Lexington Trust Services stopped from doing business after DIA finds lax money-laundering protocols

Internal Affairs (DIA) says Lexington Trust Services had “serious problems” in not meeting its obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act. Photo / NZME

An Auckland-based asset manager has been stopped from doing business after the Department of Internal Affairs found it had lax protocols to detect and stop money laundering and financing of terrorism.

Internal Affairs (DIA) said Lexington Trust Services had “serious problems” in not meeting its obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act.

Lexington Trust Services also failed to report suspicious activity as required by law.

The DIA clarified it was not accusing Lexington Trust Services of any involvement in money laundering or terror financing.

Lexington Trust Services Limited has already been removed from the Companies Register, with a notice placed in the New Zealand Gazette last May.

The DIA said today it had accepted an “enforceable undertaking” from Lexington Trust Services. An enforceable undertaking is an agreement between the DIA and a business following a breach of the act.

Under the enforceable undertaking, Lexington Trust Services agreed not to engage in any business activities relating to money laundering or countering financing of terrorism without the DIA’s consent.

As part of this, Lexington Trust Services cannot offer services such as setting up companies, managing money or assets for clients or helping with buying or selling businesses or property, the DIA said.

It follows a review into the company by the DIA in July 2023.

Serge Sablyak, the DIA’s director for anti-money laundering and countering terror financing, said: “We will take regulatory action against businesses that show a pattern of non-compliance.

“We use different tools to deal with businesses that don’t follow the law. Enforceable undertakings help us ensure compliance without the time and the expense of the court process,” he said.

“Taking enforcement action isn’t just about addressing past conduct; it’s also about preventing future harm. It sends a clear message that compliance with anti-money laundering laws is not optional.”

Christchurch Casino took responsibility for similar major anti-money laundering failures in July. It reached a settlement with the DIA where it agreed to pay $5 million.

The DIA did not allege Christchurch Casino itself engaged in money laundering.

The DIA said it investigated the casino between May 2023 and September 2024, and found breaches of several legal obligations.

The DIA said the casino failed to establish, implement and maintain a compliant anti-money laundering programme.

It did not adequately monitor accounts, conduct compliant enhanced customer due diligence, or terminate existing business relationships when required.

Raphael Franks is an Auckland-based reporter who covers business, breaking news and local stories from Tāmaki Makaurau. He joined the Herald as a Te Rito cadet in 2022.

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