Mortgage fraud news25/09/2008 UK press highlights potential for money laundering activity

Recent UK press coverage has warned that reports of money laundering activity undertaken through mortgage fraud are likely to increase under the worsening global economic situation. The Law Society has further warned that governmental interventions to stimulate the economy, such as the adjustments to stamp duty, mean that solicitors must be alert to new fraud issues, particularly Stamp Duty Relief Fraud.

The BBCs interview with David Kirk, head of the Fraud Prosecution Service for England and Wales, carries the warning that Mortgage fraud has come back with a vengeance because of the credit crunch, and organised crime is moving into mortgage fraud. Similarly, the September issue of Accountancy magazine warns that money laundering is a key reason for criminals to seek to acquire mortgages fraudulently, alongside identity fraud. Similarly,

The Solicitors Journal, in turn, draws attention to the rise in the number of mortgage fraud cases being heard in 2008, and notes that these are largely drawn from criminal charges relating to activity before the credit crunch, suggesting more are to follow as a result of the economic downturn.

Earlier this year, the Law Society began collaborating with the National Fraud Strategic Authority to improve knowledge in the legal sector of the ways in which solicitors can avoid being exposed to offences involving the proceeds of crime. A spokesperson for the Law Society said, We look forward to being part of this partnership, coordinated by the NFSA, and to continue our role in educating the legal profession on this important issue.

The importance of money laundering activity undertaken through mortgage fraud can be seen in the estimate, made by the Association of Chief Police Officers, of £700 million lost by UK financial firms in 2007 to organised criminals. This figure did not include others in the Regulated sector, such as brokers, conveyancers and solicitors. The ACPO warned that fraud is made possible through professionals engaging in criminal acts or through lack of appropriate anti-money laundering training.

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