In-house lawyer facilitated sham £16m property schemes

SDT: Solicitor acted dishonestly

A solicitor who acted as head of legal and a “puppet director” for a variety of companies involved in sham £16m property schemes has been struck off.

The Solicitors Disciplinary Tribunal (SDT) rejected Timothy Peter Ackrel’s claim that he believed the schemes, marketing off-plan flats in the North-West of England to Asian investors, would proceed to completion. None of the developments did.

“The reality was that the schemes were a sham and the monies were being used for the wrong purposes.”

The tribunal also rejected Mr Ackrel’s argument that he was in some way under duress.

The SDT said: “In this case there was no evidence of any threat whatsoever. Even if there had been, there was no evidence that the immediacy continued over a period of almost three years.

“There would have been ample opportunity for the respondent to alert the authorities and to remove himself from the threatening situation.”

The tribunal heard that the solicitor, who qualified in 2004, worked in a law firm until he was made redundant in November 2013. He started work as head of legal for ‘Company E’, and later at Company A, while taking on the role of in-house lawyer at Company D.

He was also the sole director of Company D, where the SDT said it was “right to call him a puppet director” in that he was appointed to conceal the involvement of others.

Mr Ackrel was paid £5,000 a month by one or other of the three companies. His employment by them ended in October 2015, although he continued to do some ad hoc work for them until May 2016. He was declared bankrupt in August last year.

The proceeds of sale from the off-plan flats they marketed was over £16m as investors had to make upfront payments of 50%. The schemes marketed by Company A promised annual returns of 8-10% for up to five years.

Company A went into liquidation in April 2016. Among the “purported creditors” was Company D, which sought to submit proof of debt of £68m representing what was said to have been the value of the charges it held over the various properties owned by Company A.

The liquidator had concerns about the validity of this debt and obtained a freezing injunction against Mr Ackrel and others in October 2017.

Mr Ackrel was found to have facilitated payments of investor funds to third parties without justification and that he continued to act in circumstances where he knew that “as a result of the said payments, the schemes were unsustainable”.

He had given them a “veneer of respectability”, the tribunal said.

The solicitor was found to have “drafted, executed or registered legal charges against development sites” in circumstances where he could not have had any reasonable belief in the validity of the liabilities.

“The tribunal was satisfied that the charges in favour of Company D far outweighed any money that was actually involved. There was clearly no justification for charges worth £68m.”

He was found to have facilitated improper money movements with indicators of potential money laundering and acted in schemes “which bore the hallmarks of dubious transactions”.

Mr Ackrel was also found to have acted dishonestly.

The SDT said the creation of “meritless charges” had required the intervention of the liquidator, and the schemes had resulted in “financial losses worth millions of pounds”.

Mr Ackrel “denied knowing that the scheme operated like a Ponzi scheme” and said he believed the properties would proceed to completion, but “on the basis of the documents he would have had before him when operating the schemes”, it was “not credible to maintain that he believed the schemes were genuine and operating ethically”.

The solicitor was struck off and ordered to pay costs of over £41,000.

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