Fraud
We do not tolerate fraud within the profession. Those we regulate are in a position of trust. Personal integrity is central to their role. Some criminals try to use law firms, and those connected to them, in their activities to lend credibility to their actions.
Below are common examples of frauds that can involve those we regulate. The person or firm may—or may not—be aware of their involvement.
Mortgage fraud
This happens when a mortgage is arranged by misleading the lender. Misleading information persuades the lender to lend money they would not otherwise agree to lend.
Law firms are gatekeepers of the mortgage market and provide an essential safeguard for lenders. The integrity of a law firm reassures lenders that all necessary checks are carried out before funds are released.
Indications a lender may have been misled
- The true purchase price is not disclosed to the lender.
- The borrower's true financial position is not disclosed to the lender.
- The lender is not told about allowances for chattels, repairs or incentives by builders selling new properties, such as free holidays.
Money laundering
Money laundering is a process used by criminals to make illegally obtained money appear legitimate.
Criminals target law firms because their bank accounts are a secure way of transferring criminal money. Once it passes through a law firm's account, the money looks as if it has come from a legitimate source. A firm might be unaware they have been targeted in this way. However, if you think a person or firm regulated by us could be involved, contact us immediately (by emailing or writing to our Fraud and Confidential Intelligence Bureau).
If a legal adviser or firm has not provided a legal service and has simply allowed money to pass through their bank account, it might be an indication that they are involved in money laundering.