House-selling competitions may lead to money laundering offences

Every so often, there is a wave of house-selling competitions or lotteries and it is well-known these can be a legal minefield for a number of reasons but they can also have implications under the Money Laundering Regulations 2007.

In its Practice Note on house selling competitions, The Law Society points out a number of issues of which solicitors should be aware.

Criminal activity will often generate large amounts of cash in smaller denominations. Integrating this cash into the mainstream financial system often poses a challenge for criminals.

In house-selling competitions, the price of the raffle tickets usually is low (under £100) and the number of tickets is very high (in the thousands). A criminal could use this opportunity to launder money by purchasing a large number of tickets under their own name, through money mules or under aliases.

There is also the opportunity to launder through refunds if the draw does not go ahead or if the draw is manipulated in the criminal's favour.

Any solicitor instructed in such a house-selling competition, either for the winner or seller, could be at risk of involvement in a criminal offence even if the funds do not enter the firm's client account. Depending on the lawyer's knowledge or suspicion with respect to the criminal property, there is still a risk of committing an offence.

The field of property conveyancing is an area of particular concern for legal firms in the context of the Money Laundering Regulations 2007 because of the large sums of money handled. The need for identification and cognisance of potential criminal patterns of behaviour in the context of know your client is paramount in protecting the solicitor's interests.

ML Solutions 4U is able to assist your firm with the customer due diligence process through its connections with an independent provider of identity verification enabling rapid online interrogation of a wide range of approved positive and negative data sources. This provides a quick and cost-effective solution to the "know your client" requirements.

Its experts are also able to provide full training to enable all members of staff aware of the potential money laundering pitfalls of becoming involved in house-selling competitions.

For more information regarding the assistance that ML Solutions 4U can offer your organisation with the customer due diligence measures, please complete the online enquiry form or telephone an anti-money laundering advisor on 0845 402 0001.

Money Laundering Information » Money Laundering Regulations and House Selling Competitions