Lawyers and legal professionals are frequently used in money laundering schemes, particularly through trust accounts that offer anonymity and client privilege protections.
Option A (Correct): Repeated wire transfers from unknown sources followed by immediate outward transfers suggest that the lawyer's trust account is being used as a pass-through account for laundering funds.
Option B (Incorrect): If legal services were actually rendered, this is a normal transaction unless other risk factors exist.
Option C (Incorrect): Receiving funds from a regulated insurance company is not inherently suspicious, unless the transaction is inconsistent with the lawyer's usual business activity.
Option D (Incorrect): Large transactions are normal in real estate purchases, as long as proper documentation exists.
Red Flags in Legal Sector Money Laundering:
Use of lawyer trust accounts to move funds with no legitimate business purpose.
Frequent transactions from high-risk jurisdictions.
Transactions that are inconsistent with the lawyer's area of practice.
Clients who refuse to disclose the source of funds.
Best Practices:
Apply AML measures to law firms handling financial transactions, as required by FATF's Designated Non-Financial Businesses and Professions (DNFBPs) guidelines.
Require enhanced due diligence (EDD) for high-risk clients and unusual transactions.
Reference:
FATF Report on Legal Professionals & Money Laundering
Wolfsberg Group Legal Sector AML Guidance
6th EU Anti-Money Laundering Directive (6AMLD) on DNFBPs