Cash flow problems, delays in documentation, third-party payment releases, technical issues involving financial transactions and administrative matters within law firms are among the reasons cited in cases involving lawyers accused of criminal breach of trust.
From 2023 to July this year, the Royal Malaysia Police’s Commercial Crime Investigation Department (CCID) recorded 181 cases involving lawyers, with losses exceeding RM192 million.
However, police will assess each explanation based on the facts and evidence gathered during investigations. Where there are indications that client funds were misused or that dishonest intentions were involved, investigations will be conducted under the relevant laws.
Investigations have found that money belonging to clients was allegedly used for personal purposes, as working capital or to purchase assets for the lawyers’ own benefit.
CCID director Datuk Rusdi Mohd Isa said most cases involved property transactions, including house and land purchases as well as transfers of ownership, where clients’ trust funds were kept in lawyers’ client accounts.
Other cases involved estate administration, commercial transactions, bank loan matters, proceeds from property sales and settlement funds that should have been handed over to clients or other entitled parties.
“Common modus operandi identified include failing to hand over clients’ trust money within the stipulated period, using clients’ funds for other purposes without authorisation and transferring money from client accounts to unrelated accounts.
“So far, most cases recorded involve individuals abusing the position and trust placed in them.
“CCID does not rule out the involvement of other parties if investigations uncover elements of collusion or conspiracy to misappropriate clients’ funds,” he said in an exclusive interview with Sinar Harian at the CCID headquarters in Bukit Aman recently.
Rusdi said some cases had also involved alleged criminal intimidation against clients.
However, he said lawyers involved would commonly attempt to avoid meeting their clients, refuse to answer phone calls or issue bounced cheques.
He said various excuses would be given, including claims that funds had yet to be received or that documents were incomplete, followed by repeated promises before the law firm eventually closed down.
“In such cases, clients eventually decide to lodge police reports.
“We also do not rule out the possibility that some individuals may flee overseas after being detected by police.
“Investigations are conducted in the same manner regardless of whether the person involved is a lawyer, and police cooperate with the Malaysian Bar,” he said.
Rusdi said CCID conducts comprehensive investigations into every report received to identify criminal elements and trace the flow of funds involved.
Apart from criminal investigations, cases involving professional misconduct may also be referred to the Malaysian Bar for further action under the relevant professional jurisdiction and procedures.
He said strategic cooperation between enforcement agencies and professional bodies was important to ensure appropriate action could be taken against those involved.
34 Individuals Charged In Court
Rusdi said that between 2023 and July this year, 43 individuals were arrested to assist investigations under Section 409 of the Penal Code for criminal breach of trust.
“Of that number, 34 individuals were charged in court.
“The trend shows that although the number of cases is not particularly high compared with other categories of commercial crime, the financial impact on victims is significant because most cases involve clients’ trust funds connected to property transactions, estates, commercial dealings and settlement funds managed by law firms.
“Therefore, CCID will continue strengthening investigations and working with relevant parties to ensure individuals who abuse their positions and the trust placed in them are brought to justice,” he said.
Rusdi urged members of the public to engage registered lawyers with good professional records when seeking legal services.
Clients should also monitor the progress of their transactions, obtain receipts and relevant documents for every payment made, and keep records of communications and transactions with their lawyers.
“If there is an unreasonable delay or anything suspicious, clients are advised to seek an immediate explanation and lodge a report with the authorities if there are indications of misappropriation or criminal breach of trust,” he said.
Rusdi stressed that CCID takes criminal breach of trust cases involving lawyers seriously as they involve the abuse of trust placed by clients and could undermine public confidence in the legal profession in Malaysia.
