Breaches of anti-money laundering (AML) regulations by conveyancers have incurred fines of over £59,000 since the start of April, with the Solicitors Regulation Authority insisting the penalties are in the public interest and must act as a deterrent.
Notices published by the SRA within the last two weeks list a string of offences that have incurred individual fines of between £3,000 and £19,000, with costs being added in all cases.
On Monday, the SRA announced a fine of £19,116 for Tring-based Legal & Property Limited (Matthew Waite & Co) following a desk-based review by its AML Proactive Supervision team. The review identified breaches and failures related to the Hertfordshire firm’s compliance with the Money Laundering, Terrorist Financing (Information on the Payer) Regulations 2017 (MLRs) and several related areas of the SRA’s principles and codes of conduct.
The SRA had alleged that between June 2017 and November 2024, the firm did not have a documented assessment of AML risks in place, nor had it established and maintained complaint policies, controls and procedures to mitigate any identified risks.
The regulatory body claimed that the breaches and omissions were classed as serious in light of the firm’s significant conveyancing workload. The judgment notes:
“Our records show that since 2009 (when the SRA started collecting such data), that over a quarter of the firm’s work has been in-scope of money laundering regulations, by virtue of conveyancing alone and this area of work has increased significantly to over 85% of the firm’s current total work.
“This is a serious breach, as conveyancing is a high-risk area of work. Property is an attractive asset for criminals because of the large amounts of money that can be laundered through a single transaction and because property will tend to appreciate in value.”
Although the SRA acknowledged there was never any evidence of harm to clients or third parties and there was a low risk of repetition, it said the fine was appropriate in light of the public interest element, adding:
“[The fine] creates a credible deterrent to others and the issuing of such a sanction signifies the risk to the public, and the legal sector, which arises when solicitors do not comply with anti-money laundering legislation and their professional regulatory rules.”
The second largest penalty announced this month has been handed to Rollits LLP of Hull, which was fined £15,168 following an AML inspection that revealed the firm was unable to demonstrate how it took adequate measures to establish the source of funds in four residential conveyancing transactions worth £320,000, £34,500, £825,000 and £290,000.
The fine in this case was particularly justified, the SRA claimed, because:
“It is in the public interest that firms ensure compliance with the money laundering regulations. A failure to do so has the potential to cause significant harm, by exposing the firm to the risk that its services will be used to carry out money laundering or terrorist financing. Where thorough checks are carried out, this mitigates and manages the risk and ensures that the public can take comfort that firms are complying with their legal and regulatory obligations.”
In Exeter, Barton Law Ltd was fined £12,588 after admitting that a lack of documented assessment of AML risks breached MLRs and SRA principles. The SRA acknowledged that risk to clients was low and no harm had been occurred, but the firm’s conveyancing work left it vulnerable:
“The impact of the harm or risk of harm is assessed as being low. This is because failing to ensure it had compliant FWRA, PCPs and CMRAs left the firm vulnerable to the risks of money laundering, particularly when providing in-scope work such as conveyancing. While the firm carries out a small amount of conveyancing work, this work is still within scope of the MLRs 2017. Therefore, the firm left itself without effective arrangements in place to manage compliance with the MLRs 2017. The score reflects that, although there is no evidence of actual harm having occurred, it had the potential to cause minimal loss or have minimal impact.”
Southampton’s Idiculla Solicitors received a £5375 penalty for AML breaches related to not having an appropriate firm-wide risk assessment, a lack of appropriate policies and procedures, and a lack of appropriate policies, controls and procedures in what the SRA said was a ‘high-risk area’:
“The firm undertakes almost all of its work in scope of the MLRs 2017, including over three quarters in the field of conveyancing, a high-risk area in relation to money laundering and terrorist financing. This had the potential to open up the firm to an increased risk of being exploited by criminals.”
Also announced so far in April, Tutter & Co of Derby accepted a penalty of £3303 for areas of concern related to the firm’s compliance with MLR’s and SRA principles, and Alan Turner & Co in Bath was fined £3848 for failing to have in place appropriate assessments of AML risks.
In all cases, the SRA said it had found no risk of harm to clients or the public. However the authority notes that, ‘A fine is appropriate to maintain professional standards and uphold public confidence in the solicitors’ profession and in legal services provided by authorised persons.’
One Response
Money making exercise.