Solicitor struck off for fraud despite blackmail claim

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16 May 2016

HMRC: stolen money went to pay tax man

HMRC: stolen money went to pay tax man

A solicitor who took money from clients – including telling a personal injury client that he had been awarded less than he really had – has been struck off despite claiming that he was being blackmailed at the time.

Steven Ronald Shepherd, born in 1960 and qualified in 1984, was a partner at Macclesfield firm Shepherd Evans for 17 years before being expelled in 2011.

Last year he admitted to eight counts of fraud by abuse of position and one count of false accounting and was sentenced by the Crown Court in Manchester to three years’ imprisonment. He was also ordered to pay £145,000 in compensation. He initially faced 26 counts but the nine were accepted as reflective of his overall criminality.

Mr Shepherd was found to have withdrawn £145,000 from client account between April 2009 and July 2011, and concealed the withdrawals by falsifying client ledgers and other documents on client files. In one instance, he withdrew £100,000 of damages due to a client, having misled him as to the amount awarded in compensation.

Sentencing him, Judge John Potter said: “The evidence in front of me suggests that you [defrauded the money], it seems, entirely for your own benefit to, in turns, fund your gambling habit. As you well know, Mr Shepherd, yours were the acts of a greedy and selfish man, taking money from vulnerable people to stave off your creditors and, in particular it seems from the evidence, Her Majesty’s Revenue and Customs.”

In correspondence with the SDT from prison, Mr Shepherd said he had “extensive mitigation”, but acknowledged that he “borrowed” client monies and concealed it from his clients. Though he said he had always intended to pay the money back – and indeed did after conviction – he indicated that he was advised that permanent deprivation was not required to prove the offence.

“Most funds went direct to the Revenue only, I recall, one cheque went to my account – before being paid to the Revenue – I never used any personally, only to pay the Revenue.”

Mr Shepherd told the SDT that “very little” had been made in court of his contention that he had been subject to blackmail.

“It was left as if it was made up. I had reported years of threats to myself, a member of staff and most of all to my then wife and child… None of this excuses my actions but in a period of 2008-2011 I was divorced, had four failed house sales, harassed by the Revenue due to poor financial advice, blackmailed and threatened…

“Yes, I did wrong but I was trying to protect my family, including [my child], ex-wife, partners and parents, protect my business and just until all could be resolved by selling my house. Through all this my health suffered… I also developed a gambling addiction for a while.

“I apologise to all concerned but as stated, none of this was for permanent gain nor am I dishonest by nature. Desperation and depression are a dangerous cocktail and I have lost nearly everything. I hope this puts matters into context. All of this is true, some of the case present[ed] is at best misleading and in parts simply not true but upon the strict interpretation of the Fraud Act I was guilty and accept that.”

The tribunal said there was “no substantive evidence” to support Mr Shepherd’s submissions, and that neither the gambling problem nor alleged blackmail – which had been referred to by the sentencing judge – reduced the seriousness of the offences.

Striking him off, the tribunal described Mr Shepherd’s offending as “deliberate, calculated and repeated”, and said “he knew that what he was doing was in material breach of his professional obligations. By his actions, the Respondent had caused harm to clients, the profession and his business partner”.

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