Fraud alert revived

Fraud alert revived

Cashroom managers and money laundering reporting officers should be aware of new concerns regarding a potentially fraudulent scheme that attempts to involve solicitors in bogus property investments. An alert was issued in July 2012, but new information suggests it remains a live threat to Scottish solicitors.

In 2012, firms were approached by potential new clients about the scheme, which included:

• The presentation of suspected false documentation, with foreign company details and emails showing that companies located in the British Virgin Islands, Spain or Hong Kong were investing large sums against the security of one-year BNP Paribas bonds with a face value of €200 million.
• The claim that some of the funds were to be used to purchase properties in Scotland valued between £250,000 and £4 million, including residential properties and buildings suitable for development into flats.

The information suggested that the approaches to solicitors were part of a scam to create an air of legitimacy and attract unsuspecting investors to invest money in the scheme, which would be appropriated by the subjects.

Specific details may be different on this occasion, and solicitors are recommended to:

• be alert to the risks of such proposals;
• complete comprehensive "know your client" checks on new clients;
• carry out robust source of funds checks;
• be aware of the money laundering risks posed by the misuse of solicitors' client accounts to launder funds;
• submit suspicious activity reports (SARs) to the National Crime Agency when suspicious schemes are presented to them;
• contact the Society's Professional Practice team for further advice.