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Solicitors warned over real estate fraud in light of £4.6 million property court case

Landmark Information Group, UK's leading provider of digital mapping and land data intelligence, said solicitors need to protect themselves against the crimminal consequences of breaching the Money Laundering Regulations.

They warned that handling funds obtained as a result of mortgage fraud or other false paperwork could have serious consequences.

The warning comes after seven men appeared at the High Court in Edinburgh to deny a multimillion pound fraud scheme involving false paperwork in property deals dating back to 1998.

The fraud scheme is said to be linked to the offices of solicitors' firms, development and investment companies, a mortgage advisor and a chartered surveyor.

It is alleged that they obtained money, mortgages and property by completing mortgage application forms giving false purchase prices and backing up the pretence with false valuation reports.

The Money Laundering Regulations, which came into force since December 2007, require solicitors firms to take a risk based approach to compliance. 'Firms that fail to ensure that their risk assessment and risk management procedures properly address the potential risks that they face are more at risk from criminals seeking to exploit their procedures in order to launder criminal funds,' a spokesman for the Landmark Information Group said.

'Mortgage fraud is a significant issue for solicitors and has clear implications for anti money laundering compliance. It is important that professionals recognise the need for enhanced due diligence to be carried out in high risk situations, such as where the client does not meet the solicitor, as is the case in many conveyancing transactions,' said James Sherwood-Rogers, Managing Director of Landmark Legal & Financial.

The company a comprehensive customer due diligence verification tool that analyses a range of best of breed data sources to assist in compliance with AML legislation. After registering, at no cost, with Landmark AML, advisors can undertake checks on the electronic search system, which provides a full audit trail and carries out both positive and negative checks on the background of clients.