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Case Studies
Bribery for assistance in money laundering
An affluent client asked a bank manager to provide a bank account for him to transfer huge sums of money around without revealing his identity, and offered to pay the bank manager a percentage of the funds transferred as commission. The bank manager requested an SME owner who had a trading company which was largely inactive to allow him to perform such transactions through the company's bank account at a fee. At first, the SME owner checked before signing any bank documents for fund transfers, but over time, he slackened and even gave the bank manager the company chop. The scam was exposed when the bank noticed suspicious transactions in the SME owner's accounts: large sums were frequently deposited and then transferred to various accounts shortly, and the sums did not commensurate with the company's business turnover volume.
Case Analysis
The bank manager, an employee (agent) of the bank (the principal) and without the permission of the bank, accepted advantage from the client as a reward for helping the latter to perform suspicious transactions through the bank (an act in relation to bank’s business). The bank manager might contravene Section 9(1) of the Prevention of Bribery Ordinance (POBO) for accepting bribes, while the client might contravene Section 9(2) of the same Ordinance for offering bribes.
The bank manager might breach the Organized and Serious Crimes Ordinance or the Drug Trafficking (Recovery of Proceeds) Ordinance as well as the Anti-Money Laundering and Counter-Terrorist Financing Ordinance if he, knowing or having reasonable grounds to believe that any property which, in whole or in part, directly or indirectly represents any person’s proceeds of drug trafficking or indictable offence, deals with that property.
Money laundering is a serious crime. Banks should make all staff members aware that the bank must comply with the laws and would constantly monitor fund transfers and audit the related control/processes, so as to provide a deterrent.