Email scam solicitor used client money to refurbish offices


Emails: Solicitor did not ask about suspicious features

A solicitor who used £80,000 of client money to refurbish her offices – and paid out another £165,000 of client money after falling victim to two email scams – has been struck off.

She was found to have no systems in place to counter the risk of email fraud.

Jayanthi Reddy Saganti, born in 1948, was admitted in 2006 after first qualifying in India in 1998. She set up JusProwess Solicitors in West London in 2007 and did not use her client account until 2013, the first time she had ever had to operate one.

The Solicitors Regulation Authority (SRA) shut down the firm last February.

She admitted all the allegations made against her and the Solicitors Disciplinary Tribunal approved the outcome she agreed with the SRA.

In October 2018, Ms Saganti reported to the SRA that two of its email addresses had been hacked and the firm had made payments of £165,100 out of the client bank account based on payment instructions received in fraudulent emails.

The firm was holding £330,000 on behalf of a client (Ms C) and her former partner (Mr S), which represented the proceeds of the sale of their home.

Having settled a dispute about the share each would take, JusProwess was to distribute the funds. In September 2018, £70,000 was to be sent to Mr S’s solicitors, Appleby Shaw, who sent an email with its bank details.

However, a little over two hours later, what turned out to be a faked email from Appleby provided fresh bank details of an individual rather than the firm, saying the earlier message contained errors. There was a further email too, ending ‘.corn’ rather than ‘.com’.

The solicitor made no enquiries about the change in details or that the monies were no longer being sent to the firm.

There was also a chain of emails purportedly between Ms Saganti and Ms C, which turned out to be from fraudsters as well, as a result of which £95,100 of the remaining funds were paid away to a third party.

The £165,100 shortage on client account that resulted had not been replaced by the time the firm was closed down.

Ms Saganti admitted to failing to run her business effectively and in accordance with proper governance and sound risk management principles – there were no systems in place to check for email frauds.

She also admitted to misappropriating £80,000 of Ms C’s money between January and September 2018 to refurbish the firm’s new offices after it moved.

She told the SRA that she thought she would be able to replace the funds before the dispute with Mr S was settled, but in the end was unable to do so until December 2018.

In the event, she borrowed the money from the proceeds of a property sale by agreement of another client, with interest charged at 4%, but there was no evidence that she had advised the client to take independent legal advice. Accordingly, a conflict, or significant risk of one, arose.

In addition, Ms Saganti admitted acting dishonestly in taking the £80,000. She apologised for her actions.

Ms Saganti admitted multiple accounts rules breaches, including that the various transfers that made up the £80,000 were not recorded, while no client account reconciliations had ever been done or Solicitors Accounts Rules audit of the firm carried out.

Her final admission was that she breached her undertaking to Appleby Shaw to hold the £330,000 to its order pending agreement or an order of the court.

Ordering her strike-off, the tribunal was it was “the minimum necessary to protect the public and the reputation of the profession”.




Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Blog


Hanging out the washing

There are three crucial requirements of technology any firm needs in order to adapt to a work from home model that, for some, is somewhat worrying: security, collaboration and all-in-one solutions.


Online wills – the future or too risky?

When it comes to online wills, there are many passionate viewpoints. Many see it an essential step towards futureproofing of the industry. Others are more concerned about the online process.


Loading animation