Trust officer fined for breaking laws with high-risk clients

Ginette Blondel took on work privately for an overseas client regarded as a politically exposed person, an alleged war criminal and a kleptocrat, who was already under investigation for money laundering, in 2013, after more than a decade working in the trust industry in Guernsey.

After she and her client, linked to the rulers of Syria, were publicly exposed when he was convicted of money laundering, the Guernsey Financial Services Commission launched an investigation.

It concluded that she had breached the fiduciaries law by carrying out regulated activities without a licence, imposing a £210,000 fine and a nine-year prohibition from senior roles in the industry.

Ms Blondel holds an MSc in corporate governance and is an associate of the Chartered Governance Institute. When she left employment in the industry in 2013, she started working for a previous client, not named by the commission, as a personal assistant for their son.

She knew the client from previous professional dealings.

The job branched into assisting with business and administration and financial activities, and as the client’s structures steadily moved out of Guernsey, she took on 11 directorships for them, more than allowed under the law.

She was introduced to a second family office client at the end of 2014 and started working for them informally the following year.

The family involved politically exposed persons and alleged links to corruption.

An investigation revealed she had managed and administered trusts and companies for her clients, which she could not do as an individual, and did not even have a personal fiduciary licence.

Although she had some due diligence information on her clients, there were no anti-money laundering policies, procedures or controls in place, and no formal risk assessment ever carried out.

The commission found that in addition to the various directorships, Ms Blondel had performed other roles and offered advice over a number of structures and transactions.

She used her own bank account to facilitate payments, at one point receiving a deposit of 1m. euros from a client company as advance fees for a proposed Guernsey trust company to be established.

The venture did not proceed but the funds were not returned, and were instead used to make more than 150 payments to various third parties. The GFSC said that there was a ‘very real risk’ that she may have been used to launder the proceeds of crime and had failed to recognise that risk.

The first client was convicted of money laundering and aggravated tax fraud and imprisoned for four years in June 2020. The client relationship had ended three months earlier.

Ms Blondel and Guernsey were named in media articles reporting the conviction. The client is now facing an international arrest warrant in connection with alleged war crimes.

At one point she held multiple directorships for the second client but resigned in 2016 and operated as a consultant for a while.

She later acted as company secretary for non-local companies linked to the client.

The commission said that carrying out regulated activity without a licence was ‘a serious matter’.

‘Ms Blondel’s actions demonstrate that, despite her extensive trust and company administration experience, she was not aware of her legal and regulatory obligations and demonstrated a lack of soundness of judgement allowing significant breaches to occur,’ it said.

‘Ms Blondel has consistently failed to understand the gravity and consequences of her actions.’

She cooperated with the commission’s investigation and agreed to settle at an early stage of enforcement, which led to a significant discount on the fine and prohibition imposed.