A solicitor, legal executive and non-lawyer consultant at a West Sussex-based law firm have been sentenced to over 14 years in prison after being found guilty of embezzling almost £700,000 of client funds over seven years.
Simon Kenny, who was also a deputy district judge before being removed from the bench, was sentenced to six years, as was Emma Coates, while Stephen Hiseman received a two and a half year sentence, following a nine-week trial at Southwark Crown Court in London.
The offences took place at CK Solicitors in Selsey, which was closed down by the Solicitors Regulation Authority (SRA) in 2011. Kenny, 60, was its sole principal and had been in relationship with Coates until about 2010.
He was found guilty of two counts of fraud by abuse of his position. The offences occurred between January 2007 and May 2011 while he was the sole principal of CK Solicitors. Kenny was convicted in respect of transferring client money to cover the money he and Coates had drawn from the firm.
The extent of Kenny’s deceit was exposed by the tragic death of the firm’s accountant, Robert Foskett, who realised that he had become unwittingly involved in the fraud – a realisation which troubled him so much that he ended up taking his own life, and naming Kenny in his suicide note, according to Sussex Police.
In 2013, the Solicitors Disciplinary Tribunal struck off Kenny, which led to his removal from the bench in early 2014.
The court also heard that once word got around at Wandsworth prison that Kenny was a former judge, he had to be moved to a protection wing.
Judge Peter Testar said: “It is difficult to imagine a more spectacular breach of trust by someone running a legal practice to the clients of that practice.”
Coates, 47, was found guilty of two counts of fraud by abuse of position. Between December 2008 and November 2011, she was responsible for making a series of transfers from the firm’s client accounts to her own.
After the SRA intervention, Coates went on to establish Coates & Co and was able to defraud clients and steal funds coming into her possession when acting as an executor for local residents – this came to light during 2014 when the investigation was passed to officers of the Sussex Police Economic Crime Unit.
During the six year period, it emerged that Coates used client money to fund a lavish lifestyle – spending £10,000 on a hot tub, purchasing a Range Rover and financing a holiday to Barbados for herself and a group of friends.
She regularly attended horse races at both Cheltenham and Goodwood, and at least some of the client money was used to finance monthly mortgage payments on a series of properties.
The 2013 tribunal made her subject to a section 43 order, meaning that solicitors could not employ her. In 2015, she was excluded from membership of the Chartered Institute of Legal Executives for a minimum of five years.
Non-lawyer Stephen Hiseman, 60, was found guilty of two counts of fraud while acting as a freelance legal consultant associated to CK Solicitors – he convinced some clients that he was a solicitor.
Hiseman, a long standing friend of Kenny, became involved in the transfer of £60,000 of client money which was diverted to his own foreign bank account. He had earlier obtained £5,000 from another client by abusing his position and misrepresenting the outcome of a debt settlement.
He was made subject to a section 43 order in late 2013.
Dectective Constable Nikki Thiim of Sussex Police economic crime unit said: “This was a complex investigation which was delayed in coming to court due to procedural issues brought about by one of the defendants. These convictions have exposed the deceit and greed of a group of individuals who have consistently denied exploiting the trust placed in them by members of the public, and the theft of almost £1m.
“The court heard how their deception not only led to victims losing thousands of pounds but that Kenny’s action had directly contributed to Mr Foskett tragically taking his own life.
“The fraud caused property transactions to fail, the theft of family inheritances and the dissipation of child trust funds.”
Sussex Police will now undertake a financial investigation to pursue the possibility of recovering assets held by the defendants under the Proceeds of Crime Act.