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The Facilitation of Money Laundering by Legal and Financial Professionals: Roles, Relationships and Response

Benson, Katie Jane

[Thesis]. Manchester, UK: The University of Manchester; 2016.

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Abstract

Law enforcement organisations and intergovernmental bodies, such as the Financial Action Task Force (FATF), have become increasingly focused on the role that legal and financial professionals play in the facilitation of money laundering, with claims that stringent anti-money laundering controls and increasingly complex laundering methods have led criminals to become more reliant on the services provided by professionals to manage their illicit funds. As a result, a number of legislative and policy measures aimed at preventing professionals from becoming involved in money laundering have been implemented at national and international levels. However, the role played by professionals in the facilitation of money laundering has received limited academic attention and there has been little empirical research in the area, resulting in a lack of understanding about the nature of this role and allowing an official narrative about professionals’ involvement in money laundering to persist without challenge.This thesis explores the role of legal and financial professionals in the facilitation of money laundering, using the concept of ‘situated action’ to explain the actions of professionals involved in laundering criminal proceeds, and an analytical framework which directs attention towards the relationship between these actions and the organisational setting and wider contexts in which they occur. The thesis also considers the criminal justice and regulatory response to professionals’ involvement in money laundering in the UK. The research utilised a qualitative methodology, combining semi-structured interviews with individuals from law enforcement and criminal justice bodies, regulatory bodies, and the relevant professions, with data on 20 cases of professionals convicted of money laundering in the UK. The research found that the facilitation of money laundering by professionals is complex and diverse, comprising a variety of actions, purposes, actors and relationships. While some professionals are complicit in the laundering, many cases involve a more ambiguous ‘grey area’ of intent, which is not about making a deliberate choice to offend or taking opportunities to facilitate money laundering. Instead, decisions to proceed with transactions involving criminal proceeds are shaped by the nature of the occupational role, social relationships and dynamics, and the particular circumstances leading up to and surrounding the point at which the decision is made. A mixed response, involving both criminal justice and regulatory processes, may be the most effective approach to professional involvement in money laundering. However, there are a number of problems with such a model at the current time, including a lack of communication and trust between law enforcement and regulatory bodies, and limitations in the scope of regulation.