Solicitor who let wife make improper transfers from firm’s client account is suspended

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21 July 2016


SDT: “conscious decision” to give wife access to client account

A solicitor who allowed his wife to make improper transfers from his firm’s client account has been suspended by the Solicitors Disciplinary Tribunal (SDT).

The SDT said Abdul Aziz Hafezi had undertaken “no risk assessment and no checks and balances had been put into place to prevent or minimise the opportunity for future misconduct”.

The tribunal said Mr Hafezi had made the “conscious decision” to allow his wife to continue to access the client account, and have dealings with client money, despite information provided to him about the improper transactions she had undertaken.

The SDT said his misconduct was “deliberate, in the sense that it was a conscious strategy to put his wife NH in a position of trust and control over the firm’s finances and allow her to remain in that position after 3 May 2013”.

Ruling in SRA v Hafezi (case no. 11389-2015), the tribunal went on: “In the same regard, the misconduct was also calculated. NH was a lynchpin in the respondent’s practice, and despite being on notice of the risk, he allowed her to continue in post without any meaningful restraint”.

In a separate tribunal ruling, the SDT agreed to withdraw tribunal proceedings against Mrs Hafezi on the grounds of a regulatory settlement agreement she made earlier this month with the Solicitors Regulation Authority (SRA).

Banning her from working for law firms, the SRA said Naseem Hafezi admitted withdrawing and transferring money from client account without sending a bill of costs, misappropriating client money by making unauthorised withdrawals and failing to co-operate with the SRA.

At his tribunal, Mr Aziz admitted a range of accounts rules breaches, including failing to remedy breaches on discovery, retaining money in office account, and allowing his wife to make unauthorised withdrawals from client account.

The SDT rejected an allegation that he failed to co-operate with the regulator, but found that he had been reckless, an accusation Mr Aziz denied.

“He did not consider that his wife should be removed from her post, or her access restricted as there was only one occasion on which she had misappropriated client funds and he believed this was an isolated error.”

The tribunal heard that Mr Aziz “immediately removed” his wife from the practice in 2014 “when additional matters came to light”.

However, the SDT said: “The tribunal found that the recruitment of a new legal cashier and accountant were wholly inadequate to resolve the mischief. On the respondent’s own evidence, he had allowed his wife NH to continue dealing with client money, and the regime of improperly transferring client money continued unabated.

“The tribunal found that the respondent was aware of the risk of NH improperly transferring client money from 3 May 2013, but did nothing to mitigate or prevent that risk.”

The SDT concluded that Mr Aziz should be suspended for 12 months, and ordered to pay costs of £16,250. On his return from suspension he was made subject to conditions, including those preventing him from working as a sole practitioner, partner or member of an LLP, and from holding client money.

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