A few months ago wrote about a San Diego attorney, Richard Medina, that was using the Law Firm’s Trust Account to help hide the source of $12 Million in violation of the Bank Secrecy Act. By using the firm’s trust account he was able to evade the bank reporting laws that are meant to report on large money transactions.
Medina and his co-conspirators, Omar Trevino Caro Del Castillo and Francisco Cuevas, obtained commissions for their services, extracting a fee from the millions of dollars transmitted abroad. Caro Del Castillo and Cuevas have already pleaded guilty and are awaiting sentencing.
Medina, in his role in the conspiracy, illegally utilized his law firm’s “Interest on Lawyers’ Trust Accounts” (IOLTA) for receipt, transport, and transmission of cash to international destinations. Civil attorneys routinely receive client funds, known as “Trust money,” to be held in trust for future use – including IOLTA Accounts.
The Wall Street Journal is now detailing on how hundreds of millions of dollars was allegedly siphoned out of 1Malaysia Development Bhd., the Malaysian state fund known as 1MDB, passed through law-firm pooled accounts in the U.S., federal prosecutors said in lawsuits filed in July. Investigators in several countries say billions of dollars are missing from the Malaysian fund.
While the ABA continues to lobby to prevent law firm trust accounts with having to comply with anti-money laundering laws, one wonders how long will IOLTA accounts be exempt from such discloses, given the continued abuse of such accounts.