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Money laundering laws ‘don’t apply to crooked lawyers’ as Law Society allows solicitors who banked in tax havens for mystery clients to keep jobs

07 Dec

Law Society of ScotlandUnfit regulator : Law Society allows solicitors who flouted money laundering laws to keep jobs. DESPITE widespread public anger & concern over companies, individuals, criminals, and even some politicians who bank in tax havens around the world to escape paying their fair share of tax, revelations in the SUNDAY MAIL newspaper last weekend apparently show the flouting of money laundering laws have little effect within the legal profession as the paper revealed two solicitors, George Morton and Malcolm Thomson who worked for the Marshall Wilson Law Group in Falkirk escaped with a fine while still being able to work, while members of the public charged with a violation of money laundering laws but without the protection of a self regulating body such as the Law Society might have faced court, a custodial sentence and even the loss of their jobs.

No press release has been issued by the Law Society of Scotland or the Scottish Solicitors Discipline Tribunal (SSDT) other than the findings on their website in this case, available here : Law Society v Malcolm Welsh Thomson and George Raymond Morton. The full SSDT finding is available HERE (pdf)

ssdtSSDT found solicitors guilty of breaking money laundering laws but still allowed them to keep their jobs. The Scottish Solicitor Discipline Tribunal’s determination stated : “The Tribunal having considered the Complaint dated 7 October 2009 at the instance of the Council of the Law Society of Scotland against Malcolm Welsh Thomson, Solicitor, Marshall Wilson Law Group Limited, 2 High Street, Falkirk (hereinafter referred to as “the First Respondent”) and George Raymond Morton, Solicitor, formerly of Marshall Wilson Law Group Limited, 2 High Street, Falkirk and now of Morton Pacitti LLP, 5 Newmarket Street, Falkirk (hereinafter referred to as “the Second Respondent”); Find the First Respondent guilty of Professional Misconduct in cumulo in respect of his several breaches of the Solicitors (Scotland) Accounts, Etc Rules 2001, namely Rule 6 regarding the operation of client accounts, Rule 8 regarding keeping properly written up books and accounts, Rule 10 regarding the reconciliation of client funds, Rule 11 regarding the payment of interest on un-invested balances and Rule 22 which prohibits the firm acting for the lender to one of the solicitors in the firm; Find the Second Respondent guilty of Professional Misconduct in cumulo in respect of his several breaches of Rule 24 of the said Rules in relation to his failure to comply with the requirements of the Money Laundering Regulations; Censure the First Respondent and Fine him in the sum of £7,500 to be forfeit to Her Majesty; Censure the Second Respondent and Fine him in the sum of £7,500 to be forfeit to Her Majesty; Find the Respondents jointly and severally liable in the expenses of the Complainers and of the Tribunal including expenses of the Clerk, chargeable on a time and line basis as the same may be taxed by the Auditor of the Court of Session on an agent and client, client paying basis in terms of Chapter Three of the last published Law Society’s Table of Fees for general business with a unit rate of £14.00; and Direct that publicity will be given to this decision and that this publicity will include the names of both Respondents.”

Now over to the Sunday Mail for their report on the case :

money2Lawyers fined after banking £1.43m for mystery clients offshore – with no questions asked

Dec 5 2010 Exclusive by Russell Findlay and Lauren Crooks, Sunday Mail

LAWYERS in a High Street firm have been fined for flouting rules meant to stop money laundering. But George Morton and Malcolm Thomson escaped with their jobs.

Legal watchdogs found that Morton, 58, “completely ignored” procedures put in place to stop criminals laundering dirty money. He continued to do so for over a year despite warnings from Law Society of Scotland investigators. They discovered £1.43million of payments made without proper background checks. Some were in cash and some were for unidentified clients in Jersey and the Virgin Islands.

Thomson, 45, was found guilty of five counts of professional misconduct over breaches in accounting rules.

The pair, who worked for Marshall Wilson Law Group in Falkirk, were each fined £7500 by the Scottish Solicitors’ Discipline Tribunal after they struck a deal which saw some charges dropped. Thomson was named as the firm’s money laundering reporting officer in 2005 – but now admits he is “not a suitable person” for the role.

He was first warned about “serious concerns” after a Law Society accounts check in 2005. Inspections over the next three years raised more fears about money laundering.

In 2007, it was found that the firm “did not disclose money laundering checks on four companies and two people” for payments of £1.43million. Officials were told money laundering could be taking place but Morton, who was responsible for the transactions, did not know the source of the funds.

The SSDT found that his failures to comply with the rules were “very serious” and that he had completely ignored them for a “considerable period of time”. The SSDT found “the breaches of the accounts rules which went to the very heart of the accounting system got worse rather than better during the three-year period”.

Lawyer Jim Reid, who prosecuted the pair, said: “There was no suggestion that money laundering was taking place but lack of documentation left the firm open to money laundering activities.”

Thomson still works at Marshall Wilson. Morton has joined another Falkirk firm, Morton Pacitti. Thomson declined to comment while Morton was unavailable.

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