Money laundering offences: will you go to prison?

Money laundering offences: will you go to prison?

Using a chain of financial transactions in order to give illegally obtained money the illusion of legitimacy is a serious criminal offence with potentially grave consequences. Those found guilty of money laundering charges absolutely do face prison sentences in the most serious cases. For this reason, if you are being investigated in connection with money laundering, it’s essential to speak to a specialist money laundering solicitor as a matter of urgency.

The cost of money laundering

Money laundering represents an enormous cost to the UK economy each year. In May 2019, the National Crime Agency estimated that the illegal movement of money by criminals and terrorists costs the UK economy over £100 billion a year. When you consider that the total spent on the NHS in England was £129 billion over 2018 and 2019, the devastating financial consequences of this financial crime become starkly apparent.

As well as the massive blow to the economy, money laundering is an enabler of many other crimes that cause untold human suffering including modern slavery, drug trafficking and terrorism. In short, the easier it is to launder money, the more crime pays. As a result, the UK has some of the strictest money laundering regulations in the world, with severe penalties for those who break the law.

Money laundering and the law

As this lost revenue is money the government cannot afford to lose, the National Crime Agency is under huge pressure to catch and punish the perpetrators of money laundering. Money laundering is covered in the Proceeds of Crime Act 2002, a powerful piece of legislation designed to deter, punish and retrieve funds from those who seek to profit from crime in various ways including money laundering. It is also prosecuted under the Money Laundering Regulations 2017.

The law defines money laundering as follows:

• Concealing/ disguising/ converting/ transferring/ removing criminal property from England & Wales – Proceeds of Crime Act 2002 (section 327)
• Entering into arrangements concerning criminal property – Proceeds of Crime Act 2002 (section 328)
• Acquisition, use and possession of criminal property – Proceeds of Crime Act 2002 (section 329)

Depending on the nature of the alleged crime, money laundering investigations can be carried out by the National Crime Agency (NCA), the police or Her Majesty’s Revenue and Customs (HMRC). The Crown Prosecution Service generally prosecutes money laundering cases, although if the case is linked to serious fraud or corruption, the Serious Fraud Office (SFO) may lead the investigation and any subsequent prosecution. Also, in some cases the UK’s financial regulator, the Financial Conduct Authority (FCA) may investigate and prosecute a business or individual in connection with money laundering.

Who can be investigated for money laundering?

The world of shadowy international cartels who rely on complicated and large scale money laundering networks in order to fund their nefarious activities is a world away from most people’s reality. However, it is important to realise that in the fight against money laundering, the authorities rely on certain professionals to play their part in combatting money laundering and a failure to do so can result in prosecution, even if the enabling of financial crime happens by mistake. Ignorance and error are not deemed to be valid excuses by the authorities.

Professions legally required to keep up to date with money laundering legislation and report any suspicious activity by submitting a Suspicious Activity Report (SAR) to the National Crime Agency include:

• Financial institutions
• Credit institutions
• Auditors
• Accountants
• Tax advisers
• Insolvency practitioners
• Legal firms who deal in property and other financial transactions
• High value dealers – any business or sole trader who takes or makes cash payments of 10,000 euros or more in exchange for goods, including when the cash is deposited into a bank account or paid to a third party on their behalf.
• Casinos
• Auctioneers

What are the consequences of money laundering?

The Sentencing Council states that money laundering is an ‘either way’ offence, meaning it can be tried in a Magistrates’ Court by magistrates or in a Crown Court by a judge and jury. Generally, more serious cases of money laundering will be heard in the Crown Court with lesser offences decided in the Magistrates’ Court. This is because the Magistrates’ Court does not have the same sentencing powers as the Crown Court.

If you have been accused of money laundering and the case is being tried at the Magistrates’ Court, the maximum prison sentence you can expect is 6 months or 12 months if you are being tried for more than one offence. Fines are not capped at the Magistrates’ Court, so the fine you can receive can be unlimited.

If you are found guilty of money laundering in the Crown Court, the maximum prison sentence that can be imposed is 14 years. All offences are graded A, B or C according to severity, however, the minimum level of severity for money laundering offences is B – Medium Culpability. The least serious money laundering crimes are deemed to be those where the amount laundered equates to £10,000 or less, with a starting point of £5,000 given to the court to decide where to place the offence in the category range. Offences involving less than £5,000 receive a more lenient penalty with those involving more than £5,000 potentially invoking a maximum custodial sentence of 2 years.

The most serious money laundering offences are deemed to be those involving sums of £10 million or more, with £30 million given as the starting point for sentencing. These serious crimes can involve the maximum prison sentence of 14 years.

It is also possible to receive a community order as a punishment for money laundering.

How do money laundering fines work?

Fines are calculated as a percentage of weekly income with fines based on 25% – 75% of weekly income applicable in the least serious category and 500% – 700% in the most serious cases. When it comes to financial institutions, fines can reach enormous levels. All five of the UK’s biggest banks have been fined in connection with money laundering in the past decade. Most recently Standard Chartered was ordered to pay £842 million to US and UK authorities for various failings, including neglecting to enforce the required levels of anti-money laundering controls.

Defending money laundering cases

No matter the scale or circumstances of the alleged offence, every money laundering case is unique. However, the important thing to remember is that whether the case involves a business owner who has been accused of laundering the proceeds of crime through their business, an estate agent who has allegedly failed to carry out the necessary due diligence checks when selling a property, or a large company which has failed to prevent the laundering of money through its systems, the allegation of money laundering is a serious one.

As the authorities are under a great deal of pressure to successfully prosecute money laundering cases, it’s crucial to make sure you get the right legal team on your side at the outset of proceedings. At Purcell Parker, our money laundering solicitors have an excellent track record in defending many of these types of cases. In circumstances where your professional reputation is at stake, discretion is important and our low-key approach is valued by our clients. Although legal aid is rarely an option in money laundering cases, our first meeting with you will always be on a free, no-obligation basis at a time and place of your choosing. Where possible we will also provide you with a fixed-fee quote for your defence in order to help you plan towards resolving the situation and moving on with your life.

While you should be under no illusion that being investigated for money laundering will be anything but a difficult process, we will use our plain-English, non-judgemental approach to guide you through interviews and any trial. At all times our aim is to secure the best possible outcome for the case against you, whether that means ensuring a case does not go to trial, proving your innocence in court or securing the most lenient possible punishment where a sentence is inevitable.

Expert advice on compliance with money laundering legislation

Criminals intent on money laundering are using increasingly sophisticated methods of concealing the origins of their criminally-obtained funds. This, in combination with the fact that this is both a complicated and fast-moving area of the law, means that it is possible for experienced professionals to unwittingly become a channel through which money is laundered. The team at Purcell Parker can use their up-to-date expertise to help you set up an anti-money laundering system or provide advice on the system you already have in order to minimise the personal and professional damage that can be caused by prosecution for non-compliance.

Money laundering solicitors in Birmingham and beyond

Our business crime solicitors are based in Birmingham city centre but are able to defend money laundering cases throughout England. To find out more, please fill in the contact form or call 0121 236 9781.