201512 CM December

LEGAL MATTERS
NO DIRTY MONEY
FOR THE BANK
Peter Walker explains that banks have to question complicated financial arrangements as
a result of a recent case of money laundering originating in Gibraltar.
OVER 90 years ago Chicago gangster
Al Capone reputedly used his
criminal wealth to set up laundries
to turn his metaphorically dirty
money into outwardly respectable business
assets, but the term ‘money laundering’ is
of modern times. The methods of money
launderers are now different, and we want
to trust our banks to be alert to defeat
such criminals. A case involving a bank
and allegations of money laundering was
recently referred by the Gibraltar Court of
Appeal to the Privy Council.
In Papadimitriou v Credit Agricole Corpn
and Investment Bank (2015) 1 WLR 4265
the judges were considering the facts and
law arising from the sale of a collection
of art deco furniture designed in Paris by
Eileen Gray in the 1920s and 1930s. It was
a very expensive collection worth some
US$15 million, and the sale of just 14
items of furniture and with various other
transactions, according to Lord Clarke of
Stone-Cum-Ebony, JSC, ‘were part of a
fraudulent scheme devised by’ the seller,
Robin Symes, an antiques’ dealer, who,
despite such riches, had subsequently
become bankrupt. The proceeds of sale
as part of the scheme went on a long
journey. Some US$4 million ended up with
one Panamanian company and another
Panamanian company was the recipient of
US$10.4 million.
The complications and the money’s
journey did not end there, and eventually a
bank’s Gibraltar branch received US$10.3
million for the account of a company
formed in the British Virgin Isles at the
request of the seller. A London branch
of the bank gave another of the seller’s
companies a facility of US$10.3m on the
basis of the balance in Gibraltar, of which
balance some US$9.8 million was used to
pay off the facility.
The family claiming to own the furniture
following the unexpected death of one
of its members then discovered what
had happened, and wanted to recover
the money. The judges in various courts
had to decide whether the family were
the owners, and, if so, whether the bank
had to pay the money to them. There had
been an earlier Privy Council case, Calyon
v Michaelides (Gibraltar) (2009) UKPC 34,
where the judges rejected the judgment
of a Greek court as to the ownership of
the furniture. There was also what Lord
16 December 2015 www.cicm.com
The recognised standard in credit management