$20K seized, without warning from law firm’s trust account in Operation Ironside investigations

SA lawyers have been put on alert by an unusual move by SA Police that left a firm representing an alleged Ironside offender fearing it had been robbed.

Funds totalling $20,000 have been seized from the trust account of an Adelaide law firm, representing an alleged Operation Ironside offender, in an unusual legal manoeuvre.

In a move that has put the state’s lawyers on alert, the firm was not notified of a court order served directly on the bank that manages its trust account.

When the firm discovered its trust fund was out of balance – an offence under state law leaving it open to fraud prosecution – it believed it had fallen victim to cybercrime.

Three days after the firm reported, to SA Police, what it suspected was theft, it was told the money had been confiscated – but still has yet to be shown the order authorising the seizure.

On Thursday, SA Law Society criminal law committee co-chairman Craig Caldicott said he believed it was the first time a seizure had been conducted in such a manner.

He said that raised serious legal questions and created potential issues for taxpayers.

Detectives from Operation Ironside prepare to make an arrest. Picture: AFP.

“If police are going to seize money paid into lawyers’ trust accounts by defendants seeking representation, who is then going to represent these defendants?” he said.

“If they plead not guilty, they will need to seek legal aid funding and these long, complicated, expensive trials will require an enormous amount of funding.”

However, an SA Police spokesman insisted the seizure was “routine” and in keeping with bids to restrain $27m worth of assets belonging to people charged during Operation Ironside.

“The SA Police Confiscations Section routinely applies to magistrates seeking warrants to seize tainted funds pursuant to the Criminal Assets Confiscation Act,” he said.

“SA Police are committed to the objectives of the CACA legislation to deter serious and organised crime offending, regardless of where tainted funds are held.”

A law firm’s trust account allows it to quote an estimate for its services, have a defendant pay that amount in advance and draw on it solely for that client’s benefit.

The account is regularly audited and must be in balance at all times – if it is not, firms can be accused of malfeasance or misuse of a client’s money.

That exposes firms to possible disciplinary proceedings from legal watchdogs or even being charged with fraud or dishonesty offences.

On Tuesday last week, the firm representing one of the Operation Ironside accused performed a reconciliation of its trust account, discovering it was out of balance by $20,000.

It reported the matter to its bank, the Law Society and police, learning three days later that the money was seized as a result of investigations arising from the operation. It subsequently emerged the firm’s bank had been served a “banker’s order”, signed by a magistrate or judge, authorising the withdrawal under the Confiscation of Assets Act.

To date, the firm has not seen a copy of that order and remains unaware which magistrate or judge authorised the transaction.

In the wake of the seizure, the Law Society sent letters to its members about the incident. On Thursday, Mr Caldicott said the “concerning” seizure only added to the pressures placed upon the legal system by Operation Ironside.

More than $27m worth of cars, homes, watches and cash allegedly linked to Operation Ironside, including this Lambourghini, is the subject of restraining order applications. Picture: SA Police.

He said many of the cases had the potential to consume as much time, and as many taxpayer resources, as next year’s trial over the murder of innocent man Jason De Ieso.

“Under law, the state government has an obligation to fund complicated, expensive matters, which all of these will be,” he said.

“If all of these matters proceed, they will be in the court system for the next three years.

“There are not sufficient court resources available to deal with so many long, complicated matters one after another.” Attorney-General Vic-kie Chapman’s spokeswoman said she could not comment on cases before the courts.

Originally published as $20K seized, without warning from law firm’s trust account in Operation Ironside investigations