City law firms investigated over drug cartel money laundering

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The Independent Online
SIX MAJOR City of London law firms are being investigated on suspicion of laundering profits from drug trafficking, gun-running and contract killings by international racketeers including Colombian cocaine barons and the Mafia.

The firms, which include household names in the City, are working as fronts for organised crime, according to the National Criminal Intelligence Service. They are suspected of laundering money for clients that include crime syndicates in eastern Europe, Italy and the US, British gangs and the Colombian cartels.

An NCIS spokesman yesterday declined to identify them, but said: "They are well-known, allegedly respectable City of London firms."

Police sources said arrests were imminent. They said the alleged laundering was being carried out by individual solicitors, rather than as a corporate operation. One source said: "It is a case of one or two, or maybe more solicitors within the firms being involved. We are not saying that the firms are institutionally corrupt from top to bottom, although the principals in some firms may know what is going on."

The lawyers involved have allegedly set up complex financial arrangements to disguise the origin of the "dirty" money. They are believed to contribute significantly to a flourishing industry that has made London a global laundering centre.

The legal profession's suspected links with international crime were first disclosed by Detective Chief Inspector Simon Goddard, head of NCIS's organised and economic crime unit, in an interview with The Lawyer, the trade magazine.

Det Ch Insp Goddard said: "These firms are actively working on behalf of organised crime. They know who their clients are and how their clients make their money, and they know it is not from a legitimate activity. This money represents heroin and other hard drugs on the streets of London. It represents vice money."

The laundered money is allegedly wired from the country of origin, and deposited by solicitors in a client account in London in order to give it an air of legitimacy. It is then moved to a private offshore account set up specifically for that purpose.

The investigations - launched on the basis of intelligence gathered by NCIS - are being carried out by the City of London police. In the case of some firms, they have reached a critical stage.

The revelation that the City firms are under investigation follows recent criticism by the NCIS of lawyers and accountants for failing to meet their legal obligation to notify police if they suspect that clients are handling money from drugs or terrorism.

The NCIS spokesman said: "It is our very strong view that law firms are not meeting their legal or moral responsibilities."

Det Ch Insp Goddard warned that dishonest solicitors would be prosecuted as energetically as the criminals themselves. "We don't make any distinction at all," he said. "The whole ethos of UK law enforcement is to not only arrest the principals in organised crime, but to seize their assets, and anybody trying to prevent law enforcement from seizing their assets is in trouble."

One of the firms is understood to be relatively small, and police believe that all the partners and employees are aware of the laundering operations.

Det Ch Insp Goddard said the investigations were at varying stages. "We certainly have lawyers who perform the role of the old consigliere [adviser] in the Mafia firms," he said. "In many cases, the lawyer is the first person the organised criminal will go to to assist him in setting up money laundering systems."

He said that were it not for the role played by "professional money launderers", efforts to combat crimes such as drugs and prostitution rackets would be far more successful.

"The bottom line is that if the lawyers were more honest and more diligent, then we would not have the problems that we are having," he said.

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