Next Generation AML/CFT screening and monitoring for financial institutions
Anti Money Laundering and Know Your Customer for Law Firms & Legal Professionals
The legal industry is one that never sleeps and it is an important part of every sector of the economy. Because of this, there is a significant amount of money that flows throughout this industry. This also makes the legal industry a target for money laundering
In money laundering, a criminal is going to try to take his or her dirty money and clean it by using the accounts of law firms and legal professionals. This will make his or her money indistinguishable from that of the law firm. It is critical to prevent this from happening.
At Truth Technologies, we are committed to protecting businesses, such as law firms, against illegal financial transactions. We are one of the top companies for anti-money laundering (AML) protection.
What is Money Laundering?
Money laundering is closely tied to the business world; however, this is becoming an issue in the legal industry as well. When someone is trying to carry out money laundering, the goal is to make his or her money look identical to the clean funds of the unsuspecting victim. Then, when the money is withdrawn, it looks clean. Dirty money can be cleaned using the legal industry in multiple ways.
Why Law Firms and the Legal Industry
Money laundering activities take place in the legal world for a handful of reasons, including:
To prevent money laundering from taking place in law firms, there are strict regulations that lawyers need to follow.
Rules and Regulations in the Legal Industry Regarding Money Laundering
All firms and practices in the legal sector need to comply with the established regulations when it comes to financial protection. The regulations have been put in place by FINRA and the United States government. These include anti money laundering (AML) rules, including
Law firms need to make sure they understand these requirements clearly to avoid hefty fines and sanctions. These regulations are meant to protect the firm against financial crimes.
Red Flags for Money Laundering in Law Firms
When it comes to the legal industry, there are a few red flags that might indicate money laundering is taking place. Some of the examples are:
Know Your Customer (KYC) regulations meant to make sure law firms know who they are dealing with. Not only is KYC a key regulatory requirement but it also keeps the firm safe.
What is KYC?
KYC services help law firms know where the money is coming from. The goal of KYC is to verify the source of the funds. Lawyers tend to know how much someone will be able to spend in his or her defense. If the customer appears to be coming up with large sums of money out of thin air, this is a problem. The source of the funds must be verified to prevent the law firm’s business account from getting tangled with dirty money.
With regulations increasing in the legal sector, anti money laundering (AML) requirements are only going to become more important. At Sentinel, we provide high-quality KYC services to protect our clients, including law firms, from money laundering and other fraudulent activities.
Why KYC is Important in the Legal Industry
In the legal industry, KYC is important because large sums of money flow through this industry frequently. Money launderers will attempt to deposit large sums of money into the law firm’s account. Then, if this money is not spent in his or her case, he or she will expect this money back. In this quick transaction, dirty money might have been cleaned using the law firm’s account. This cannot happen.
Some of the information that law firms need to acquire include:
This information must be collected before any money is taken from the client. This will protect the law firm against unknowingly engaging in financial crimes.
Sentinel's KYC Services
At Sentinel, our top priority is to assist our clients, including law firms, in managing their financial risk and liability. Our AML and KYC policies help make this goal happen. We provide KYC as a service to all of our clients to protect them against potential financial criminals. You need to protect your firm against money laundering with robust KYC practices. Reach out to us to find out more about how our exceptional services can protect you from money laundering.
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