Go back to William Joseph Harris for a moment, the sole practitioner solicitor from article four, struck off after handling £8.8 million across 63 conveyancing transactions without properly checking where the money came from.¹ Now go back further, to Teodoro Nguema Obiang Mangue, the Equatorial Guinean government minister from article two who spent an estimated $300 million on property and luxury goods around the world while earning an official salary of under $100,000 a year.² These aren't the same failure. They just look similar on the surface, and that's exactly why so many small firms get this wrong.

Harris's failure was a source of funds problem: nobody checked where the money for those specific 63 transactions actually came from. Obiang's case was a source of wealth problem: nobody who helped him buy a $30 million Malibu mansion stopped to ask how a government minister on a modest official salary had accumulated enough overall wealth to be buying at that scale in the first place. Confuse the two, or worse, assume checking one covers the other, and you end up with exactly the gap that put Harris in front of a disciplinary tribunal, and let Obiang move hundreds of millions of dollars through property for years before anyone stopped him.

AUSTRAC's own guidance draws this distinction clearly. Source of funds is about a single transaction: where did the specific money for this purchase come from. Source of wealth is about the bigger picture: how did this person accumulate their overall assets in the first place, and does that story make sense given who they are.³

Here's a simple way to hold the two apart. If a client is buying a $1.5 million property, source of funds asks: where did this $1.5 million come from, a bank loan, the sale of another property, savings, an inheritance? Source of wealth asks a broader question: given this person's occupation, business history and background, does it make sense that they have this kind of money at all?

AUSTRAC's guidance gives a useful example of when the answer is obvious and further digging isn't needed: a buyer using a standard bank loan to finance a purchase. The source of funds is clear, it's the bank, and the bank has already done its own checks before approving the loan.³ The problem cases are the ones where the answer isn't obvious, and where a professional has to decide whether to accept a vague explanation or ask a harder question.

Harris's tribunal findings centred specifically on source of funds. Over 63 conveyancing transactions worth £8.8 million between January 2022 and September 2023, he simply didn't conduct the checks that would establish where each client's money for that specific transaction had come from.⁴ He wasn't necessarily failing to ask "is this person believably wealthy." He was failing to ask the narrower, more mechanical question: for this specific settlement, where did these specific funds originate, and can I see evidence of that?

This is the check most small firms actually think they're doing when they ask a client for a bank statement. But a bank statement showing a deposit doesn't tell you where that deposit came from. If $500,000 lands in a client's account three days before settlement from an account you've never seen before, a single bank statement doesn't answer the question, it just moves it one step back.

Obiang's case is the mirror image of Harris's. Nobody has suggested the individual purchases lacked paperwork, land titles were transferred, contracts were signed, professionals were involved at every step. What was missing was the broader sense check: does this buyer's declared occupation and salary plausibly explain a $30 million mansion, a private jet, and a fleet of luxury cars? A government minister earning under $100,000 a year is not a description that obviously supports a $300 million lifestyle.² That's a source of wealth failure, and it's the kind of gap that a source of funds check alone, confirming that the money for one specific purchase moved from account A to account B, would never catch.

Most small agencies, conveyancing practices and jewellers only ever ask the narrower question, and often only partially. They ask "where's the deposit coming from," get an answer like "my savings" or "a gift from my parents," and treat that as the end of the conversation. That's a source of funds answer, and often not even a well-verified one. It says nothing about whether the client's broader financial position, their income, their business, their history, actually supports the scale of what they're buying.

AUSTRAC's guidance is direct about what counts as adequate verification here. The questions worth asking yourself before you're satisfied are straightforward: why and how does this customer have the assets they do, and can you easily explain their source of wealth or source of funds through something concrete, like their occupation, an inheritance, or a documented investment.³ "They said it was from savings" is not, on its own, an explanation you could relay confidently to a regulator.

For a small business without a compliance team, the simplest fix is to ask both questions explicitly, as separate items, every time a transaction crosses whatever threshold your AML/CTF program sets for enhanced checking:

Higher risk clients, politically exposed persons, buyers using complex trust or company structures, clients from jurisdictions with weak AML regimes, warrant more on both fronts. Straightforward domestic buyers using a standard mortgage, the example AUSTRAC gives as usually needing no further digging, warrant proportionately less.³

Harris's strike-off and Obiang's forfeited mansion weren't caused by the same mistake, and that's the point. A firm that only ever checks source of funds can still let a client with an implausible overall financial story buy freely, exactly what happened around Obiang for years before US authorities intervened. A firm that only forms a vague impression of someone's general wealth, without checking the specific money moving through a specific deal, can still let laundered funds pass straight through, exactly what the Solicitors Disciplinary Tribunal found in Harris's practice. You need both questions, asked separately, and both answers documented.

The next article in this series moves from these two individual professionals and firms to the pattern that connects almost all of these cases together: how criminals structure deals using trusts, companies and nominee buyers to make both of these questions harder to answer.

Next in this series: "Case Study: Trusts, Companies and Nominee Structures in Property Transactions."