20200825 Busy Bees or Busy Work?

20200825 Busy Bees or Busy Work?

Nigel Morris-Cotterill


It′s been a busy few weeks in financial crime. One has to wonder how much of it is pent-up action that people have found ways to do since the world began working from its back-bedroom or the kitchen table and how much of it is people trying to keep busy so they look as if they are achieving something when they haven′t found ways to perform their normal duties effectively.

Courts have been busy: around the world Justice Systems have found ways to bring more cases to trial or, at least, a conclusion and now the backlog is being cleared. Of course, those who think that doing deals with wrongdoers so they don′t record a criminal conviction is a good idea see an opportunity to expand this particular form of perverting the course of justice in which large sums are paid in order to avoid having a conviction recorded. So there is a rush of ″settlements,″ too.

But that′s not where we are seeing the bulk of what seems worryingly like ″busy work.″ Or in some cases, work that might have been done years ago if people weren′t so busy flying around the world holding meetings: their productivity seems to have been increased.

We have seen in the past six months an unprecedented deluge of notices and protocols from governments, supra-national inter-government bodies, self-appointed groups and the like. Many are deeply worrying on several levels, not the least of which is that, in one case, the Group promoting supposed good practice amongst others clearly has its own members who do not follow it. How do we know? Because their names are in case reports on a very regular basis, usually for very extensive failures.

Government agencies and quasi-autonomous national government organisations, such as financial sector regulators, are at fault, too.

This week saw the publication of a notice by several US Federal Regulators and Agencies about dealing with Politically Exposed Persons. It′s facile in the extreme and, worse, appears to say that the USA is open for business; that those who have benefited from corruption are welcome to send their money to US Banks which are not required to take special care in relation to such persons. Even more, domestic corrupt persons need not worry because the protocols don′t apply to them at all.

It′s an absolutely bizarre notice. You can read it here:


Here′s a bit of free advice: if you launder money you are a criminal and the fact that a regulator said you don′t need to identify politically exposed persons, much less perform so-called enhanced due diligence on them, doesn′t mean you don′t get prosecuted if you actually launder their criminally derived assets.

That links into another event in the past few days in what seems to be the end of a fascinating affair involving a law corporation in London and money from places and people with far too few vowels in their names for we users of Greco-Latin languages. The Solicitors′ Disciplinary Tribunal has concluded the matter of the Solicitors′ Regulation Authority and Natalia Levinzon. The case was concluded ″on the papers″ with no need for a congregation in a room and no need for travel in an example of how justice systems are working around the problems caused by CoVid-19, even in England where restrictions are far more lax than many other countries. It′s also a ″judgment on an agreed outcome″ i.e. a settlement in which the most severe punishment is avoided, so demonstrating my second point at the beginning. It also ties in with the US regulators′ notice referred to previously.

Note that, amongst the allegations, is that she did not properly identify or perform enhanced due diligence on politically exposed persons.

Over a period of six years or so, Levinzon was a partner with Alexander Dobrovinksky & Partners LLP, which no longer exists. She was, from February 2013, the company′s compliance officer and, from 2018, the company′s money laundering reporting officer.

In the light of that, this is extraordinary: in breach of various, and successive, sets of regulations, ″Between February 2013 and January 2019, she failed to have an appropriate anti-money laundering policy in place … Between 26 June 2017 and January 2019, she failed to ensure that the Firm had a firm wide risk assessment in place...Between February 2013 and January 2019, she failed to provide to employees of the Firm, or to undertake herself, any or adequate training in relation to the money laundering regulations...In around April 2015, she failed to correctly identify clients IT and PT (by virtue of his family connection to IT) as PEPs...Between around April 2015 and January 2019, she failed to apply enhanced customer due diligence measures and enhanced ongoing monitoring in respect of clients IT and PT...″

There are other allegations, mostly of an accounting nature which don′t concern me.

This is the Tribunal′s opinion: ″The Tribunal found that there was a need to protect both the public and the reputation of the legal profession from future harm from the Respondent by removing and thereafter restricting her ability to practise, but determined that neither the protection of the public nor the protection of the reputation of the legal profession justified striking the Respondent off the Roll. ″

So, she has been suspended for nine months and ordered to undertake a course of training in ″anti-money laundering″ (thereby meeting a statutory obligation so that′s nothing), Solicitors′ Accounts (which she must have passed an examination in as part of her qualification, if she was admitted in England, which she was) and Professional Ethics. The courses must be ″agreed″ in advance by the Solicitors′ Regulation Authority and certificates of attendance submitted for records. Following the period of suspension, she will be subject to stringent conditions.

The Tribunal was not invited to take note of any actual money laundering (if there was, indeed, any) and appears to have decided not to ask that question. Given that the case relates to purely regulatory failures, the result might seem fair.

However, the company failed and she was responsible: that is, on the face of it, a breach of the Money Laundering Regulations (each of various versions) and as a result, there is, on that basis alone, a clear implication of conduct which can result in a criminal conviction.

In all the circumstances, it seems, Levinzon got off very lightly indeed.

This all ties in nicely with the past few weeks here. Real work, very busy! Not ″busy work″ at all.

We′ve created a new ″link domain″ for the e-learning platform so it′s easier to type and remember: www.financialcrimetraining.com. Same place, shorter URL.

The following courses are now available:

Essentials: Lawyers and Money Laundering – for all lawyers and all that deal with them. It′s a global approach that shows that lawyers are at risk of similar problems globally – and that they present similar problems globally to the banks and even other lawyers that deal with them.

Essentials: Correspondent Banking, Value Transfer Systems and Remittances. Once we get down to it, these have more in common than they have differences. And they face – and present – very similar risks.

Micro-course: Deutsche Bank ats New York Department of Financial Services ″The Epstein Case″ - critical and risk analysis including a novel threat that is long overdue and a strange benefit from the decision.

Case Studies – Criminal Cases. Our biggest selling course is a collection of financial crime case studies – always from the judgments – no ″X has been charged with...″ here. Some cases are essentially notes, others are detailed analysis of judgments and other court documents.

How money launderers use Retail and Business Banking and Lending is suitable for front-liners and junior compliance staff, plus those officers who are in senior positions but not yet familiar with the issues they face.

Taking our courses is something you can usefully do while working from home. It′s not busy work and you get a certificate, too, which ties nicely in with all the above :)

Be happy, safe and well

Nigel Morris-Cotterill

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Financial Crime Risk and Compliance Training.

Essentials: lawyers and money laundering, etc.

Lawyers are both victims and perpetrators of money laundering, etc. schemes. Therefore they present risks to themselves and others. This course is for lawyers and all that deal with them. Non-jurisdictional.