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Sunday, February 21, 2021 - £550K fine for firm’s anti-money-laundering breach
LGL Trustees
Source -
Where - Jersey
Cost - 600,000 GBP
Business line - Agency Services
Copyright © Jersey Evening Post ( 2021

A trust company that broke anti-money-laundering laws when dealing with a client who was investing millions of dollars of Angolan public money has been fined £550,000.

LGL Trustees pleaded guilty to two related offences under Article 37(4) of the Proceeds of Crime (Jersey) Law in December and must also make an additional £50,000 contribution towards the costs incurred by the prosecution.

Earlier this week, during an initial sentencing hearing, Solicitor General Matthew Jowitt said the company had classed the business relationship as being ‘very high risk’ and had been told by its money-laundering reporting officer in 2011 to cease its relationship with the client, Quantum Global.

However, the relationship continued for six years and LGL also failed to disclose to the JFSC that QG’s owner, Jean-Claude Bastos de Morais, had, in July 2011, been convicted of ‘repeated qualified criminal mismanagement’ by a Swiss court.

LGL was also found not to have recognised the risk that a structure it set up might be used to embezzle funds from the National Bank of Angola, as well as not properly identifying and verifying the controllers of the Angolan bank.

There was no suggestion that any of the money provided or the investments it was placed in were suspicious.

A statement from the Law Officers’ Department said: ‘LGL failed to identify the real risks of money laundering that were apparent.

‘In doing so, LGL placed themselves at risk of being involved in the diversion of tens of millions of dollars of public funds of one of the poorest countries in the world, to its rulers, their relatives and associates.’

The fine and costs were imposed by the Royal Court yesterday. The company has been given three months to pay.

Speaking after the sentence had been delivered, Solicitor General Matthew Jowitt said: ‘Proper compliance by financial service providers with the Money Laundering Order is a key defence against abuse of the Island’s finance industry by criminals, and an important aspect of Jersey’s international commitment to combatting money laundering.

‘The decision to prosecute LGL for serious compliance failures and seek a significant fine reflects the gravity with which such breaches of the law are viewed.’

Attorney General Mark Temple QC added: ‘It demonstrates our combined commitment to protect the Island from financial crime.’

LGL pleaded guilty at its first court appearance in December. Its chief executive John Pirouet pointed out that the offence dated back ten years and said: ‘While the group had policies and procedures in place, LGL accepted that these were insufficient when applied to this specific client.

‘There is no suggestion that either LGL or this client were involved in money laundering, or that any party suffered financial losses as a result.’

He added: ‘Since the events of ten years ago, LGL has a new senior management team in place, with enhanced controls across the business.’

Commissioner Julian Clyde-Smith was presiding. Jurats Jane Ronge and David Hughes were sitting.