Financial crime tip-offs decrease

The number of tip-offs by accountants to the police detailing suspicious movements of money has fallen, according to figures due out next month.

The revelation added to the growing concern in government circles and the police that accountants are shielding clients involved in illegal money-laundering schemes.

Accountants are obliged to file reports to the National Criminal Intelligence Service if they believe clients have been party to laundering the proceeds of crime, including financial crimes such as tax evasion.

NCIS reported 16,125 tip-offs were received in 1996, an increase from 13,710 in 1995. Almost half of the disclosures, 49%, came from the banks.

Another 39% were supplied by building societies, insurers and bureaux de change. Accountants were the source of 80 tip-offs in 1996, an increase from about 55 the previous year.

But NCIS will reveal in its annual report, due out next month, that the number of accountants filing reports last year declined, according to sources close to the agency. The revelation could bring renewed calls for stricter controls on accountants and demands that they accept enhanced obligations to report fraud as well as money laundering.

Earlier this year, the Financial Action Task Force, part of the Organisation for Economic Co-operation and Development, castigated accountants and lawyers for their failure to tip off the police. After a year-long review of the professions, the FATF said it wanted them to take part in better training to spot fraud.

The Treasury is known to be concerned at what it sees as a failure of duty by accountants, whom it believes shields many clients from investigation by the police.

The City of London Police voiced its concern last year that accountants are not obliged to report general fraud to the police. It urged accountants to accept proposals for reporting fraud during discussions that led to the formation of the Fraud Advisory Panel, sponsored by the English ICA, at the beginning of the year.

Related reading