The Serious Fraud Office (SFO) today arrested seven people and carried out dawn raids across nine sites, as it announced the launch of a criminal investigation into collapsed law firm Axiom Ince and £66m of missing client money.
It said that over 80 SFO investigators, accompanied by Metropolitan Police officers, arrived at locations in the South-East early this morning to bring individuals in for questioning and search for potential evidence.
The Solicitors Regulation Authority (SRA) closed down Axiom Ince last month with it on the verge of collapse, having filed a notice of intention to appoint administrators. It had more than 1,400 people in 14 offices.
Group chief executive Pragnesh Modhwadia had previously admitted to the High Court that about £64m had been taken from Axiom’s client account in part to buy Ince & Co and Plexus Law earlier in the year, and also buy six properties and renovate a further seven.
The SFO said investigators would examine how funds passed from the firm’s client accounts with Barclays to the State Bank of India to fund various purchases.
Newly installed SFO director Nick Ephgrave – formerly a senior policeman and the first non-lawyer to hold the post – said: “There are a number of significant questions that need to be answered: clients from this law firm are missing many millions of pounds and more than 1,400 of its staff have lost their jobs. The impact on those affected is extremely serious.
“This morning, we have used our specialist powers to obtain important information that will help us get to the bottom of what happened.”
In his first interview since taking the job in September, Mr Ephgrave told the Financial Times today that the operation marked a new approach to investigations under his leadership.
He said: “We accepted the investigation on September 5 and a few weeks later we’re going through doors, gathering evidence and making arrests, and that’s the kind of approach I’m encouraging here.”
The SRA warned last month that it was set to impose a “radical” increase in solicitors contributions to its Compensation Fund following the interventions into Axiom Ince and two other multi-office firms, Metamorph and Kingly.