SDT throws out wide-ranging allegations against solicitor
Tribunal: dismissed all charges
The Solicitors Disciplinary Tribunal (SDT) has dismissed all charges made against a solicitor, including alleged breaches of accounts rules and money laundering regulations, and failing to supervise properly a consultant who had been struck off the roll.
Following the unusual wholesale dismissal of the case against Rajendra Mashru, who was admitted as a solicitor in 1979 and was a partner at now-defunct firm Blackstone’s in Middlesex, the tribunal rejected applications by each side for costs.
The five allegations made against Mr Mashru were that: improper payments into, and transfers or withdrawals from, his client account were made; he had insufficient regard for money laundering regulations; he participated in or facilitated a transaction bearing the hallmarks of advance fee fraud; he failed to comply with his supervision obligations; and he permitted the consultant to be involved in conducting litigation after being struck off.
Explaining the receipts and payments which attracted the allegations, Mr Mashru, who had been his firm’s compliance officer for both legal practice and for finance and administration since it opened in 2009, said he understood the money was in connection with a property purchase and that “there was nothing to raise alarm bells”.
The consultant, RB, was recommended by another partner and had been employed despite having conditions on his practising certificate after the Solicitors Regulation Authority (SRA) had intervened in his previous firm, including an allegation of dishonesty. Mr Mashru said he took comfort from the fact the SRA had allowed RB to continue practising.
He had been aware of RB’s strike-off in March 2014, after the consultant had left Blackstone’s. While RB had attended a meeting after this date, Mr Mashru denied RB had in any way been participating in or conducting litigation and said he had explained transparently to the client that RB was no longer employed by his firm. Appearing as a witness, the client confirmed this was true.
The tribunal dismissed the accounts rules allegation, saying it “was not satisfied beyond reasonable doubt that the payments into and withdrawals out of the client account were not in respect of instructions relating to an underlying transaction”.
In relation to the money laundering regulations allegation, the tribunal accepted that payments and repayments in and out of client account were explained by a change of mind about a property purchase. They were therefore “not unusual” and, further, “the respondent had established a connection between all parties. These were legitimate relationships.”
On the charge there had been hallmarks of advance fee fraud, the tribunal referred to “ambiguity” and accepted the transaction’s “features were not suspicious”. Therefore “the tribunal could not be sure beyond reasonable doubt that there was an advance fee fraud and… could not be sure that the respondent facilitated it, let alone participated in it”.
In relation to the charge concerning supervision of RB, “the tribunal was not satisfied beyond reasonable doubt that the supervision of RB was inadequate or that it breached the assurances given to the SRA by the respondent.”
On the consultant’s alleged role in conducting litigation, the tribunal accepted it was reasonable that a struck-off solicitor could be “kept in the loop” when he was a friend of a former client without it amounting to participating in the conduct of litigation. Mr Mashru had been clear with the client that RB had been struck off.
Costs do not follow the event in the SDT, and the SRA sought £37,474 in costs, alleging that Mr Mashru “had brought matters on himself through a lack of comprehensive paperwork and in his responses”.
Mr Mashru rejected this and claimed costs of £54,383, although he acknowledged the case had been properly brought. The tribunal agreed and said it had in fact been “diligently prosecuted”.
But while the solicitor had “not helped himself in some respects, his failings were not such that he should have to pay the [SRA’s] costs”.
An SRA spokesman said: “Now we have the decision, we can examine the reasons in detail. As the decision says, the tribunal said that we were right to bring the prosecution, but had not proved the allegations to the criminal standard of proof that the SDT uses.”
Tags: money laundering, Solicitors Disciplinary Tribunal, Solicitors Regulation Authority, supervision
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