Foreign lawyer was duped by suspected fraudster to front firm

SDT: Serious misconduct

A registered foreign lawyer has been suspended for 18 months after being duped to front a law firm where likely fraudulent conveyancing transactions took place behind his back.

Mazhar Ali Badar eventually reported his concerns to the Solicitors Regulation Authority (SRA) when he said he was being threatened in a bid to force him to authorise payments out of the firm’s client account.

Mr Badar, 60, is a registered foreign lawyer who is also an advocate in Pakistan. He was a director of MA Law Chambers in Ilford, Essex from 1 August 2019 and then a beneficial shareholder and sole legal owner from 9 December 2019, until the SRA shut it down in February 2020

A statement of agreed facts and outcome produced by the SRA and approved by the Solicitors Disciplinary Tribunal (SDT) said Mr Badar had met a ‘Mr HA’ in the summer of 2019, “where the purchase of a firm in [his] name was discussed”.

Mr HA, whom Mr Badar described as elderly, offered him a salary of £3,000 and a 15% profit share to run MA Law, which was bought for £17,500 in the solicitor’s name.

Mr HA claimed he was a solicitor, but the SRA said the details he provided did not match those of the sole solicitor admitted to the roll with that name.

Mr Badar said Mr HA had worked from home but he did not have the address. Mr HA appointed a secretary called ‘James’ to work at the firm – Mr Badar did not know his surname but James had keys to the office and took post away from the firm. Mr Badar was not allowed to open post addressed to Mr HA.

Mr Badar also said he did not have continuous access to the firm’s email accounts and, when he was given limited access, the passwords were changed shortly afterwards.

Prior to mid-January 2020, Mr Badar believed Mr HA was doing immigration and personal injury work, but it transpired that Mr HA was handling conveyancing matters instead.

The firm could not produce books of account from 31 October 2019 onwards, but bank statements showed 125 client account transactions from then to 12 February 2020.

As a result, the SRA said it could not calculate the firm’s liabilities, nor establish whether sufficient funds were held to meet them.

The SRA exemplified two conveyancing transactions which had the hallmarks of property hijack fraud, where a property is ‘sold’ without the owner’s knowledge. The firm paid out £94,500 received from buyers to unconnected third parties.

On 4 February 2020, Mr Badar called the SRA after the firm received £230,000 into its client account for a conveyancing matter. Mr HA had asked him to transfer it into two bank accounts unconnected to the transaction.

Mr Badar was concerned that the transaction was not genuine and urged the SRA to intervene and shut down the firm.

In a second call the same day, he said he had reported the matter to the firm’s bank, which had reduced the firm’s daily transfer limit in response.

“He stated that he was in hiding from the people constantly calling him requesting that he transfer money and that he would not return home,” the SRA recounted.

In an email two days later, Mr Badar said Mr HA had sent “three of his guys with me to the bank” to make sure he transferred money from client account. However, he called the bank in advance and “police arrived at the bank and saved me from those people”.

But the lawyer said he believed that he and his family were in danger.

As well as admitting allowing a shortage of at least £94,500 on the firm’s client account, Mr Badar admitted failing to carry out client account reconciliations and keep its accounting records properly written up.

He told the SRA that the accounts were maintained by an accountant whose surname, telephone number and address he did not know.

The SRA accepted that Mr Badar had been duped and withdrew allegations that he had acted dishonestly.

Nonetheless, the SDT said “the admitted misconduct was so serious that it called into question Mr Badar’s continued ability to practise… The proposed sanction of suspension for 18 months and restrictions on his practice thereafter was appropriate and proportionate in all of the circumstances”.

On his return to practice, Mr Badar cannot be a compliance officer, hold client money or be a signatory on a client account without SRA permission.

He was also ordered to pay costs of £8,000.

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