• Application 11557-2016

• Admitted 1977

• Hearing 2 December 2016

• Reasons 17 January 2017

The SDT ordered that the respondent should be suspended from practice for 18 months from 2 December 2016. Upon the expiry of that term of suspension, the respondent should be subject to the following conditions: that he might not practise as a sole practitioner or sole manager or sole owner of an authorised or recognised body; be a partner or member of a limited liability partnership, legal disciplinary practice or alternative business structure or other authorised or recognised body; be a compliance officer for legal practice or a compliance officer for finance and administration or hold client money or be a signatory on any client account; with liberty to either party to apply to vary those conditions.

In or around January and February 2015, by failing to carry out adequate enquiry in relation to Mr ZS and Mr JS to include any or adequate enquiry into each person’s identity, employment history and qualifications before allowing them into his firm, the respondent had breached principles 6 and 8 of the SRA Principles 2011.

Between January and May 2015 inclusive, by permitting Mr ZS and Mr JS to open and run a branch office over which he had no supervision or control, the respondent had breached principles 6 and 8.

 Between January and May 2015 inclusive, the respondent had failed to have in place systems to ensure he had sufficient supervision and control over Mr ZS and Mr JS to ensure compliance with the Money Laundering Regulations 2007, as a result of which he had facilitated a suspicious property transaction and had therefore breached (or failed to achieve) principles 1, 2, 6 and 8, and outcomes 7.5 and 7.8 of the SRA Code of Conduct 2011.

By failing to redeem and discharge a mortgage in favour of RBC Europe Ltd, in accordance with an undertaking given in the Replies to the Requisitions on Title dated 13 May 2015, the respondent had breached principles 6 and 7, and outcome 11.2 of the code.

In his capacity as the firm’s compliance officer for legal practice, the respondent had failed to ensure compliance with the firm’s statutory obligations in relation to carrying out reserved legal activities and the Money Laundering Regulations 2007, and had further failed to report a material failure of those rules to the SRA, and had therefore breached rule 8.5(c)(i) and (iii) of the SRA Authorisation Rules 2011, and principle 7.

The respondent had failed to supervise his staff and he had not carried out proper checks on individuals who were allowed to carry out transactions which had resulted in fraud. His supervision had been totally inadequate and that had allowed criminals to commit fraud from his office. That was all grossly negligent.

The respondent had acted with a lack of integrity. However, he had been a victim of fraud committed by others and it was clear he was not the only one who had been duped. He had not benefited personally in any way;  indeed, the attempted fraud had cost him financially and in personal terms and was probably a very unfortunate end to his career.

The appropriate sanction in the present case was a suspension of 18 months, followed by a restriction order.

The respondent was ordered to pay costs of £7,500.