A law firm owner has been fined after unwittingly employing a bookkeeper who had previously been convicted of fraud.
Michael Elwyn Morgan, principal at Stockport firm O’Neill Morgan Solicitors Limited, took on the employee in 2016 not knowing she had been convicted two years earlier.
According to a regulatory issue agreement published by the Solicitors Regulation Authority, over the next 15 months the employee took at least £24,500 from the firm’s accounts. She did this by accepting cash from clients which she kept for herself, and by making BACS and cheque payments to herself from the firm’s office account.
The SRA said bank account checks in October 2017 showed unreconciled items which Morgan did not investigate at the time.
In September 2017, due to concerns about the bookkeeper’s performance, Morgan instructed the firm’s accountants to review its accounts. The bookkeeper left the firm before this work started, and by the time accountants had undertaken the work they discovered that money was missing. Morgan reported this to both the firm’s insurers and the SRA and replaced the missing monies.
The bookkeeper is now subject to a control order restricting her involvement in a legal practice.
Morgan admitted failing to adequately supervise her or check her work, and failing to establish and maintain proper accounting systems and internal controls. In mitigation, he said the misconduct arose due to the actions of a dishonest employee, he sold his house to replace missing monies, improved the firm’s processes and procedures and has cooperatde fully with the SRA investigation.
The SRA said he showed a ‘disregard for his regulatory obligation’ to exercise proper control of the firm. This lack of control and oversight persisted for a long period and made it easier for the bookkeeper to commit serious misconduct.
The SRA said he should be fined £2,000 as his misconduct was serious. Morgan agreed to pay £600 costs.