LAWYERS TARGETED FOR MONEY LAUNDERING

Lawyers are making themselves targets for unrelenting strong-arming
and bribery from powerful mobsters and terrorists by insisting they
alone be exempt from strict anti-money-laundering regulations, a
confidential RCMP report says.

With bankers, accountants and other money managers now covered by
rules requiring the reporting of suspicious financial transactions, it
leaves lawyers bearing the brunt of increasingly desperate criminals
with vast sums of dirty drug cash needing conversion into something
that can be spent without arousing suspicion, the report says.

That makes lawyers top targets for corruption, it says.

The internal discussion paper on the role of lawyers in handling the
proceeds of crime, obtained by the National Post, expresses dismay at
the legal profession's efforts to exclude itself from the reporting
regulations.

The paper says lawyers were originally included in the government's
law to protect them.

"It is ironic that one of the objectives of the [anti-money-laundering]
act .. was to place the members of the legal profession in the
position where they would not be approached in their professional
capacity to launder money," the report says.

The report estimates $17-billion in gang profits were laundered in
Canada in 2002.

Asking lawyers to report on clients remains a thorny issue.

The government's 2001 Proceeds of Crime (Money Laundering) and
Terrorist Financing Act initially included lawyers among those who had
to report suspicious client transactions. That caused outrage in the
legal community and was promptly challenged in court by lawyers'
groups in most provinces. After the law groups won court injunctions
in Alberta, Saskatchewan, Nova Scotia and Ontario, the government
agreed to exempt lawyers from making reports.

Lawyers' groups are still negotiating with the government on an
alternative solution.

Law societies are enacting internal codes of conduct limiting the
amount of cash lawyers can handle for their clients to a total of
$7,500 -- under most circumstances.

B.C. and Ontario have the rules already in place and all the other
provincial societies will similarly comply by July 1, said George
Hunter, chairman of the Federation of Law Societies' Task Force on
Money Laundering.

"I'm prepared to concede that lawyers would be a target," said Mr.
Hunter after being read portions of the RCMP report. That is why the
societies are enacting internal regulations to reduce cash
transactions by the legal community without compromising
solicitor-client privilege, he said.

The government, however, seems unmoved by the efforts.

"The government remains committed to having lawyers within its
anti-money-laundering and anti-terrorist-financing regime. This is an
important step in Canada's efforts to meet its [international]
commitments," said a Department of Finance official.

The RCMP discussion paper, titled Lawyers and Complicity in Criminal
Conduct -- Exploitation of Solicitor-Client Privilege, was drafted at
the request of the RCMP's Officer-in-Charge of Criminal Operations for
Ontario.

Last week, Simon Rosenfeld, a Toronto lawyer, was sentenced to four
years in prison for laundering what he was told was $500,000 from the
sale of cocaine. His lawyer is appealing.

Other lawyers are currently before the courts or under investigation
by police.