Conveyancing: Six transactions where buyers were unable to complete registration
A solicitor who “completely failed to recognise the significance of being a partner” in a law firm and the responsibility that involved has been struck off by the Solicitors Disciplinary Tribunal (SDT).
Ejaz Ahmad denied all the allegations against him. However, the SDT said the Compensation Fund had received claims of £1.8m against his firm, LG Law Chambers in East London, and “paid out in excess of £1.2m”.
It is the third major payout facing the fund as a result of cases we have reported in the last week – one that could cost £900,000 [1] and the other £600,000 [2].
The tribunal said Mr Ahmad had allowed his name to be used by the firm and “permitted the improper payment of over £1.2m of client monies”, giving a former partner, named in the ruling only as ST, unsupervised access to client account.
“Whilst he may not have made all the payments, the respondent was directly responsible as the sole signatory on the account from which the payments were made.”
The tribunal said Mr Ahmad secretly filmed himself giving the client account details to ST.
“It was clear that, given he filmed the interaction, the respondent had suspicions about ST. Notwithstanding those suspicions, he provided her with unfettered access to client monies.
“No solicitor acting with integrity would simply lend their name to a firm for it to be used in the firm’s documents.
“Nor would a solicitor acting with integrity, who was so suspicious of their business partner that they felt the need to covertly film them, provide that partner with unfettered access to the client account, or make transfers on that partner’s instructions without undertaking any due diligence.”
The tribunal heard that Mr Ahmad was born in 1954 and admitted as a solicitor in 2013. He joined LG Law Chambers in November 2014, where ST had been the sole owner. ST resigned in July 2015.
An investigating officer from the Solicitors Regulation Authority (SRA) visited the firm in October 2015, “as a result of irregularities in respect of conveyancing transactions”. The SRA closed down LG Law Chambers early the following month.
Mr Ahmad told the SRA that ST and a caseworker were responsible for the “fraudulent transactions”. ST told the SRA she had not had any involvement with the firm since her resignation.
The SRA investigation identified six conveyancing transactions where LG Law Chambers acted for the sellers, and the buyers had been unable to complete registration.
In each case payments were made from the sale proceeds to “seemingly unconnected third parties”, leaving the client account with a cash shortage of at least £1.2m by the end of October 2015.
Mr Ahmad was found to have “made or permitted to be made” improper payments from the client account of LG Law Chambers, failed to remedy the shortage that result and failed to keep properly written up accounting records.
He was also in breach by failing redeem six charges over five properties in accordance with undertakings, failing to have a COLP or COFA in place for a period of time, and failing to disclose information to the SRA.
The tribunal dismissed the allegation that Mr Ahmad had acted dishonestly regarding the improper payments from client account and in giving false information.
“As the tribunal could not be sure that the respondent had made all of the transfers, it followed that the tribunal could not be sure that the respondent had knowingly transferred monies from client account to unconnected third parties, or that the payments were deliberate and conscious decisions to make payments to unconnected third parties.”
In mitigation, counsel for Mr Ahmad argued that he “had been drawn into a firm where certain activities appeared to have been in train, and he appeared to be a victim of deceit”.
The tribunal noted that, on his own case, Mr Ahmad had lent his name to the firm as a “courtesy” to help it avoid closure. He considered himself an ‘honorary’ partner unable to work for the firm on a regular basis due to health issues.
However, the tribunal “considered that the respondent’s failings and the harm caused were so severe that the only appropriate and proportionate sanction” to protect the public and the profession’s reputation was to strike off Mr Ahmad. He was ordered to pay £20,000 in costs.