SDT: Banking facility breach would not have led to strike-off
A 75-year-old solicitor has been struck off after he provided a client with a banking facility for over 20 years and then faked a letter of retainer to cover himself.
The Solicitors Disciplinary Tribunal (SDT) said Montague Frankel would not have been struck off for the banking facility alone, especially as he has been retired since 2019.
But by submitting a letter to the Solicitors Regulation Authority (SRA) which was dated December 2014 but actually created in January 2021 – and persuading his “vulnerable” client to sign it – Mr Frankel had acted dishonestly and any lesser sanction than a strike-off would be “clearly inappropriate”.
Mr Frankel co-founded North London firm DWFM Beckman (previously DF&M Beckman and Davis Frankel & Mead) in 1973 and was a partner until 2007, after which he was a consultant for 12 years. Earlier this year, it merged with Axiom Stone to become AxiomDWFM.
‘Company A’, a property management business, was a long-time client of his and a statement of agreed facts and outcome approved by the SDT explained that, between 1997 and 2019, the firm received rents payable to Company A and paid expenses such as council tax and insurance, before forwarding the balance – less legal fees – on a quarterly basis.
Mr Frankel authorised all the payments to Company A. In total, £1.6m passed through the firm’s client account over the 22 years, with the firm deducting £114,000 in costs. For reasons not explained, the allegation only covered the period from 2004.
He told the SRA that the firm was asked “informally at the outset to deal with all management aspects”.
Company A’s owner, Mr A, was elderly and not a ‘sophisticated client’, with limited access to and understanding of technology, the statement recounted.
It continued: “[Mr Frankel] said ‘I’ve got to hold this client’s hand throughout, and he certainly is incapable of doing any of this management and administration himself but that’s why we [the firm] have in this specific case to do it.
“‘It’s only because I know this client and he was a close personal friend as well as everything else that I agreed to do it, but I’ve never done it for anybody else and I don’t believe that the firm is doing this for anybody else either.”
Mr Frankel argued that the firm was acting “purely and simply as a collection agency for the convenience of the client” and not as a bank.
He accepted all the payments could have been handled through a bank account in the name of Company A but said this would have meant “an enormous amount of extra work”.
However, the SRA said there was no underlying legal transaction and such services were not part of the firm’s normal regulated activities.
It was “motivated by the client’s preferred administrative arrangements and convenience as well as a reduction of cost to the client”.
Mr Frankel said he believed the accounts rules and various warning notices over the years about offering banking facilities were not directed at the sort of work he was doing; he thought the notices were “primarily intended for money laundering”.
In mitigation, Mr Frankel said: “It appears that this was my misunderstanding and that I was wrong. Nevertheless, such misunderstanding could be avoided by others in the future if the SRA made it clear that property management… was a prohibited activity.”
In January 2021, Mr Frankel forwarded to the SRA copies of a letter dated December 2014 sent on behalf of Company A, and signed by Mr A, confirming the details of the firm’s retainer.
However, the metadata showed it had been created shortly before it was sent. Challenged by the SRA, the solicitor said he could not locate the original signed letter, “so I retyped a copy of it and asked Company A to re-sign currently by way of confirmation of the original”.
He did not have a copy of the letter when doing so – the statement said its contents were “based upon the alleged recollections of the directors of Company A as to a letter sent in 2014” and followed Mr Frankel telling the directors, who were personal friends of his, “of the subject matter of the alleged 2014 letter and the reasons why it was needed”.
In mitigation, he admitted he was “wrong” to submit the letter. “However, that letter was genuinely signed by the client because it accurately reflected what the client had orally agreed in December 2014,” he said.
The SDT held that he had sent the letter to “conceal his other wrongdoing of providing the banking facility”. In doing so, “he seriously damaged the reputation of the profession and failed to maintain the trust the public would place in him and in the profession”.
The tribunal also considered that Mr Frankel had “taken advantage of a vulnerable person in procuring the signature of his clients to the false letter”.