I’ve just watched a Channel 4 documentary called “From Russia with Cash”. The premise is that two investigators go undercover as Russian PEP Boris and his ditsy girlfriend Nastya, and trip around the swankier parts of London looking at five high-end properties, each shown to them by a different estate agent. Boris is completely up-front with each agent: he tells them that he is in charge of procurement at the Ministry of Health, on a small salary, but that from every contract that he awards, a little bit finds it way into his pocket. He wants to buy a property, but with complete discretion: neither his employer nor his wife must be able to link it to him. And not one of the estate agents bats an eyelid. Of course, I can understand the awkwardness of the situation; you can’t back off with a look of revulsion, not least because Boris probably has friends in low places. And no-one wants to look like a prude, when Boris confesses that he’s buying a London pad in order to get laid. But the really worrying aspect of it all is the complete misunderstanding by these estate agents of their legal obligations.
Quick revision. The Money Laundering Regulations 2007 require certain businesses – including estate agents – to do AML checks and due diligence on their clients. These agents were all acting on behalf of other people (the vendors of the properties), so no need for them to worry (legally, I mean – morality is another issue) about AML checks on Boris. But then we also have the Proceeds of Crime Act 2002, and its five money laundering offences that apply to everyone. Everyone. Yes, even estate agents meeting Boris. So these agents who happily tell Boris that, yes, of course they would sell a property to him, and yes, they can recommend a lawyer who can help him set up a Cypriot company with nominee directors so that Mrs Boris cannot find his London shag-nest – how is this not the PoCA s328 offence of entering into or becoming concerned in an arrangement that helps someone else to launder their money? In the case of this documentary, none of the sales went ahead – I don’t think the investigator had quite that money to spare. But all the estate agents were willing to proceed on that basis, thinking (hoping?) that as Boris was not their client, they were absolved from all responsibilities under the primary legislation. And not one of them made a SAR to his MLRO about Boris’s confessions of corruption, so how is this not the s330 offence of failure to disclose by someone working in the regulated sector? What on earth are their MLROs telling them? Take the money and run?