Singapore Hits Law Firms With $200,000 in Fines Amid Ongoing AML Investigation
Singapore Ministry of Law imposed a total of $200,000 fine on three law firms over the charges of anti-money laundering compliance failures linked to the country’s largest money laundering case in Aug 2023.
The ongoing investigation opened an inquiry into 24 law firms; 13 of those firms reached an enforcement conclusion, and three among them now face a combined fine of $200,000. However, the investigation of the remaining 11 firms is still going on.
Anthony Law Corporation (ALC) received the highest penalty of $100,000 as it failed to scrutinise its clients as required by the law. It handled the conveyancing process of 25 properties by 9 individuals. Additionally, the properties worth $135 million were processed without fulfilling the essential compliance checks, leading to the imposition of a fine on ALC.
On top of that, Legal Solutions LLC was fined $70,000 due to inefficient analysis of the client’s assets, and Fortis Law Corporation was fined $30,000 due to its failure to verify the client’s claims of a legitimate income source.
A few other firms, including Malkin and Maxwell LLP and Templars Law LLC, were issued a reprimand only, and no financial penalty was imposed. Lawyers involved in these cases were referred to their respective Law Society for possible disciplinary action. It all came with huge reputational damage for those law firms and the lawyers.
The investigations and the enforcement actions were initiated after the country faced its largest money-laundering case in August 2023. The Singapore Police Force conducted an operation and revealed the money laundering of assets worth $3 billion. Investigators say the suspects converted their allegedly illegal wealth into real estate investments and other premium purchases to make their funds appear to be legitimate.
Some of those property deals were facilitated by highly reputable law firms in Singapore; their role was to help those clients in the conveyancing process. The authorities concluded that these law firms did not follow the procedure required by the Legal Profession Act 1966. This law demands that firms follow clear measures, including risk assessment, source of wealth verification, and transaction monitoring.
The consequences of compliance failure serve as a wake-up call for other firms as well. Legal firms need to formalize and regulate their AML policies to protect their company against any wrongdoing from happening. Not only is this essential for any particular firm’s reputation, but it also serves their legal agenda of justice and the rule of law.
