Risk Update

Risk Roundup — Law Firm AML Falling Short? Real-estate Rental Relationship Causes Conflict

Posted Dan Bressler

“Reality of law firms’ approach to AML not living up to their policies” —

  • “There is a difference between many law firms’ anti-money laundering (AML) policies and procedures, and what actually happens in practice, the Solicitors Regulation Authority (SRA) has found.”
  • “It also revealed that nearly two-thirds of the firms it reviewed in the first year of a new programme of AML checks needed ‘some form of engagement’ with the regulator as a result.”
  • “The regulator said, in a report published this week, that these failings included ‘a lack of an effective compliance framework, or indeed a lack of any AML policies, controls, and procedures at all.'”
  • “In other cases, at least half the files reviewed had “serious issues” such as a lack of due diligence, or the firm had a money laundering compliance officer who ‘did not appear to understand their obligations and was failing to carry out their role properly.'”
  • “The SRA said that a large number of files showed differences between the firm’s policies and procedures and ‘what actually happened on the ground.’ However, the regulator said the law firms were ‘for the most part, united in their determination to keep the proceeds of crime out of their client accounts, and we were able to assist many of them in meeting their obligations.”
  • “Speaking at the SRA’s virtual COLP and COFA conference yesterday, Zoe Allen-Robinson, its AML proactive supervision manager, said the majority of law firms ‘took their obligations seriously.'”
  • “Suzie Ogilvie, global head of financial crime and sanctions at top City firm Freshfields Bruckhaus Deringer, said the pandemic had created ‘a number of challenges’ in terms of AML, such as a rise in impersonation frauds because lawyers were not meeting people face-to-face.”

“NJ Judge Disciplined for Refusing to Step Down From Her Landlord’s Cases” —

  • “Lilia Munoz, a municipal court judge in Union City and Guttenberg, has been reprimanded by the state Supreme Court for a long-running and undisclosed conflict of interest.”
  • “Munoz violated the canons of judicial conduct by presiding over multiple cases in which parties were represented by Ramon Gonzalez, an attorney who rented office space to her, the court said in an order made public on Monday.”
  • “Gonzalez, who has his own law office in the same building, received rent payments from Munoz from 2008 to 2018 for a law office in a building in Union City that he and his spouse owned. And during that time, Gonzalez appeared before Munoz as counsel of record numerous times, in both Union City and Guttenberg, according to the Advisory Committee on Judicial Conduct complaint.”
  • “Munoz, through her defense attorney, Robert Feder, admitted to the allegations in the complaint and that those facts constituted violations of the Code of Judicial Conduct, according to a stipulation issued by the committee.”
  • “The court also found Munoz violated an ethics rule requiring judges to disqualify themselves in proceedings where any factor might preclude a fair and unbiased hearing and judgment, or which might reasonably lead attorneys or parties to believe so.”
  • “Among the various levels of discipline imposed on judges who commit ethical violations, a reprimand is more serious than an admonition, but less so than a censure, although each has a similar practical impact on the life of the judge.”