Money-laundering reporting
The Law Society’s Money Laundering Reporting Committee (MLRC) is one of the Law Society’s standing committees and carries out the functions generally vested in the money-laundering reporting officer in other organisations with money-laundering reporting obligations. The committee is comprised of solicitors and a lay member (an accountant) and an executive staff member of the Society’s Regulation Department acts as committee secretary.
The MLRC has a statutory duty to report any suspicion or knowledge it may have that a solicitor (and/or any other person) has been or is engaged in money laundering or terrorist financing to the relevant authorities (An Garda SÃochána and the Revenue Commissioners).
The money-laundering reporting obligations of the Law Society have been delegated to the MLRC with a duty to report to the Council of the Law Society (on a no-names basis) on the performance of these obligations.
In addition, the MLRC’s remit also extends to relevant offence reporting pursuant to the Criminal Justice Act 2011. In these cases, the MLRC, where it has information which it knows or believes might be of material assistance in preventing the commission of a relevant offence pursuant to the provisions of of the Criminal Justice Act 2011 or securing the apprehension, prosecution or conviction of a person for such a relevant offence, is obliged to report that information as soon as is practicable to An Garda SÃochána. Typical relevant offences include offences contrary to the Criminal Justice (Theft and Fraud Offences) Act 2001 (such as theft or forgery), conduct that could be described as a conspiracy to defraud at common law, and money laundering.
The Law Society has an internal procedure whereby suspicion that a money-laundering offence, an offence of financing terrorism, or a relevant offence has been or is being committed by a solicitor or any other person requires the submission of an internal report to the MLRC, which decides in each case whether or not a report should be made to An Garda SÃochána and the Revenue Commissioners. In practice, as might be expected, any suspicion is most likely to arise during an accounts inspection or when dealing with a complaint about a solicitor.
Some real life anonymised examples of money laundering and relevant offences, which have been reported to the committee and where a decision was made to report the matter under section 63(2) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 and 2013 and under section 19(1) of the Criminal Justice Act 2011, include the following:
Undrawn costs in client account
During the course of a Solicitors Accounts Regulations investigation carried out by the Law Society, it was discovered that, over an eight-year period, the firm allowed the sum of €450,000 in undrawn costs to build up in the firm’s client account. The firm failed to account to the Revenue Commissioners in respect of VAT and income tax liabilities arising on the amount, which should have been transferred, thus raising the suspicion of deliberate tax evasion.
The matter was considered by the MLRC, and a decision was made to report the matter to An Garda SÃochána and the Revenue Commissioners under section 63(2) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010.
Theft of clients’ moneys
During the course of a Solicitors Accounts Regulations investigation, it was discovered that the solicitor firm had disbursed clients’ moneys in the sum of €50,000 from the client account of the firm in respect of personal and office expenditure.
The matter was considered by the MLRC, and a decision was made to report the matter to An Garda SÃochána under section 19(1) of the Criminal Justice Act 2011.