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.