In any society, organised crime is a serious problem, comes in various guises, and has a vast array of social and economic impacts.
The National Crime Agency (NCA: the successor to the Serious Organised Crime Agency since 2013) recently estimated that organised crime costs the UK economy around £24bn a year. Economics aside, serious and organised crime is a cancer causes great damage to communities and families, and has a long list of victims. For example, drug addicts commit burglaries and muggings to fund their addiction. The sexual exploitation of children often leaves long-term psychological scarring. Not only does serious (often violent) criminal activity act as a deterrent for legitimate businesses, but financial fraud compromises the stability of one of the financial markets and institutions. Further, the ever increasing and potentially biggest threat of all, cybercrime, undermines public confidence in communication and online technologies, and the ever-expanding online economy. Recent Home Office information estimates that there are in excess of 30,000 criminals, in over 5, 000 gangs operating in the UK. Such organised crime gangs are flexible and entrepreneurial, always adapting their activities to stay one step ahead of law enforcement, and exploiting new methods of crime as old avenues are shut down.
In efforts to tackle such organised crime, the NCA has great, sweeping powers and 4,500 officers domestically and abroad. The Agency also works very closely with British intelligence, other government agencies, and local police. The NCA has to date made several (some high profile) arrests, and confiscated many millions of pounds of criminals’ assets. However, the NCA, in calling for ‘constant vigilance’, and in fiercely tackling such organised crime, has realised the limitations of its resources in some areas. As such, 2015 sees both the NCA and other law enforcement agencies are considering enlisting help from an unusual source- lawyers.
Firstly, the proceeds of such serious and organised crimes need to be laundered, and made legitimate, so as to avoid attracting the unwanted attention of law enforcement. In this regard, solicitors can often be unwitting or negligent accomplices as they arrange financial transactions, transfer ‘dirty’ money through client accounts, and deal with legal matters relating to seemingly legitimate companies (through which ‘dirty money can be laundered). According to NCA economic crime command Deputy Director Nigel Kirby ‘this is not just about legal professionals – it’s about the financial industry as a whole. Bankers, accountants, company formation agents and so forth.’ Regarding lawyers and complicity in organised crime Mr Kirby further stated in recent discussions that there are ‘the negligent and the careless [lawyers], who probably really don’t care, turn a blind eye and are probably committing criminal offences under POCA [the Proceeds of Crime Act] and also some regulatory offences. And then there are the unwitting, who aren’t aware of what’s happening.’
This view is shared by the legal regulatory bodies, with all such parties acknowledging the need for attention to good due diligence and proper checks at law firms to prevent such accidental complicity in money laundering. Proper processes need to be established in law firms to tackle such practices. Quoting from Kingsley Napley’s crime and regulatory partner Michael Caplan QC, ‘it is a question of having systems in place… of being aware and ever-vigilant… The reality is that if a solicitor’s office wants to be 100% secure, it’s got to lock itself down and do no business – and that’s very difficult.’
Currently, the Law Society has an anti money laundering (AML) taskforce. Further many law firms (particularly large, national or international firms) have a dedicated department in this regard, and efficient systems checking for AML activities. However, although necessary, such emphasis on extra vigilance and due diligence can be time consuming and costly for small firms and sole practitioners. As such, a balance must be found. Above all, efforts for deep and effective due diligence in transactions and legal matters must be reasonable.
There are also those lawyers who are actively complicit in organised crime. According to Mr Kirby, those complicit ‘can certainly expect the NCA to be targeting them…. We are interested in pursuing those that are complicit at the top end, that we have serious criminal charges to bring against.’ The Deputy Director has further called for strengthened information sharing between the Law Society and the NCA. As regards such information, as organised crime evolves, and organised crime sees new opportunities of crime, it is for law enforcement to keep the legal profession updated as to current methods of organised crime. Further to that Scott Devine, the Law Society’s AML policy adviser, has said previously that the Law Society’s AML role is primarily education and training, and that there are ‘many sources of advice open to the profession… the NCA in the middle of last year commented that the legal profession has more information available to its members that any other. On an international level, we’ve collaborated with other law societies around the world and last year produced a report looking into the vulnerabilities. We worked with the American Bar Association, the International Bar Association and the Council of Bars and Law Societies of Europe, coming up with a report looking across the whole globe. It helps lawyers understand the red flags and what to do once they have recognised them. The role of education cannot be understated here.’
Whilst cooperation between the legal sector and law enforcement is of mutual benefit in tackling organised crime, there are limits to what assistance the legal sector can actually give, that is due to legal professional privilege. Information as regards illegal activity, whether direct or indirect, complicit or not, needs to be made available to the NCA- but in a way that does not breach legal professional privilege.
Discussion, cooperation and dialogue between law enforcement and the legal sector are on-going. What is clear is that in the fight against organised crime, lawyers can be of great assistance- more than they realise. It is getting a two way flow of information, and in establishing a balance in certain regards that is proving to be problematical in implementation. However, the will is there- the will of the legal profession to actively uphold the law that they learn in law school with due regards for the ethics, duties and constraints that their role as legal professionals imposes upon them.