17 Sep 2015
The first criminal prosecution in Jersey for failing to file a Suspicious Activity Report has resulted in acquittals for both the individual and corporate defendant charged.
STM Fiducaire Ltd, a Jersey-based wealth management business, and an employee of STM, Michelle Jardine, were prosecuted for offences under the Proceeds of Crime (Jersey) Law 1999 (“POCA”). The defendants had been charged with the alternative offences of “Failure to disclose knowledge or suspicion of money laundering” and “Failure in a financial institution to report to designated police officer, designated customs officer or nominated officer” contrary to sections 34A and 34D of POCA. Both offences carry potential penalties of up to five years’ imprisonment.
The four day trial dealt with allegations surrounding conduct dating from 2011, when Mrs Jardine was the MLRO and director for STM. According to a report by the law firm who represented the defendants, it was the prosecution’s case that:
“Mrs Jardine and STM failed to report a ‘suspicious’ transaction involving a politically-exposed person (or PEP) from a high-risk jurisdiction, in circumstances where the funds were remitted to them by an unknown third party”.
The Royal Court is said to have heard evidence from:
“[Jersey Financial Services Commission] officials, members of the Jersey Financial Crimes Unit, as well as from Mrs Jardine. During the course of this evidence the Court … was referred to the Codes of Practice issued by the JFSC and to the various factors to be considered when assessing whether or not there is a risk of money-laundering”.
On behalf of the defence it was apparently argued that:
“… in deciding to convict under either of these offences, the Court would set an extremely low criminal threshold for the finance industry as a whole as to when suspicious activity reports should be made”.
The senior partner at Collas Crill, the law firm representing Mrs Jardine, is reported to have said:
“This is the first time anyone has faced a criminal prosecution for failing to file a Suspicious Activity Report as opposed to facing civil regulatory sanctions, and whilst alarm bells should sound when dealing with PEPs and high-risk jurisdictions, this Judgment has shown that, with prudent and diligent background searches, the processes undertaken by Mrs Jardine can withstand scrutiny.”
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