An urgent warning has been issued to local attorneys-at-law, against being lured into a possible money laundering scheme, involving “large sums” of United States dollars from overseas “clients”.
The matter has reached the Barbados Bar Association (BBA), whose president, Rosalind Smith-Millar, sent correspondence last week to the legal fraternity, urging members to steer clear of the possible scam that involves attempts to move significant sums of foreign currency into the local banking system, through at least one commercial bank.
Correspondence seen by this newspaper, suggests that some of the island’s more than 1000 attorneys-at-law, were contacted and funds sent to them to be deposited in the bank.
According to the Bar president, a commercial bank had alerted the Bar Association that “presentation by a number of lawyers to the bank of a number of similar cheques, raised a red flag”,
Smith-Millar, a Queen’s Counsel, informed local lawyers that the commercial bank had drawn to the Bar’s attention “a possible money laundering scam attempt amongst lawyers in Barbados”. She said a few lawyers had also contacted her directly concerning the matter.
Explaining how the scheme appeared to work, she said in a letter to her colleagues: “The scenario is that various lawyers have been contacted with a request to assist with an asset sale to a large local company.
“The reports indicate that the requests have come by email using identical language, from different people, at different companies, in different countries.”
According to the Bar president, once dialogue is established with the lawyer and the lawyer’s address is provided, “a cheque for a large sum in US dollars arrives via courier, with a request to deposit the cheque.”
But Smith-Millar warned lawyers, many of whose practices have been negatively impacted by the COVID-19 pandemic, to “please be very cautious” in these dealings.
She informed members that she was forwarding the information to the“regulator, the Compliance Unit, Anti-Money Laundering Authority, for its “reference and information”.
When contacted this week for comment on the situation, Smith-Millar told BarbadosTODAY, in a written response to questions: “The Bar Association has provided anti-money laundering and combatting of financing of terrorism (AML/CFT) training for its members from time to time and encourages members to seek out the many opportunities for training available from independent sources.
“All members should, therefore, be aware of the dangers of being targeted, as well as their obligations to guard against being used in this way.”
The Bar president was also asked whether any attorneys had unwittingly become part of the scheme and were now trying to extricate themselves. She responded: “I am not at liberty to discuss any details. Suffice it to say that several members of the Bar contacted the association about a situation, as did one of the commercial banks.
“The association promptly alerted all members, as well as our AML regulator, of the possible danger and advised caution should the situation described come to members’ attention.”
Quizzed about the implications for professionals like attorneys, should they find themselves caught up in the scam, Smith-Millar added: “I am not aware of any member having fallen victim to a scam, and even if I was aware of any particular cases, I still would not be at liberty to share any information.
“The rules about reporting suspicious activity and prohibiting tipping off are quite clear, and I expect members of the Bar to comply with the laws and the published guidelines for our profession.”
The updated AML/CFT guidelines for attorneys-at-law issued in November 2019, describes money laundering as the act or attempted act to disguise the source of money or assets derived from criminal activity. It is the effort to transform “dirty” money, into “clean” money.
The money laundering process often involves the placement of the proceeds of crime into the financial system, sometimes by techniques such as structuring currency deposits in amounts to evade reporting requirements or co-mingling currency deposits of legal and illegal enterprises.
It also involves the layering of these proceeds by moving them around the financial system, often in a complex series of transactions to create confusion and complicate the paper trail; and integrating the funds into the financial and business system so that they appear as legitimate funds or assets.