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Risk Assessment Case Studies: Anti-Money Laundering and Terrorist Financing

Introduction 

Practising law or providing legal services can expose you and your firm to money laundering and terrorist financing (MLTF). To effectively combat MLTF and other illegal activities, you must recognize and understand MLTF risks, be alert to red flag indicators, and discern legitimate transactions from structures intended to conceal or promote criminal activity. Licensees who lack such awareness and understanding are more susceptible to being used by clients in MLTF activities.  

As a licensee, you have a professional obligation to comply with the Law Society’s client identification and verification requirements, which act as a screening measure for potential MLTF initiatives.   

To assist you in meeting your obligations, the Law Society has developed a set of Risk Assessment Case Studies, organized by the contexts in which criminals frequently target legal professionals for illegal activity:  

  • Misuse of trust accounts 
  • Purchase and sales of real estate property and other transactions 
  • Creation and management of trusts and companies 
  • Managing client affairs and making introductions 
  • Disputes and litigation 

The Risk Assessment Case Studies are intended to help you spot red flags and identify what practical steps must and should be taken when faced with a possible MLTF situation.  

In your practice, consider using the Law Society’s Worksheet: Red Flags of Fraud, Money Laundering, Terrorist Financing, and Other Illegal Activities to identify red flags in a client matter and document your due diligence.  

Risk Assessment Case Studies 

Terms or Concepts Explained