Solicitors being investigated for Money Laundering fail in their appeal - A cautionary tale for lawyers

Published on 2 Feb 2012 under category: legal

Judgement 11th January 2012.

This High Court decision provides a lesson for anyone who is feeling relaxed about their anti money laundering obligations.

Two criminals used different solicitors at the same firm, who handled their family, property and contractual matters. After one of them was arrested for drug dealing offences the solicitors realised their clients were crooks, and made reports to the Serious Organised Crime Agency (SOCA) about transactions in which they were engaged. SOCA gave them consent to proceed, on certain conditions.

So far so good. The solicitors continued to act for the defendants, one of whom was now in prison. But despite the fact that the solicitors had been filing reports about their dealings the police arrested them, searched their offices, and accused them of money laundering offences. It was nearly two years before the accusations against the solicitors were dropped and they were released from bail.

The solicitors and their firm claimed compensation from the police, alleging that:

there were never legal grounds to arrest them, nor to search their offices
in any case it was unreasonable to have done so, since they were ready to cooperate
the search warrant had irregularities, and too much material was taken
in any case there was no reason to keep them on bail for almost two years.

The High Court dismissed all the claims. The police had in some respects misunderstood the law, but even so the court felt they had reasonable grounds for suspicion, and were within their powers.

The story makes one’s blood run cold. It shows that if the police dislike or distrust the way you are representing your client they may be able to arrest you, search your offices, keep you on bail for a very long time, and then drop the matter, without having to pay compensation. The facts of the case are complex and require careful study, but it is difficult to avoid the conclusion that the court bent over backwards to justify the actions of the police.

Cubism Law consultant Dan Hyde is an acknowledged expert in the field of fraud, including white collar crime, money laundering and asset recovery. You read more about our specialist fraud services here.

Fitzpatrick and Others -v- The Commissioner of Police of The Metropolis; QBD 11-Jan-2012