to think I might be an accessory to a white collar crime?

[CaponeOnTax]

I work in a heavily regulated profession. This has been an insanely busy week so I am only reflecting on this now, even though it all seems obvious in retrospect.

I arrived on a financial transaction mid-way through and didn’t ask about the KYC/anti-money laundering checks on all the parties (which would usually happen right at the start) but early enough.

The key document looks dodgy (USD loan, no interest) and the parties are from high-risk corruption countries. It might be legit, it might not. But I now think it could be money laundering.

I’ve finished my short involvement. I have a broad KYC obligation. So do others on the transaction and they haven’t done anything except progress the transaction.

If I say something now I could be in serious career trouble for not doing anything earlier, when in fact there may be no crime anyway.

AIBU to stay quiet and hope it goes away?

Report it.

You know you need to report this - for all the reasons people have said previously, and also because it is the right thing to do. Money laundering has serious, real world consequences.

I suspect you are mistaken about it costing you your job. Sacking people who make a mistake like this doesn't encourage a speak up culture and is pretty rare. If there isn't an issue then it will be a reminder about processes/training etc. If, on the other hand, there is an issue then the fact you have escalated as soon as you have been identified is likely to be what protects you from being sacked/criminal liability. Say exactly what you've said here - you were brought onto the transaction part way. You mistakenly assumed that the KYC had been completed. Today you discovered that it had not been completed. This raised a red flag for you and on reflection, there are other aspects of the transaction which concern you - the jurisdiction of the parties, the economic terms etc. I would feel free to go via your manager if they weren't involved in the transaction/with the clients but otherwise the Compliance function (MLRO or other person in Risk/Compliance). And if in any doubt Compliance. Do it in writing so there's a clear record of you flagging it.

OP - you must have had training on what to do if there is a suspicion of ML. If you haven't, that's a problem, but it sounds to me like you do know, but are worried about the repercussions.

You should have a whisteeblowing procedure if you are uncomfortable with the reporting lines for some reason, but honestly, just going to the MLRO is your best defence. Don't overthink it, just follow the reporting procedure.

If you know for a fact, KYC hasn’t been done, you have no option but to report it. This is a major fail in your organisation, regardless of whose responsibility it was. And you know this. Please, do the right thing.

It’s hard, I know, but a bit part of why the world is constantly fucked is because people in the middle of the chain of corruption / fraud / other crime etc feel they are not important enough / going to get screwed / someone else will deal with it.

This is all true. However, you are all recommending that I basically lose my job or someone else loses their job for a crime that is very unlikely to be traced or prosecuted. I see why this might be good for the herd, but it is very very bad for me and my colleague who took the work on in the first place.

I suspect you are mistaken about it costing you your job. Sacking people who make a mistake like this doesn't encourage a speak up culture and is pretty rare.

I think this is true and OP you need to keep some perspective. If it helps, have a read about Santander’s fine today as will hopefully put things into perspective for you - www.fca.org.uk/news/press-releases/fca-fines-santander-uk-repeated-anti-money-laundering-failures

Just to add - when you spoke to your colleague about your concerns and saying "I hope AML doesn't find out". Was this in person or over message of some sort?

If it was the latter I would make sure your report of the incident is reflected from that time so it's as honest as possible. You don't want two conflicting timelines if it does turn out to be ML.

No one is going to lose a job over this. Get a grip.
You should report it and trying to cover it up now will look terrible later on down the line.

You wouldn’t lose your job where I work, if you made a genuine mistake and reported it as soon as you realised. You would for covering up.

No one is recommending that you lose your job - I think this is an unlikely outcome for a first, genuine error. And your assessment is off here - you have no clue of the broader circumstances (source of funds/nature of any crime) and therefore no real sense how likely it is the crime of money laundering (if there is one) would be traced or prosecuted. What we are suggesting is the right thing to do from a moral perspective AND is more likely to protect your job.

The lack of documentation for a relatively small loan isn't really an issue - I've seen large money market loans documented with a paragraph for a known customer. However, this is not a known customer, and they are in a questionable jurisdiction. Failure to do KYC is significant.
You need to report this. If the transaction gets flagged and it turns out none of you can demonstrate that you identified the risk then it will reflect far worse on you than flagging up the transaction even at this late stage.
It shouldn't be possible for money to go out of the door without KYC having been done. This sounds like a systems and controls failure as well. How could you have paid away money if the onboarding / CDD process hadn't been done - that sounds like a systemic weakness. How did that happen?
You are more likely to lose your job if the transaction is subsequently investigated.
Do not discuss your suspicion with your line manager if they were involved - go straight to the MLRO.

It might be bad for your colleague but that's their fault and their problem.
You've been left in a difficult situation and need to cover your behind.
Whether it's traced or not isn't the point, the point is if you can get into serious trouble for not reporting it you don't really have a choice.

Oh and as for getting sacked, more likely you'd get a promotion.

Anti-money laundering regulations are there for a reason, every single financial institution has training on this - we have updates when necessary, and in-person training regularly.
IF it is found out to be money laundering and you didn't report, you will be in a whole world of trouble, and losing your job will be the least of them.

At the moment, the team (collectively) have not done their jobs properly, simple due dilligence has not take place and you now know this - regardless of it is ML or not, this needs to be addressed in case the next transaction is a money launderer.
You know you have to report it, so please cover your back and report it. I know its scary and you're worried about repercussions, but it has to be done

Bloody hell OP - nobody is recommending you or anyone else loses their job!

You don't seem to have much of a grasp on what your responsibilities are, yet you've decided that a crime has been committed which won't be prosecuted and the perpetrators will skip off into the sunset whilst you and a colleague will be hauled over the coals?

Hi,
Seriously this is what I’d do and not do.

On Monday, I would talk to the MRLO at your work who is often the head of compliance. Explain that upon reflection over the weekend, you are worried that something has been missed.
They will investigate and you will be better off than if you hadn’t reported.
Under no circumstances report to your boss/deal team/client at all, just the MRLO or your whistleblowing champion who is often an INED.
It might actually be nothing but it’s much better that you flag it for investigation.
One way this might otherwise be found is if one of the agent banks in the chain flag it through their checks and that would be a much worse scenario especially if the client is sanctioned.

It shouldn't be possible for money to go out of the door without KYC having been done. This sounds like a systems and controls failure as well. How could you have paid away money if the onboarding / CDD process hadn't been done - that sounds like a systemic weakness

This, 100%. I wouldn’t physically be able to get the money paid away without the required onboarding/CDD.

OP - the CPS has changed their approach to failure to report a suspicion. They are more willing to prosecute now even if money laundering cannot be proved. If the transaction is flagged and your employer gets into trouble for failing to spot it, you can be certain that they will not protect you from the consequences of your inaction.

Just to add - when you spoke to your colleague about your concerns and saying "I hope AML doesn't find out". Was this in person or over message of some sort?

On a call. I realise this sounds flippant now. My goal isn’t to defeat our AML people, it is just to get on with my job without hassle. However, I have no wish to facilitate ML either.

I am embarrassed the penny didn’t drop sooner - at another time with less stuff happening it would have done, and I would not have done the work I did.

I didn’t facilitate moving the money - my involvement is post-fact - but it is part of a set up for what I suspect is fake litigation. In fact, it occurs to me as I type this that the money may never have gone at all. Fortunately it didn’t move through our accounts.

Fucks sake OP you’ll have done your AML training and you’ll KNOW failure to report is an offence carrying a possible 5 year jail term. You have to report this. And you know you do.

Is it acceptable to make further enquiries before going to MLRO if I know that these will not tip off the client?

So, over the weekend/Monday I ask the matter supervisor what KYC has been done and what the background is? These are the questions I should have asked on Tuesday. (I am sure the matter supervisor is not complicit since the fees on this are so low. )

I've absolutely no idea what you are on about now. Fake litigation?
The facts are you have a suspicion, and you are duty-bound to report it.
If the place you work at has such lax KYC/CDD procedures, it's your MLRO who has their arse on the line as SMF17, not you.

Have you had any AML training? If you have, you already know the answer to this question.

I don’t know the answer, that’s why I asked. I would have thought making reasonable enquiry would be pretty basic. Otherwise, we’d all be at MLRO for everything all the time.

As it’s after the transaction, asking questions now is more likely to alert people of your suspicions. If it has got this far, it’s possible there is inside help especially if standard KYC checks weren’t done. Hence just report it to your MRLO.