Three solicitors whose firm’s handling of conveyancing transactions cost the compensation fund almost £3m have been struck off.

Deidre Newell-Austin and Najma Assroundi were both banned following a three-day hearing at the Solicitors Disciplinary Tribunal last month. Rashad Ahsan, originally from Pakistan, was struck off the register of foreign owners.

The three, who all practised at London firm Austins Law, were all found to have aided or failed to prevent certain individuals ‘infiltrating’ the firm and committing fraud.

Newell-Austin, a solicitor for 10 years and founder of the firm in 2011, recruited Assroundi and Ahsan in early 2013 with a view to leaving the business. The two new members became partners in June 2013 but the firm was intervened in by the SRA just a month later following a complaint from another law firm, G & Co.

That complaint came after G & Co wrote to Austins saying its client had tried to enter a property following completion on a £435,000 deal, only to find occupants who were surprised to learn the property had been sold. G suggested it was a fraudulent transaction.

The tribunal heard that during early interviews with the SRA, a bookkeeper nicknamed ‘Zak’ had posed as Ahsan to confirm he had met the client in a £435,000 transaction and checked the original documents.

The tribunal heard Newell-Austin failed to exercise proper supervision over staff members – in particular Zak – and failed to prevent improper withdrawals from the client account. She also misled the SRA during the application to be authorised as a partnership, namely neglecting to say that Assroundi faced two county court judgments against her and Ahsan had been arrested in connection with one of the conveyancing transactions. He was not charged.

Ahsan was found to have compromised his independence by allowing Zak to control the firm and have access to client funds, while Assroundi had also failed to inform the SRA this was happening.

Following the start of an SRA investigation into the firm, Newell-Austin had assured officers the two new partners were competent conveyancers, but they each denied having any experience of such work.

As of February 2015, a total of £2.9m had been paid out to Austins clients from the compensation fund, with other claims still outstanding.

Newell-Austin, the only one of the three represented at the hearing, submitted she had been ‘naïve’ in allowing fraudulent individuals into the firm, but said she was under personal and financial stress and her dishonesty occurred while she was in a desperate situation. She had received references for the new recruits and said she had no reason to distrust their motives.

Both Assroundi and Ahsan said they had no knowledge of how to run conveyancing files and had no idea the transactions were suspect.

The tribunal rejected any suggestion of a sanction other than striking off.

It concluded all three had caused ‘immense harm and damage to the reputation of the profession’, and nothing they were going through could justify treating the case as exceptional.

As well as being struck off, the three were ordered to pay £75,000 in joint costs, with Newell-Austin paying an extra £10,000.