Digital technology advances and money laundering

 

Real-time faster payments and transfers are making it easier for money launders to execute criminal activities.

Lawyers and accountants before they sign off on a deal should ensure the deal is “legit”. However,  a tiny number of law firms around the world are knowingly happy to turn a blind eye and treading on borderline. Several honest law firms think they might be manipulated or deceived into being the unwitting accomplices of criminals, jeopardising their greatest asset “their reputation” at risk.

Technology is getting advanced day by day, as well as the criminals are becoming more scrupulously sophisticated. There are legislation putting greater responsibility on law firms to undertake due diligence to vet their client and their proposed transactions before they execute them.

To do this they require rigorous systems, good judgement and hindsight and if doubts arise they are required to make a suspicious activity report  (SAR) to the National Crime Agency (NCA).

With the technology going digital the money laundering is an international crime.

We will see an increase in fraudulent transactions as the chances of transactions being scrutinised fully and repudiated before funds disappear decreases.

According to Tim Hill, technology and cyber security policy adviser for the Law Society,  “ Cybercrime does not always constitute money laundering, Knowledge of the red flag of money laundering can assist lawyers to avoid falling for online scams.

The UK’s professional legal service companies are being targeted by money launderers, who use legitimate firms to bring the proceeds of serious and organised crime into the economy, investing it further into criminal activity and comprising the integrity of UK financial institutions.

In India, Delhi Lawyer Rohit Tandon was arrested by enforcement directorate and his law firm raided by Income-Tax officials earlier this money case against him. During investigation he had revealed that Kotak Mahindra Bank Manager Ashish Kumar had received an amount of Rs 51 crore from him and further the bank manager had made drafts of Rs38 crore on fictitious amounts which were later cancelled by the Income Tax department.

China has restrictions to currencies out of their country, and businessmen are buying Bitcom coins to circumvent their legislation, with data breaches increasing penetration of personal information and its subsequent misuse.