money laundering or failure to report money laundering through digital assets, we can offer specialist advice and consultancy while providing a robust case and the representation you need to avoid prosecution. Get in touch with our experienced financial crime solicitors by contacting us on 020 7387 2032 for 24/7 legal support, or complete our online enquiry form.
NatWest recently pleaded guilty to three counts of failing to monitor £365 million from being deposited into a Bradford jeweller’s account between 2013 and 2016. It is the first time that a large financial UK institution has faced a criminal investigation and consequent prosecution because it failed to adhere to Regulations 8(1), 8(3) and 14(1) of the Money Laundering Regulations 2007 (MLR 2007).
In this article, we look at what it means to effectively monitor client transactions, how to perform customer due diligence and report suspicious activity. If you have any questions regarding how your business complies with anti-money laundering (AML) legislation, please get in touch now.
Certain institutions are responsible for ongoing monitoring of customer’s accounts to prevent money laundering. This can be conducted through automated customer screening, monitoring transactions, and carrying out customer due diligence (CDD).
CDD enables financial companies to perform checks that confirm a client is who they say they are. This helps institutions identify money laundering behaviour by understanding the reasons behind client decision-making and actions.
Under regulation 27 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), companies must carry out due diligence when:
If CDD is required, the client’s identity must be verified through a reliable source such as a passport or driver’s licence. The structure and ownership of any companies, trusts or foundations related to that person must also be understood, as well as transaction history. If a client is a corporate body, its registration details, company number, name and address of head office must be sought and verified.
To prevent and try to identify possible money laundering, banks and financial institutions will usually investigate any suspicious transactions over £5,000 in value. Examples of suspicious activities may include:
Suspicious Activity Reports (SARs) are made when suspicious activity is believed to have taken place. Companies working within regulated sectors must submit a SAR under Section 7 of the Proceeds of Crime Act 2002 (POCA) if they suspect, or have reasonable grounds to believe, that money laundering or terrorist financing is taking place or being attempted. The SAR must detail the information that has come to light in respect of their business.
Companies in the UK need to be aware of AML legislation, be regulated by the appropriate financial authorities where necessary, and have their own AML policies and systems of compliance and reporting.
The Financial Conduct Authority (FCA) regulates the UK’s financial services sector, and is responsible for regulating and/or monitoring or imposing sanctions on building societies, banks, credit unions and so on. All financial institutions within the UK have to be registered with the FCA.
The FCA also has the power to investigate any institutions it believes are involved in or assisting in money laundering offences, including lack of reporting. The FCA can work with law enforcement and the Crown Prosecution Service as part of its investigations, as well as HMRC.
HMRC issues guidance to all companies on AML compliance regulations in the UK, offering advice to companies on how they can monitor transactions and CDD. Sectors that are supervised by HMRC include estate agency businesses, letting agency businesses, and high value dealers.
The Serious Fraud Office (SFO), can arrange court orders, arrest warrants and can also freeze assets if it suspects that company funds are involved in money laundering or terrorist financing. As a result, a deferred prosecution agreement may be reached.
Deferred prosecution agreements (DPAs) are agreements made between a prosecutor investigating financial crimes, and the organisation being investigated/prosecuted. The agreement is made under the supervision of a judge, and enables the suspension of prosecution for a period of time stated in the agreement, with the understanding that the organisation must meet certain conditions.
DPAs always involve companies, never individual persons. There are many positives to DPAs, in that they enable a corporation to make amends and pay fines without the reputational damage of conviction, which could put the company out of business and innocent staff out of work.
DPAs also avoid the need for a lengthy and costly trial, but the company involved must cooperate at every stage of the investigative process. This may include co-operating by handing over any individuals involved or who had knowledge of money laundering, while upholding the terms of the agreement.
If you or your business is being investigated for suspected money laundering or failure to adhere to AML regulations, get in touch with our experienced financial crime solicitors at Lewis Nedas Law. Our team has successfully defended even the most challenging of cases and fraud investigations. Get in touch with one of our experienced solicitors by contacting us on 020 7387 2032 for 24/7 legal support, or complete our online enquiry form.
Lewis Nedas’ Property Law team are delighted to announce that they have won the ESTAS Customer Service Award for 2021.
Some of our award winning team of property lawyers at the ESTAS 2021, photographed with a certain well known TV personality and property professional, Phil Spencer.
To view our ESTAS 2021 winner’s flyer click here.
We are delighted that for the thirteenth year running we have been highly ranked by the Legal 500.
Please see the commentary about some of our leading lawyers cited in The Legal 500 2022 Edition.
LNL Firearms Law specialist Laura Saunsbury has been interviewed by both ITV and Sky News In the wake of the tragic shootings in Plymouth by licensed gun owner Jake Davison last Thursday 12th August 2021.
Laura was approached by both networks as an independent expert in this field of law to explain the legal controls and checks on firearm and shotgun certificate holders and those applying for a certificate. To view in full Laura’s live interview with Sky News at lunchtime on Saturday 14th August click on the video below.