Solicitor “tried to settle debts with promissory notes”

SDT: Solicitor behaved dishonestly

A solicitor who took the “extraordinary approach” of trying to settle his debts of over £115,000 with promissory notes has been struck off.

The Solicitors Disciplinary Tribunal (SDT) found that Kessar Nabi also used client monies to pay office expenditure.

Mr Nabi was admitted in 2008, and operated from Nabi Solicitors in Bolton. He was the firm’s COLP and COFA.

The Solicitors Regulation Authority (SRA) launched an investigation in April 2018 following concerns that the sole practitioner had abandoned the firm, and closed it in June 2018.

The tribunal found that he had continued to trade while debts increased. Mr Nabi failed to notify the SRA that his firm was in serious financial difficulty and that debts of at least £115,200 had accumulated since 2014, including a debt of £57,400 to HMRC.

Between July 2016 and May 2017, he made payments from client account where there were insufficient funds and made “over-transfers or duplicate transfers” from client to office account.

This led to a client account shortage of at least £31,500.

Finding his actions dishonest, the SDT said: “[He] knew that money was short and the tribunal noted that the transfers occurred when he had been approaching his overdraft limit.

“The tribunal had seen examples where payments to HMRC coincided with misappropriations from the client account and found that [he] knew that he was choreographing payments to meet the liabilities.

“In addition he was using office account for personal use, something he would clearly have known he was doing using client monies.”

Further, Mr Nabi tried to pay the outstanding tax bill, as well as his professional indemnity insurance and a medical agency, by way of promissory notes – promises to pay an amount in the future – but they were rejected.

This was “an extraordinary approach” for a solicitor to take, the SDT said.

Along with using client monies to pay for office expenditure, this “did not amount to a strategic plan for the running of the business and it was clearly not in accordance with proper governance and sound risk management principles” – in breach of the SRA principles.

The tribunal concluded that Mr Nabi had been motivated by “self-interest including personal financial gain” and his misconduct had been planned.

There was an “element of concealment” in the way he failed to reconcile ledgers, but he did make “some admissions” to the SRA – although he failed to co-operate with the SRA’s forensic investigations officer throughout the investigation.

Mr Nabi was not present or represented at his disciplinary hearing and offered no mitigation. He was struck off and ordered to pay costs of £10,400.

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