CHARTERED accountants in Scotland are helping criminal gangs launder money and commit fraud, the sector's main professional body admitted last night.

Leaders of the 15,000-strong Institute of Chartered Accountants of Scotland (Icas) said ''a minority'' of members were engaged in illegal practices but conceded the problem had become so large neither the professional body, nor police fraud squads were able to stop them, unless they were given new powers.

Dr Tom McMorrow, the institute's head of legal services, said: ''The amount of illicit money slushing around the west of Scotland in particular at the moment is enormous - and it comes from many sources, including drug and human trafficking.''

Scotland has become a popular destination for human trafficking, with Shetland targeted by criminal gangs for landing illegal immigrants through a number of routes from Scandinavia, Russia, and Europe.

Icas declined to give examples, but it is known that one of its members has been found guilty of deliberately bankrupting a limited company and fraudulently transferring its assets to a ''phoenix''company, leaving the creditors of the first company, which include the taxman, ''high and dry''. The member is appealing against the finding within Icas's disciplinary structure.

Dr McMorrow said Icas wanted the government to give it new statutory powers, both to obtain evidence from non-members - who may be criminals with whom an accountant has colluded - and also to force them to testify in hearings.

He said: ''The evidence necessary to catch an errant member will probably be in the hands of someone who isn't a member. We receive minimal co-operation from someone like that, because they may be involved in the same plan as the accountant.''

There is concern about the effectiveness of the government's clampdown on money laundering, enshrined in the proceeds of crime act 2002.

Icas voiced its own fears in a letter last week to John McFall, chairman of the Commons Treasury select committee, and two submissions to the Department of Trade and Industry, copies of which have been passed to The Herald.

It told Mr McFall: ''We believe the professions must come to terms with the more sophisticated means of concealing illicit monies that organised criminals are now employing.

''There are two kinds of money laundering: first, where large tranches of stolen funds are deposited in a professional firm's bank account for instant dispersal to those in the criminal ring, and secondly, where the professional firm lends assistance to the ring, not merely in the distribution of cash but in the perpetration of the fraud in the first place.''

Dr McMorrow said: ''A minority of (Icas) membership is prepared to provide lucrative services to those engaged actively in the black economy and all that expression has come to (mean) in these modern times.

''It is no coincidence that two of the principal focuses of the National Criminal Intelligence Service and the Act are white-collar crime, and the participation of accountants and lawyers at all levels of nefarious activity.''