Dark Money Investigations: Opinion

Lawyers should be put in the dock for accepting oligarchs’ stolen money

Loopholes in UK law allow legal professionals to take dodgy money for their services. Here’s how to stamp the practice out

George Turner
14 March 2022, 12.01am
Like anyone else, lawyers working for kleptocrats and oligarchs are subject to laws against money laundering
Richard Baker / Alamy Stock Photo

Many deplore the amorality of the legal profession in servicing corrupt business people and dictators. But a bigger, more important question needs to be asked. Have lawyers broken the law in doing so?

In recent days, some members of the legal profession have sought to explain the embarrassment of riches earned from wealthy Russians of questionable backgrounds by citing the higher cause of making sure that everyone has access to legal advice.

As one barrister put it: “You wouldn’t name a dictator’s doctor and start claiming that by providing medical services to a patient they are immoral.”

Indeed, you would not – because medical professionals are under an obligation to treat any patient, regardless of who they are, according to their clinical need. Solicitors are not. While anyone accused of a crime is entitled to a defence, regardless of how heinous that crime is or their apparent guilt, solicitors are under no obligation to take on a client who wishes to attack a business rival through the civil courts.

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There is only one reason why London’s legal, tax, accountancy and other professional services have been so happy to serve kleptocrats of all nations – money.

Guilty of money laundering

Look at where that money comes from and some awkward questions arise, because people working in the professional services, like anyone else, are subject to laws against money laundering.

In 2011, a young barrister called Jenny Holt – described by the fawning trial judge as “the sort of daughter every parent would be proud of” – was convicted of money laundering in the Isle of Man. Her alleged crime was accepting from a client money that had been stolen to pay the defence fees in a much larger money-laundering case.

The conviction was eventually quashed (after a mistake in the judge’s summing up rendered the conviction unsafe in the eyes of the Privy Council), but no one questioned the fact that a lawyer who knowingly accepts stolen money from a client – even in circumstances where the lawyer is defending their client from a serious criminal charge – constitutes money laundering under the Proceeds of Crime Act.

As one leading legal commentator put it: “The circumstances of [Holt’s] case send real shivers down the spines of professional advisers who have accepted tainted funds as payment for their fees.”

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A quirk in the law means that such prosecutions are easier in the Isle of Man than in the UK. The UK version of the Proceeds of Crime Act contains a provision allowing people to acquire stolen money in return for “adequate consideration". This allows professionals to provide services, paid for out of the proceeds of crime, if those services are provided at the market rate.

However, this defence is not watertight. If a professional deploys their services in furtherance of a crime (for example, tax evasion), it does not apply. Nor is there a defence if the charge relates to “facilitating the handling of stolen money” – that is, taking stolen cash and passing it to someone else – rather than accepting it as payment for your own work.

It was on this basis that Bhadresh Gohil, the UK lawyer acting for the corrupt Nigerian governor James Ibori, was sentenced to ten years in prison in 2010 for money laundering.

Dirty money, dirty hands

Given the billions that have flooded London’s professional services industry following the looting of state assets in Russia and Eastern Europe since the fall of communism, is it credible to believe that no professional accepting this loot has themselves committed a crime?

After all, an attractive feature of London is the willingness of our professional sector to help its clients hide that money offshore, which in itself could be connected with tax evasion.

Even within the professions, there is an acceptance that dirty money has left some with dirty hands. In early March, in the House of Commons, Tory MP Bob Seeley raised whistleblower concerns that some firms were not doing proper checks on their clients. “Some actually have a list of people that they specifically do not do those checks on because they know that they are inherently corrupt and inherently criminal,” he said.

Is it credible to believe that no professional accepting this loot has themselves committed a crime?

So let us drop the false and perverse argument that lawyers are under some moral obligation to accept the proceeds of crime in pursuit of the maintenance of justice and the rule of law.

If there are reasons to believe that law firms have broken the law – and evidence that some are purposefully not implementing anti-money laundering controls in order to turn a blind eye to dirty money provides more than enough reasons – they should be properly investigated.

A task, perhaps, that should be on the agenda of the National Crime Agency’s new cell for combating kleptocracy (which needs to be more ambitious than simply a ‘cell’ if it is to work).

Another useful initiative would be to remove the ‘adequate consideration’ defence that protects professionals from providing services in return for stolen money, and bring our legislation up to the same standards seen in that (ahem) great bastion of financial integrity, the Isle of Man.

After all, it would be a hollow victory in the fight against economic crime if we were to sanction some individuals in a time of war while leaving those who facilitate their crimes in peacetime to walk free.

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