To explore how lawyers are used to launder the proceeds of criminal activity. Regulatory measures that compel legal professionals to report suspected money laundering, and the implications this has for solicitor‐client privilege, are also addressed.
Data were collected from a sample of Royal Canadian Mounted Police proceeds of crime (POC) case files using a standardized questionnaire.
A statistical analysis reveals that lawyers came into contact with the POC in 49.7 percent of all RCMP cases examined. Lawyers are implicated in money laundering (both wittingly and unwittingly) primarily through their role as an intermediary in a commercial or financial transaction. In the majority of these cases, lawyers were facilitating a real property transaction by an individual engaged in drug trafficking. Lawyers were also used by offenders or their nominees to incorporate companies, purchase securities, and conduct bank transactions, including those pertaining to legal trust accounts.
The analysis of money laundering is based exclusively on an analysis reliance of police cases. The RCMP database from which the sample was drawn was not as complete as originally thought.
Associations representing the legal profession have vehemently resisted mandatory reporting obligation, arguing that it abrogates solicitor‐client privilege. This paper supports the tacit consensus emerging internationally that mandatory reporting for legal professionals should apply only to the financial and commercial transactions mediated by lawyers on behalf of clients.
This research helps to inform the debate over the extent to governments should mandate lawyers to report transactions or clients that may be involved in money laundering.
Schneider, S. (2006), "Testing the limits of solicitor‐client privilege: Lawyers, money laundering, and suspicious transaction reporting", Journal of Money Laundering Control, Vol. 9 No. 1, pp. 27-47. https://doi.org/10.1108/13685200610645201Download as .RIS
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