A sole practitioner has been struck off for a sting in which a client’s money was used by the solicitor’s business partner to buy a property for a much lower price which was then sold to the client at a profit.
The SDT said the client was not reimbursed for the fees he paid the property company or the inflated purchase price of the property.
The motivation for Milan Patel’s dishonest conduct was personal financial gain, it ruled. “It was planned, premeditated and concealed over a protracted period of time.”
The tribunal said the client, AB, understood he was buying the house from HB Consultants for £500,000. In fact the £500,000 Mr Patel took from AB and put into his client account enabled HB Consultants to buy the property for £438,000.
The property was then sold by HB Consultants to AB for £460,000 – a contract to which AB was not “made privy”.
Mr Patel “proceeded to add to the price” an invoice for £35,000 in fees, due to HB Consultants, plus £5,000 for chattels.
AB was not informed that HB Consultants was a client and that its director, HB, was a business partner of Mr Patel and HB in a company called HBMP Developments.
The tribunal said the addition of £35,000 was to “conceal the true purchase price”, as was the inclusion of the money for chattels “which was not subject to stamp duty in any event” and exacerbated by the fact that the property was uninhabitable and contained no chattels.
The SDT found that the “manner in which the sub-sale was effected” was not in AB’s interests because he was unaware of it and he “paid £62,000 above the true purchase price of the property”, along with disbursements he was not liable for.
Mr Patel was admitted in 2005 and was principal of ALD Legal Solicitors in Harrow, North-West London. With the Solicitors Regulation Authority investigating him, he closed the firm down in November 2017.
AB instructed the law firm Freemans Solicitors to investigate a claim against ALD Legal for the misuse of his funds and making a secret profit and Freemans sent a report to the SRA in October 2016.
AB, a resident of Saudi Arabia, instructed Mr Patel to buy a property on his behalf in the UK. After completion, the sole practitioner told AB that there had been a delay in the registration of his property due to Brexit and the “privatisation of the Land Registry”.
The property was eventually registered in AB’s name in August 2016, and Mr Patel persuaded the Land Registry to enter the price as £500,000.
Meanwhile, the SDT found that the sole practitioner had used AB’s £500,000 – received five weeks before the property purchase completed – to make 13 improper payments totalling almost £227,000 which “had no connection” to AB.
This caused a client account cash shortage at the firm of £177,000, although the money was subsequently replaced.
Mr Patel was found to have failed to act in the best interests of AB in the purchase of his property and had acted where there was a conflict of interest. He later failed to provide a proper standard of service by giving AB “misleading information”.
He was found to have acted without integrity and dishonestly.
In addition, he breached the Money Laundering Regulations by failing to check AB’s identity when he received the £500,000, and was also found to have used his client account as a banking facility.
Mr Patel did not attend the tribunal hearing and failed to submit any response to the allegations or any mitigation.
The SDT referred to a previous sanction imposed on Mr Patel in 2012 for a range of offences including lack of integrity and recklessness, and for which he was fined £15,000 and ordered to pay £38,000 costs.
On this occasion he was struck off and ordered to pay £27,400 in costs.