Ernest Hedwa Mugadza
- Application 11630-2017
- Admitted 2004
- Hearing 6 September 2017
- Reasons 20 September 2017
The SDT ordered that the respondent should be struck off the roll.
The respondent had failed to carry out any adequate enquiry in relation to NK and RW before employing them to work at his firm, in breach of principles 6 and 8 of the SRA Principles 2011.
Between 31 August and 12 September 2016, he had received a total of £2,686,563.62 into his client bank account and authorised 10 payments from that account totalling £2,681,695.77 to third parties, and had thereby recklessly facilitated five conveyancing transactions that bore the hallmarks of mortgage fraud, in breach of rule 20 of the SRA Accounts Rules 2011 and principles 2,6 and 10.
Between May and September 2016, he had failed to exercise any or any adequate supervision or control over NK, which had permitted NK to carry out conveyancing transactions that bore the hallmarks of mortgage fraud, in breach of principles 6 and 8 and outcome 7.8 of the SRA Code of Conduct 2011.
He had failed to comply and/or ensure compliance with the Money Laundering Regulations 2007, in breach of principle 7 and outcome 7.5.
He had failed to maintain client ledgers, in breach of rule 29 of the rules and principle 8.
In his capacity as the firm’s COLP and COFA, he had failed to ensure compliance with the rules and the regulations, in breach of rules 8.5(c)(i) and 8.5(e)(i) of the SRA Authorisation Rules 2011.
The respondent’s actions were not planned. He had had inadequate systems and safeguards in place which left him vulnerable to manipulation by RW and NK.
The harm caused was substantial and matters were aggravated by the fact that a total of 10 payments across five separate transactions were involved, albeit that they had taken place over a short period of time.
The misconduct was mitigated by the fact that he had been deceived by RW and NK. The respondent had shown remorse for the consequences to the clients.
The only appropriate sanction in the circumstances of this case was a strike-off.
The respondent was ordered to pay costs of £14,300.