20/11/2023
Thought Provoking
For Discussion Purpose.
In recent times, there has been a surge in public interest and media coverage surrounding high-profile criminal cases drawing attention to individuals allegedly involved in a range of criminal activities (e.g. cash heists, armed robberies, forced prostitution, dealing in drugs, fraud, racketeering, property hijackings, human trafficking, child slavery, child po*******hy, murders for financial gain by family members, escaping from lawful custody; businesses being managed behind the thick bars of our prisons; Government Officials/ Private Companies/ Professionals, Prominent Public Officials allegedly engaging in illegal entanglements that may be characterized as actions that fall within the category of corrupt activities etc.). As a Compliance Practitioner I deem it fit that we expand the scrutiny beyond alleged perpetrators but to the legal professionals (e.g. Attorneys and Advocates), government departments (e.g. our Courts), private companies or consultants (e.g. Psychologists, private investigators etc.), and financial institutions that get involved post facto (i.e. post-arrest). This article seeks to delve into the legal Anti-money Laundering (AML) implications surrounding the sources of funds used to pay for legal representation, bail, and related services in such cases.
The Enigma of Legal Representation:
One intriguing scenario arises when an alleged offender, lacking formal employment or known business, or affluent background, opts to commission a legal team to defend themselves against criminal charges. The question that looms large is: How can these individuals afford to employ a team of lawyers, often led by an advocate, along with other professionals for investigative support as well as taking matters for appeal and even to the Constitutional Court?
1. Money Laundering Concerns:
In its simplest form, Money laundering can be described as a scheme in which criminals try to disguise the identity, original ownership, and destination of money that they have obtained through criminal conduct. Examining this from the lens of money laundering, as defined by the Prevention of Organised Crime Act, 121 of 1998 (POCA) and administered using the Financial Intelligence Centre Act, 38 of 2001 (F**A as amended), the Prevention and Combating of Corrupt Activities Act 12 of 2004 (PRECCA) and the Protection of Constitutional Democracy Against Terrorist and Related Activities Act 33 of 2004 (POCDATARA as amended) raises essential questions. The Professionals involved in the defense, i.e. lawyers, social workers, psychologists, private investigators etc. must endeavor to take measures to ensure that the fees they charge do not stem from illegal sources or the proceeds of the same crime their clients are charged. Aren’t these professionals inadvertently assisting in disguising the true origin of funds, potentially violating the POCA and related Acts?
2. Scrutinizing Legal Fees:
There is a need to assess whether lawyers and other professionals providing services in defense of individuals accused of having committed any of the above crimes are paid from the proceeds of crime. If such discoveries are made, what legal repercussions are in place, especially if the accused is ultimately found guilty?
3. Bail Money and POCA:
When an alleged offender is granted bail, protocols should be in place to verify that the funds are not from illegal sources. If bail money, which is often transacted through the banking system (even if its cash), is from illicit activities, does this implicate the courts in contravention of POCA and other related Acts? Interestingly, what happens when the individual is convicted and the “convict” is now refunded the bail money by the courts, does this not amount to the perfect cleansing of funds by the Justice Department?
4. Banks and Money Laundering:
Legal fees and bail money transactions often pass through the banking system, raising concerns about the role of banks in preventing the laundering of illegally sourced money. It becomes imperative to scrutinize banking channels to ensure they are not unwittingly participating in facilitating the laundering of illicit money.
Conclusion:
The legal conundrum surrounding high-profile criminal cases demands thoughtful consideration. While individuals are entitled to legal representation, being treated fairly and presumed innocent until proven guilty under the law, questions about the sources of funds used to pay for these services should not be overlooked. Striking a balance between upholding legal principles and preventing the inadvertent facilitation of money laundering remains a challenge for the justice system, legal professionals, and financial institutions alike. This discussion serves as an invitation for further examination and dialogue on this complex issue.
Kind regards
Thabo Moorosi.
Managing Director
Compliance Risk Management/ AML & Sanctions Risk Management/
