A solicitor who “turned a blind eye” to the “clear and obvious hallmarks of fraud” in an early release pension scam has been struck off.
The Solicitors Disciplinary Tribunal (SDT) said Robert John Metcalfe had “sought to replace the income he had lost” with the departure of his personal injury team by bringing in “another income stream”.
Although “there was nothing on the face of what was presented” to Mr Metcalfe, principal of RMJ Solicitors in Liverpool, to alert him to the misuse of pensions, he had made “no contact at all” with any of his clients.
The SDT said he had been “indifferent” to them because it suited him and it was to his financial benefit.
“He had deliberately turned a blind eye and had asked no questions and undertaken no enquiries so as not to establish as a fact the dubious nature of the scheme.
“All of his clients were in the position to tell him that the monies were in fact released from their pensions.”
These scams persuade people to take money from their pensions before they reach the age of 55, which actually incurs huge penalties. The money will be transferred to a fund set up by the scammers, often overseas, with the individual receiving around half of it and much of the rest taken up by huge fees.
In this case, there was a 20% deduction from the sum for interest, between 12% and 22% for the introducer or agent, and 5% for Mr Metcalfe, before the rest went into the investment scheme and client.
The SDT said it was Mr Metcalfe’s role to advise clients on the nature of the transaction, but he “had no real knowledge” of it, having no access to the underlying documents.
“The respondent was, in effect being paid large amounts of money for doing very little work.”
The tribunal heard that three clients transferred their pensions to ‘Company O’. The Solicitors Regulation Authority (SRA) told the tribunal that, unbeknown to the clients, as part of the transaction they had obtained loans from Company SL and the proceeds had been paid to Company SCL.
Mr Metcalfe explained that all the instructions from his clients were “relayed to him” by SCL, and “he had drafted letters of instruction from the clients to himself based on the information received”.
He had also used SCL to obtain signatures to client-care letters.
The tribunal said the solicitor should have been “extremely concerned” that all his instructions were coming from the “ultimate beneficiary”.
Mr Metcalfe was born in 1971 and admitted in 2000. Following an inspection of his firm’s accounts in January 2017, the SRA launched an investigation and closed RMJ Solicitors in March 2017.
A separate finding against him was that he acted in a back-to-back share purchase scheme, which saw shares bought and then sold on immediately for a much higher prices.
The SRA said he acted for his “best friend” GQ in relation to the transaction, along with the buyers.
The transactions were conducted by the law firm under a “general power of attorney supposedly made by the buying client”, but there was no evidence of the solicitor giving any advice or receiving instructions. Payments made to clients were posted to a ledger for a separate company.
“The respondent did not know why a power of attorney was required other than that it had been requested by the parties.
“There was no independent valuation of the shares. The actual value of the shares was unknown.”
The SDT said these were among the factors that showed that the transaction was “dubious and bore the hallmarks of fraud”.
Mr Metcalfe was also found to have caused the firm’s client account to be used as a banking facility and failed to have taken adequate steps to ensure compliance in his roles as sole principal, COLP and COFA.
He was also found to have allowed RMJ to be “held out” as being a member of the Law Society’s Conveyancing Quality Scheme, when it was not.
Further, the solicitor was found to have failed to keep proper accounting records and permitted a third party, Company SCL, to arrange signature of client care letters.
Some other charges against him were dismissed, however.
He was struck off and ordered to pay costs of £30,500.