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?

I think it might even be the case that if you should have had suspicions and don't report it you get in trouble

I get that it's shit OP. But better to be the one who raises their concerns at this slightly late stage than the one who lives every day from now on wondering a deal based on laundered money is going to come to light. You're not going to go to prison for raising your concerns and if this deal is bad, then you're the good guy. You're doing the right thing

@CaponeOnTax can you say you want to review the process because there has been nothing confirming those involved prior had done the KYC checks and yet you now realise playing things back that it doesn’t sit right with you?

The second paragraph of this is NOT OP’s responsibility. As a MLRO why would you suggest OP does this? The MLRO should be sorting this out, not OP.

By the way, a white collar crime is still a crime. Prison uniforms all have the same colour collar!

Absolutely speak up now. You won’t be in ‘trouble’. You know you have an obligation now that you have a suspicion. Better do it now than live with the fear forever more. Xx

OP I think you need to take a breath. I work in a regulated industry with KYC obligations too. I haven’t seen you post (unless I missed it, I’m which case apologies) that you’ve checked the file and you KNOW KYC wasn’t done correctly. It sounds like you were parachuted into a transaction and weren’t given the background, got on with the work, and now you’ve had pause you’ve thought about AML. I don’t think it’s unreasonable in your situation to assume KYC has been done properly, and I expect the likelihood is that it has. However (and that’s a big however) you do have a responsibility to always be aware of KYC, recognise red flags, and discuss them with the supervisor on the file and escalate to MRLO (my understanding is a junior discussing with the file superior doesn’t count as tipping off) where appropriate.

As it has occurred to you now, you MUST follow your KYC policy and approach the MRLO to appraise them of the transaction. You assume all is fine, have no reason to believe it’s not, but wanted to flag as you’ve now recognised the red flags but you haven’t checked the file to see whether LYC has been done. I expect they will also assume KYC has been done properly (again, this is the reasonable approach) but will (rightly) check the file nonetheless.

With regards to your input, I don’t think the transaction having already happened matters a great deal.

Try not to assume what will happen. Approach these things one step at a time: fulfil your responsibilities, while giving your colleagues the benefit of the doubt until there is actual proof that something has gone awry. As you say, the red flags are obvious so it is reasonable to assume it was covered off at the start of the transaction (but best to check!).

The lessons here are:

• for you to recognise red flags more readily (it’s v easy to focus on the work at hand. Take five minutes before working on a transaction to take a step back and analyse what it is, what’s involved, and how what you’re doing fits in)
• for your senior (whoever got you working on it) to properly appraise juniors of the transaction which would include confirming KYC responsibilities have been taken care of.

Everyone makes mistakes, it’s how they are dealt with that is key. Presumably your company has insurance. Chalk it up to experience, learn your lessons (you never make the same mistake twice with this stuff 😂), and crack on. Don’t waste a weekend stressing about something you can’t change, just do what you need to do as soon as possible on Monday (or send the MRLO an email now!).

Can I air it with the senior colleague and ask them why the KYC was not done and what the background is to the transaction?

I wouldn't - not if you believe they're implicated in a fraud/money laundering

Much better to report it as appropriate and enable the proper process to happen - and if you weren't involved in whatever was originally done they'd have a hard job sacking you over it

Talk to your MLRO, now.

They're the one going to jail if something gets missed so they should be ok with it.

Id be inclined to move quickly in order to cover your own arse. If senior person starts blaming you it will be harder to come back from.

I'm not in anything like as responsible a job, but I understand feeling that you've been dragged into facilitating something that isn't legal and are now worried about whether it'll backfire on you if you report it after the fact.

Every time I've been in a position where I've had to start a conversation with a 'This happened when (insert particular shitshow)...it's been ticking away in the back of my head for the last couple of days and it doesn't feel right - I'm acutely aware that this could have repercussions for me, but I can't ignore it and hope it'll go away', I have never had any comeback, possibly because my reporting it could have got me into a lot of trouble but I've still done it. It's the thing about professional integrity.

You've actually got a huge legal framework and organisational structure that makes this easier for you in my opinion. Use it.

After all, not using that structure and protections means that not only could it result in horrendous consequences for you, it's going to be in the back of your mind forever, always nagging away at you 'what if...?'. Speak up - by yourself - and it'll be far better for you professionally, morally and psychologically than being complicit in a fuck up at best, crime at worst.

There’s a lot of catastrophising on this thread. I’m senior, big 4, have made MLRs before.

Non-interest bearing USD loans are not unusual. Start from the POV that it’s unlikely to be criminal activity. Because it is. And it’s less stressful that way.

The person who did the take on should have done AML checks. They didn’t so they’re in breach of policy. That’s on them. It’s a serious breach and you can’t help them by throwing yourself under the bus too. You’re entitled to rely on colleagues doing their jobs properly, you can’t second guess everything.

Unless you think a team member is facilitating ML it’s ok to discuss this within the team to agree facts and way forward. I’d include a senior member to establish that you’re raising a concern, but that it’s not down to anything you did.

If you suspect ML (or ought to suspect based on the facts known to you) then you need to make a report to the MLRO. Ours/ their deputies are really helpful and happy to advise on whether they think a report is required (although always making it clear that it’s a personal obligation). It’s OK to make a joint report (and we encourage it as they’re often better quality/more complete) but if you disagree with anything in the report then you have to make your own. As it’s important that it’s accurate and complete, it’s OK to take a few days to do this. Nothing is going to change in a few days. A couple of weeks is too long however.

Remember that you’ve done absolutely nothing wrong. I’ve been in a similar position. I relied on a senior colleague to have already covered some procedures correctly when I was brought into something mid-transaction. A few weeks in I discovered that they hadn’t and rectified it. They got an adverse finding, I didn’t.

This thread has been utterly maddening.

I work in share dealing and all this is drummed into us, we have regular training and advised to speak up if any red flags appear

Glad I'm not the MLRO in your gaff

Raise the SAR, the MLRO or nominated officers will make their own enquiries. You shouldn't do any further investigation unless you are asked for further information.

And please retake your AML training

Appreciate you feel conflicted about this work situation but what I still can't fathom is the bright idea to ask for broadly unqualified opinions from complete strangers about serious regulatory matters on a public forum as (from what I can gather) your first step in tackling a possible issue? . Especially when you havent even established the fundamentals and know you need to check and clarify. Bewildering lack of judgement.

I feel for you OP. It must feel horrible but when you think of the harm money laundering does you know reporting is the right thing.

I sometimes work with victims of human trafficking, especially those forced into prostitution. What those people go through is horrific beyond imagination. Your report could save someone from that nightmare, I'm so glad you are going to make the report.

Does your company have a procedure which sets out when these checks should be made? I don't work in finance but it seems like they should bearing in mind the importance. If not perhaps that will minimise any shitstorm that might come your way.

@WutheringTights a lot of financial institutions would tell you expressly not to try to investigate and not to discuss with colleagues where there is a possibility they may have failed to follow procedures. Even if it is just a cock up, if the colleague goes back and clumsily tries to rectify the KYC they may inadvertently tip off the customer.

A lot of people who work in banking will refer to the "smell test" i.e. does the transaction feel right - even if you can't put your finger on what is wrong.

MLRO want these things reported not just as suspicion but also as intelligence of things going on in the market.

(A similar approach is taken with STOR, i.e. that they provide useful market intel to the regulator even if NFA.)

For those wondering about the MLRO - it's the Money Laundering Reporting Officer who (amongst other things) fulfils the role of the nominated officer for the purposes s330 of the Proceeds of Crime Act 2002 - i.e. once the OP reports their suspicion to the MLRO then the OP has fulfilled their legal obligation and so is no longer at risk of prosecution for non-reporting.

If you both have a reasonable suspicion - and I'd assume your colleague does - you both need to make a report.

For all you know, your colleague already has. Because you're not supposed to talk about it with anyone apart from your MLRO.

I realise you're panicking and looking for an answer that makes everything go away and no boats be rocked, but it's not your job to fix this. It's your job to speak to your MLRO.

Thanks all for the replies. I have checked the work policy which confirms I can confer with another colleague in my team to review possible red flags so I am doing that now. Hopefully we will make a joint report but I will report either way.

And the red flags do match up with some example red flags in the policy. It’s annoying that we didn’t do the correct KYC but that is actually likely to come back clear. What is at issue is exactly ‘Smell Test’ - it just isn’t right.

This will be with the AML contact in the next couple of hours.

Not my area.

I imagine covering my arse by saying " I arrived late to this transaction and only afterwards did I realise that it was not clear if all due checks were done. I have a conflict of interest if I was negligent so I would like someone else (objective) to review the situation now and make sure we all learn from any mistakes and if any rectification steps need to be taken." Basically try to spin it into a learning opportunity if mistakes were made.

Cover-up is worse for a career than fuck up, so yeah, come clean.

Cover-up is worse for a career than fuck up

A mantra that should be drummed into people new to the world of work at every available opportunity.

@WutheringTights i am surprised that it’s acceptable to discuss with the deal team in a big 4. In a regulated business like OP’s it’s definitely not standard practice to encourage that. The training is specific on this very point.
Is that within the audit teams of big 4 or general deal teams in a big 4?

You've done nothing wrong, OP. However, the penny has now dropped, so you HAVE to report it. Don't talk to your colleague, don't do any more investigations yourself, just report to MLRO what you know and they'll take it from there. It might be nothing, it might be something small, it might be domething big - but that's their job to determine.

You have your suspicions, you report it, you've done your job. Do it on Monday and the AML people will deal with it (I used to work in banking many years ago, but this was the correct procedure then and I doubt anything has changed when it is about money laundering)