The Solicitors Disciplinary Tribunal (SDT) has struck off a solicitor whose conduct has led to 25 claims on the SRA Compensation Fund totalling £750,000.
Aziz-Ur Rehman was formally found to have dishonestly made improper transfers of “at least” £198,000 from money meant to be used in conveyancing transactions, but the tribunal indicated that more had likely been taken.
Mr Rehman, admitted in March 2009, began trading as a sole principal in July 2009 from Morgan Mark Solicitors in Ilford, Essex. An immigration lawyer, he employed two solicitors to handle conveyancing, which made up 85-90% of the firm’s work.
The Solicitors Regulation Authority (SRA) received a complaint in April 2019 about Morgan Mark’s “facilitation of an unregulated investment scheme in which the investors (mainly overseas) could buy a room in a ‘soon to be refurbished’ care home”, the tribunal heard.
“The intent was that the care home would be furbished, and residents would then be found, which would then provide a yield to those who had purchased or invested in a room.”
A forensic investigation officer (FIO) from the SRA visited the firm and reviewed several conveyancing files involving the purchase of bedrooms in hotels, student accommodation and care homes by overseas clients.
The FIO’s concerns included the inadequacy of anti-money laundering checks and Mr Rehman’s explanation that the firm’s books of account had only been completed to six weeks earlier because the bookkeeper was on leave.
When the FIO returned to the firm a month later, he was told that Mr Rehman had gone to Pakistan “on short notice due to a family emergency”; a week later, the solicitor emailed the FIO to say he was not sure when he would be returning to the UK, even though nobody else had access to the firm’s bank accounts or books of account.
After Mr Rehman failed to respond to statutory notices requiring him to produce books of account, bank accounts and client ledgers, the SRA closed down the firm in August 2019.
The resulting investigation found the balance on client account was £3,200 when it should have been the £201,800 received for purchases in seven conveyancing transactions; the money was sent the previous month to three people unconnected with the transactions.
The SDT said that “at no stage” during the SRA’s investigation or the tribunal proceedings had Mr Rehman “provided a response to the allegations that he faced or any explanation of the matters under investigation”.
He was neither present nor represented at the hearing last month.
He was found to have acted dishonestly in causing or allowing improper transfers of at least £198,000 from the firm’s client account and in causing or allowing some of that money to be “misused and/or misappropriated”.
The SDT said the FIO examined only seven client files and, whilst it “did not speculate as to the true amount of client funds that were misused and/or misappropriated”, it noted that by 2 December 2021, the SRA had received 25 claims on the Compensation Fund from former clients totalling £751,989.
The tribunal said Mr Rehman was “an experienced solicitor of 10 years qualification” as well as COLP, COFA and money laundering reporting officer at his firm.
“It mattered not to the tribunal how the client monies were used by Mr Rehman; the fact remained that they were not used in accordance with client instructions in that they had deposited those funds with the intention of purchasing property, and the monies were dissipated without being applied for that purpose.”
The SDT said it had found dishonesty proved with regard to “numerous transactions over a six-week period in 2019”. Mr Rehman was struck off and ordered to pay costs of £25,300.