Solictors sanctioned following Insolvency Service investigations

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29 June 2015

Probate: majority of Armitage's misappropriations

Probate: majority of Armitage’s misappropriations

A retired solicitor has been made subject to a maximum 15-year bankruptcy restriction order for misappropriating funds from his clients’ accounts, overcharging clients and falsifying his records to cover up his actions.

In a separate ruling that also followed an Insolvency Service investigation, a solicitor from Essex has been disqualified as a director for five years after non-payment of a Crown debt of over £200,000.

Exeter County Court ordered that retired solicitor Simon Michael Armitage (65) be bound by the restrictions set out in insolvency law that a bankrupt is subject to until they are discharged from bankruptcy – normally 12 months – until 2030.

The restrictions include that he must disclose his status to a credit provider if he wants to secure credit of more than £500, and cannot manage or control a limited company during this period without leave of the court.

The investigation found Mr Armitage’s misappropriations occurred over the course of four years between 2009 and 2013.

It also found that between July 2009 and December 2013, Mr Armitage transferred money from his client’s accounts to himself, his creditors and other clients from whose accounts he had previously misappropriated funds. The majority of the misappropriations occurred in probate estates and the victims were most often the recently bereaved beneficiaries. He falsified his ledgers and cheque books to cover up what he had done.

In addition to the misappropriated funds, he owed private lenders, banks, trade suppliers, government departments and credit companies at the date of his bankruptcy order.

His actions came to light as a result of a complaint after he joined another law firm.

Catherine Newell, Assistant Official Receiver, said: “Mr Armitage was in a position of trust and was relied on by his clients. The seriousness of Mr Armitage’s conduct warrants the maximum restriction and sends a clear message to others in his position on the consequences for abusing such a position of trust.”

On 21 February 2014, Mr Armitage petitioned successfully for his own bankruptcy and a Bankruptcy Order was made against him. His total debts currently stand at £1m.

Mr Armitage has already appeared at a preliminary hearing in Exeter Crown Court and has been charged with 10 offences of fraud and one of forgery. The case has been adjourned until July 2015.

A spokesman for the Solicitors Regulation Authority (SRA) said he is due to appear before the Solicitors Disciplinary Tribunal in October.

Elizabeth Cousins, a Brentwood solicitor and former principal partner of Scannells Hunt LLP, has been disqualified as a director for five years after non-payment of a Crown debt of over £200,000.

Ms Cousins (58) has given an undertaking which means that she is prevented until June 2020 from becoming involved in the promotion, formation or management of a company.

Scannells Hunt was placed in liquidation on 21 November 2012 with a tax liability of over £238,709 to HM Revenue & Customs (HMRC) still owing. In signing her disqualification undertaking, Ms Cousins admitted that she had failed to ensure Scannells Hunt complied with its statutory obligation and had caused it to trade to the detriment of HMRC.

Mark Bruce, chief investigator, investigation and enforcement services at the Insolvency Service, said: “Limited liability protection is a privilege to ensure businesses trade in an open and fair market. Such protection is only available to those who comply with their obligations. If those obligations are ignored, that protection will be withdrawn.”

The SRA spokesman said: “We are aware of the matter and now that proceedings are complete, we’ll decide on an appropriate course of action.”

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