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Friday, 10 May 2013

Advising the Legal Services Board about Slater and Gordon's Trust Account irregularity

We share an interest in the proper administration of justice.   I thought you might be interested in the role of Legal Services Board in Victoria - this information is from its website.

About the Legal Services Board

The Legal Services Board is an independent statutory authority, responsible for regulation of the legal profession in Victoria. The Board was formed on 12 December 2005 under the Legal Profession Act 2004 (Vic) (“the Act”). Under the Act, the Legal Services Board gained responsibility for regulatory functions previously performed by the Legal Practice Board and Victorian professional associations. The Act disestablished the Legal Practice Board.

The Board aims to:

  • ensure the effective regulation of the legal profession and the maintenance of professional standards
  • address the concerns of clients of law practices and legal practitioners through the regulatory system and provide for the protection of consumers of legal services
  • ensure the adequate management of trust accounts
  • ensure that the Victorian system is at the forefront of regulation of legal practitioners.

Key responsibilities

Some of the Board’s key responsibilities are:

  • Maintenance of the register of legal practitioners and law practices, and the register of disciplinary action
  • Issue, renewal, suspension and cancellation of practising certificates
  • Setting professional indemnity insurance requirements
  • Administration of the funds under the Act
  • Administration and management of legal practitioners’ trust accounts
  • Investigation and determination of claims against the Fidelity Fund
  • Appointment and/or conduct of external intervention of law practices
  • Making and approving legal profession rules
  • Prosecution of breaches of the Act.

Some of these functions are currently delegated to legal practitioners’ professional associations – theLaw Institute of Victoria and the Victorian Bar. Please note the Board does not provide legal or professional advice to legal practitioners or members of the public.

View the Legal Profession Act 2004.

 

Here's part of what the Legal Services Board tells us about legal practice Trust Accounts and their records - on my read this includes an obligation on all lawyers to act when they're aware of Trust Account irregularities

if an Australian legal practitioner believes on reasonable grounds that there is an irregularity in connection with the receipt, recording or disbursement of any trust money received by a law practice of which the practitioner is not a legal practitioner associate, the practitioner must as soon as practicable after forming the belief give written notice of it to the Board and a corresponding authority (if a corresponding authority is responsible for the regulation of the account concerned).

What does Slater and Gordon's Trust Account record show about the Kerr Street purchase?   This letter from James Higgins is dated 8 April, 2013 - this is a current record in the Slater and Gordon accounts.  If it is left unchallenged it provides cover, a reason not to investigate any further.    

Subject: Your recent request.Date: Mon, 8 Apr 2013 02:52:43 +0000

Dear Mr Blewitt.
I write in response to the request for Trust Account receipts associated with your conveyancing file for your purchase of a property in 1993. I am assuming for this purpose that you are no longer represented by Galbally Rolfe and I can communicate directly with you in this regard. For the avoidance of doubt, and as we have previously advised you should continue to seek independent legal advice concerning these matters.
Your request was to our Managing Director Mr Andrew Grech. Mr Grech is on leave and has asked me to respond on his behalf.
Under the rules and laws applying to Trust Account receipts they must be kept for 7 years. Nevertheless we requested our Matter Accounts group search for receipts from 1993 related to this matter. Unfortunately it appears the firm largely no longer holds trust account receipts for the early 1990's given the expiration of time. We do enclose a copy of our Trust Account ledgers which we have previously provided to your lawyers. You will note that the ledger reflects that the transactions you have inquired about involved a Direct Deposit in your name. You are aware you deposited those funds at a Commonwealth Bank Branch in Western Australia. As previously advised to your lawyers there is no reference in your conveyance or mortgage file concerning where you sourced those funds. The other transaction you inquire about concerned a personal cheque in the name of R E & J A Blewitt.
You will note that these ledgers are in fact copies of the actual ledger that was printed off for the file on 13 July 1994 prior to any controversy concerning this conveyance. I am informed that this was likely to be for the purposes of archiving the file.
Yours faithfully
James Higgins

 

This entry on our blog shows the records provided by the Commonwealth Bank of Australia to Ian Cambridge, setting out that the sham entity AWU Workplace Reform Association was the source of the funds and the drawer of the cheque used in the purchase of Kerr Street.

Unless it has evidence to show that the Commonwealth Bank and Ian Cambridge are wrong, Slater and Gordon itself is under some obligation to correct its Trust Account irregularity and to report the irregularity to the Board.   That should be accompanied by Slater and Gordon's plan to investigate how the irregularity happened and what further investigations should now take place.

But if Slater and Gordon doesn't take the initiative itself,  you can rest assured that by lunchtime today other persons will.

This matters.  Here is an extract from the AUSTRAC website about money laundering.

In practical terms, money laundering is the process whereby criminals attempt to hide and disguise the true origin and ownership of the proceeds of their criminal activities, thereby avoiding prosecution, conviction and confiscation of the criminal funds. The various stages to achieve this are termed placement, layering and integration.

Placement is the first stage of money laundering in which illegal funds or assets are first brought into the financial system. When illegal funds are placed in the financial system, they become more liquid. For example, if cash is converted into a bank deposit, it becomes easier to transfer and manipulate. Money launderers 'place' the illegal funds using a variety of techniques, which include the deposit of cash into bank accounts and use of cash to purchase assets.

In the second stage of money laundering - layering - the 'placed' funds are distanced from their illegal origin by moving, dispersing and disguising them. Money launderers use many different techniques to layer the funds, including using multiple banks and accounts, professionals who act as intermediaries and corporations and trusts. The funds may be shuttled through a web of many accounts, companies and countries in order to disguise their origins.

The final stage of money laundering is integration. Once the funds are layered and distanced from their origins, they are re-introduced to the economy for criminals to use and control as apparently legitimate funds. At this stage the illegal money has achieved the guise of legitimacy and the laundered funds are made available for investment in legitimate or illegitimate businesses, or spent to promote the criminal's lifestyle.

 

 



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Where it Started

Gillard & the AWU scandal

Interview with Bob Kernohan