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Why the Pre-Charge Stage Is Critical in Money Laundering Cases
Money laundering allegations are often technical and can arise from routine business activity, family transfers, or even the innocent receipt of funds. The prosecution must prove both that the funds in question are the proceeds of crime and that the defendant knew or suspected their criminal origin. This dual burden makes the evidential threshold high—but it also means that a well-prepared pre-charge response can be decisive.
Many money laundering investigations begin with a Suspicious Activity Report (SAR) filed by a bank or financial institution. The report triggers police enquiries, but a SAR alone is not evidence of criminality. It simply means a compliance officer noticed something unusual. If you can provide a clear, documented explanation for the movement of funds, you can undermine the basis for suspicion before the CPS ever considers charging. The pre-charge stage is your best opportunity to shape the narrative, correct misunderstandings, and present evidence that may not otherwise reach the decision-maker.
Requesting Disclosure
While full disclosure is not required at the pre-charge stage, you can and should make targeted requests for key material. Understanding what the police are relying on is essential for preparing effective representations. Consider requesting:
Bank statements and transaction histories that form the basis of the allegation
Source of funds documentation held by the investigating officer
Suspicious Activity Reports (SARs) or summaries of the basis for suspicion
Witness statements from complainants, bank officials, or third parties
Any forensic accounting or financial analysis prepared by the police
Even a partial response can reveal the scope and direction of the investigation, allowing you to focus your representations on the key issues. If the police decline to disclose, record the request—it may support fairness arguments later.
Written Representations: Building Your Case
The most effective pre-charge intervention in a money laundering case is a detailed set of written representations. These should be sent to the officer in charge and, if appropriate, to the CPS reviewing lawyer. Strong representations will:
Explain the legitimate source of funds: Whether the money came from inheritance, business income, savings, family support, or a legitimate investment, provide documentary proof. Bank statements, contracts, tax returns, and correspondence can all support your explanation.
Address the predicate offence: Money laundering requires a predicate offence—the criminal activity that generated the funds. If the prosecution cannot identify or prove the underlying crime, the money laundering charge cannot stand. If no predicate offence has been established, highlight this gap in your representations.
Challenge the allegation of knowledge or suspicion: The mens rea (mental element) requires that you knew or suspected the funds were criminal proceeds. If you acted in good faith, relied on professional advice, or had no reason to suspect criminal origin, set this out clearly with supporting evidence.
Highlight due diligence and compliance: If you or your business carried out due diligence checks, followed anti-money laundering procedures, or obtained legal or accounting advice, present this. It demonstrates good faith and undermines any suggestion of wilful blindness.
Point out procedural errors: If the investigation failed to pursue reasonable lines of enquiry, improperly handled evidence, or did not comply with the Criminal Procedure and Investigations Act 1996 and the 2015 Code of Practice, reference these failings. The officer in charge is required to retain and disclose all relevant material, and failure to do so can be grounds for challenge.
Common Grounds for Dismissal
Money laundering cases can be vulnerable to challenge on several fronts. The most effective grounds for seeking no further action include:
No evidence linking funds to criminal activity: The prosecution must prove the predicate offence—the crime that generated the money. If this is unclear, unsupported, or speculative, the money laundering charge cannot succeed.
Legitimate explanation for the movement of funds: Inheritance, business income, family support, property transactions, and savings are all common and lawful reasons for large or unusual transfers. If you can document the source and purpose, the suspicion dissolves.
No knowledge or suspicion of criminal origin: If you had no reason to believe the funds were criminal, and acted openly and in good faith, the mental element of the offence is not made out.
Procedural errors: Failure to follow statutory procedures, improper handling of evidence, or failure to pursue reasonable lines of enquiry can undermine the prosecution case.
Important Evidence to Gather
Start assembling your evidence as early as possible. The more comprehensive and organised your material, the stronger your representations will be:
Bank statements, contracts, invoices, and receipts showing the legitimate source and purpose of funds
Evidence of due diligence checks, compliance procedures, or professional advice (from solicitors, accountants, or compliance officers)
Witness statements from parties involved in the transactions, including family members, business partners, or employers
Correspondence with banks or financial institutions confirming the nature of the transactions
Tax returns, company accounts, or other official records that corroborate your explanation
Nuanced Considerations
Money laundering cases often hinge on the interpretation of "suspicion." The legal threshold is low—suspicion need not be based on concrete evidence, only on a possibility that is more than fanciful. However, this works both ways. If you can show that you acted in good faith, followed professional advice, or had no reason to suspect criminal origin, this can be highly persuasive at the pre-charge stage. The CPS reviewing lawyer must weigh your explanation against the evidence of suspicion, and if your account is credible and supported by documents, the balance often tips in your favour.
It is also important to remember that the prosecution must prove the funds are the proceeds of crime. If the predicate offence is unclear, unsupported, or speculative, this is a strong ground for dismissal. Many money laundering investigations are triggered by unusual patterns in banking data, but unusual does not mean criminal. A clear, documented explanation—supported by witness statements and professional records—can dismantle an assumption-based case.
Finally, if the investigation has not pursued reasonable lines of enquiry—for example, failed to interview key witnesses, ignored exculpatory evidence, or did not obtain relevant financial records—reference this in your representations. The officer in charge is required to retain and disclose all relevant material, and the CPS Disclosure Manual sets out the obligations clearly. Gaps in the investigation weaken the evidential test and can be grounds for no further action.
Precedent and Practice
The evidential test for money laundering is strict. The CPS must show both the criminal origin of funds and the defendant's knowledge or suspicion. Early, detailed representations can persuade the CPS that the evidential test is not met, especially if you can provide a legitimate explanation and supporting evidence. The public interest test must also be satisfied, and in cases where the evidence is weak or the defendant has acted in good faith, prosecution may not be justified.
If you are under investigation for money laundering, do not wait for formal charges. Prepare a comprehensive timeline of transactions, gather all relevant documents, and identify witnesses who can support your explanation. Challenge any assumptions made by investigators, request further lines of enquiry, and highlight any procedural errors or gaps in the evidence. If you have professional advice or compliance documentation, include this in your representations. Uploading your documents and correspondence to Caira can help you organise your material, spot inconsistencies, and draft persuasive representations.
How People Use Caira in Money Laundering Investigations
People facing money laundering investigations use Caira to take practical steps towards resolving their situation. Common goals include:
Working towards having a case dropped before charges: Uploading bank records, transaction histories, and source-of-funds documentation to identify gaps in the prosecution's case and prepare draft representations aimed at no further action.
Building a defence strategy: Analysing the evidence relied on by investigators, identifying flawed assumptions about the origin of funds, and organising compliance records, professional advice, and witness statements to present a clear, legitimate explanation.
Preparing representations to the CPS: Drafting structured submissions that challenge the predicate offence, demonstrate good faith, and highlight procedural errors—with the aim of persuading the CPS not to proceed.
Requesting varied restraint or bail conditions: Reviewing frozen account orders, restraint notices, or bail conditions and drafting written requests where restrictions may be disproportionate or causing undue hardship.
Seeking early resolution: Identifying opportunities to intervene with investigators to close matters early or prevent escalation to formal charges.
Disclaimer: This article is general information only and does not constitute legal, financial, or tax advice.
