£1.2m lost after solicitor duped by bogus fee-earner

SDT: Solicitor was not dishonest

A solicitor who was duped into employing a bogus solicitor, who then facilitated a £1.2m conveyancing fraud, has been struck off.

The bogus fee-earner stole the identity of a genuine solicitor, and while the Solicitors Disciplinary Tribunal (SDT) said he had been a victim to some extent, his failures had allowed her to perpetrate the frauds.

Johnbosco Eberechuckwu Onyeme was born in 1965 and qualified in 2004. He set up practice as World Secure Solicitors in south-west London in April 2018; the Solicitors Regulation Authority (SRA) closed the firm just four months later.

He told the SDT that he was contacted by ‘Solicitor A’, who told him that she would like to work with him and that she had a caseload that she would bring to the firm.

He asserted that it was “commonplace in the black community to hire a solicitor if it can be shown that there is a practising certificate and the person can earn fees for the firm”.

Solicitor A provided a copy of her practising certificate, her driver’s licence and a utility bill as proof of her identity and address. Mr Onyeme also checked on the Law Society website and found that Solicitor A specialised in crime.

The SDT recorded: “As to Solicitor A specialising in crime, [Mr Onyeme] submitted that solicitors in England and Wales undertook studies in conveyancing irrespective of whether they specialise in it or not.”

He contacted both the SRA and his insurer to tell them his firm would be handling conveyancing. Asked by the SRA how he would supervise Solicitor A, given that he did not have any experience in conveyancing, he said he would be able to monitor the quality of her work “by virtue of the correspondence received from the other side’s solicitors”.

On two conveyancing transactions carried out for sellers, £1.15m received was not transferred to the sellers or those with genuine charges on the property, but instead went to third parties, partly in purported reliance upon forged copies of the land register.

There were two other property transactions for which there were no files but Mr Onyeme authorised the transfer of sums received into client account; these were not ultimately transferred because the firm’s bank blocked its accounts.

The SDT did not find Mr Onyeme knew, or ought to have known that the register of title documents were forged for the first two properties, nor was he was under a duty to question the legitimacy of the charges listed on them.

However, in relation to some of the third parties who received money from the first property, it found that he should have recognised various irregularities, such as one not being listed as holding a charge and another not being included on the redemption statement. This was manifestly incompetent, the tribunal decided.

The SDT said Mr Onyeme authorised the payments on the other two properties on the basis of information provided by Solicitor A in the absence of any supporting documentation.

“The tribunal accepted [his] evidence that he had trusted that Solicitor A was providing him with accurate information based on genuine transactions and thus did not find that [he] knew that the transactions were dubious or improper.

“The tribunal considered that [he] ought to have been in possession of the necessary documentation prior to authorising the transfers.

“He ought to have known that there was no proper basis for authorising the payments and thus ought to have known that the transactions were dubious and improper.”

The SDT found Mr Onyeme had allowed the £1.15m shortfall on client account to accrue and had not made it good, which lacked integrity.

However, it decided that he had not acted dishonestly, although he had been reckless in relation to the third and fourth transactions.

In mitigation, Mr Onyeme – who was also found to have breached other accounts rules – admitted he had been negligent but argued that he had been the victim of Solicitor A’s “fraudulent scheme”.

In deciding sanction, the SDT said: “[Mr Onyeme] was motivated by his desire to take advantage of an opportunity to add an income stream to the firm from a solicitor that was unknown to him, practising in an area of law that was unfamiliar to him. His actions were unplanned but were both permissive and reactive…

“Whilst he was not experienced in residential conveyancing, he was an experienced solicitor who was aware of his obligations as regards client monies. [His] conduct allowed over £1m of client monies to be improperly dissipated. His conduct as regards the stewardship of client monies had been reckless.”

Whilst Mr Onyeme was “in some respects a victim”, he had, by his failures, allowed Solicitor A to perpetrate the frauds.

The SDT concluded that even though he had not been dishonest, “given the level of recklessness and lack of integrity… the only appropriate and proportionate sanction” was to strike him off.

It also found that Mr Onyeme should pay costs of £27,700, but reduced this to £15,000 given his ability to pay.

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