Straight from the judge’s mouth

A friend in Guernsey has sent me a clipping from the local paper (the Guernsey Press) about the latest development in a local laundering case.  For those of you not up to speed, the chap concerned is Paul Ludden, and as reported here he is now serving five years for money laundering.  In short, while working as a banker at SG Hambros he allegedly pinched money from a client’s account (although the theft charges were dropped against him in exchange for his guilty plea to laundering) and spent it on gifts for exotic dancers and an engagement ring for his son to give to his (son’s) girlfriend.  Much was made of those exotic dancers, with Mr Ludden claiming that the client from whose account he took the money actually intended it to be spent to help the women out by giving them cars and watches, and we all enjoyed ourselves enormously.

However, there is of course – as there always is – a victim.  And the fact remains that money was taken from someone’s account.  Although the original victim has since died, his son Colin Palmer says that the estate should not lose out, and so he is suing SG Hambros for the £1,147,581.27 (plus interest and costs) that he says was misappropriated.  What interests me is that we have now another opportunity for the courts to make some useful pronouncements on the AML regime and how it should actually work in practice rather than simple theory.  In court documents filed in Guernsey, Mr Palmer claims – among other things – that SG Hambros did not inform the joint account holders as soon as it became aware of unusual or suspicious activity on the account.  As you will spot straight away, we are talking once again about the nature of tipping off.  Mr Palmer also claims that “the defendant owed the plaintiff a duty of care” – and so, as with the marvellous case of Shah v HSBC, we will get the chance to watch lawyers and judges wrestling (as MLROs do on a regular basis) with the sometimes conflicting obligations within the AML regime.  To your corners, ladies and gentlemen.

This entry was posted in Legislation, Money laundering and tagged , , , , , , , , , , . Bookmark the permalink.

3 Responses to Straight from the judge’s mouth

  1. Graham Thomas says:

    Hi Susan

    As you say, it’s important not to forget the victims in such cases but this looks like it will be an interesting case. From the brief details available, you would think that there is a definite case for the Bank to answer but there are often various complications involved that may change this outlook and you’d assume that Hambros would have settled long ago if things were clear cut.

    Hopefully, it won’t take too long before Mr Palmer has his answer.

    Regards

    Graham

  2. Hi Graham

    I’m off to Guernsey next week, and will try to find out the latest – I’ll keep you posted. That’s why these cases are always so interesting: the requirements are only theoretical until someone tries to apply them and someone else says that they have got it wrong!

    Best wishes from Susan

  3. On 24 January 2015, I received an email from Mrs Gillian Ludden, wife of Paul Ludden, which I reproduce here in its entirety, without editing or comment:

    I have just read your blog. I found it whilst trying to find some way of deleting the misinformation that has been given about my husbands case. The reason the theft and fraud charges were dropped was because there was no foundation to them and there was evidence to show that every transaction had been approved by both Harry and Colin Palmer. Paul laundered money at no benefit to himself for 5 fellow freemasons and the recipients of the cash were Harry and Colin. Colin Palmer himself actually counted the cash that Paul had delivered to him.
    We are trying to put this all behind us now. Paul spent 20 months in prison, and 20 months on parole, and had everything he’d worked for all his life taken from him on the word of a man – Colin Palmer, a man who perjured himself in court, and who has defrauded the HMRC of hundreds of thousands of pounds.
    Paul is trying to get work, but it is not easy when you have a criminal record, and when we see the lies that were written in the Guernsey Press pop up every time his name is googled it just makes things even worse.
    Guernsey has a corrupt legal and banking system, and there is no way that one can defend oneself, and no higher authority to complain to.
    Gillian Ludden

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s