Law firm and director fined over inadequate due diligence checks

A South London law firm, Topstone Solicitors Limited, and its director Silas Ogbonna have been fined for failing to complete proper due diligence checks on two property deals.

Sanctions were imposed by the SRA following a regulatory settlement agreement that was approved by the Solicitors Disciplinary Tribunal. It was found at tribunal that due diligence checks had not been performed by Ogbonna on two property transactions made in August 2018 and January 2019. Furthermore it was found that Ogbonna failed to identify that one of the clients was a politically exposed person under which anti-money laundering regulations would have required completion of further checks.

Ogbonna stated that during the course of the checks a “manual override” function was used to ensure that the checks appeared as compliant, rather than non-compliant. Similarly, checks relating to sources of funds were not properly completed despite Ogbonna indicating that they had been.

Ogbonna allowed a payment of £37,865 to be made from his firm’s client account after one of the transactions was aborted in September 2018, therefore providing a banking facility. Ogbonna argued that the client had been recommenced to him from a reliable agent but was not aware that the client could be a politically exposed person.

The tribunal also heard that Ogbonna, proposed a fee of £2,340 for each transaction. He was however supposed to verify the identities of clients and parties making payments into the firm’s client account, as well as the sources of funds received, which he failed to check adequately.

Ogbonna was fined £12,500 and will be subject to conditions preventing him from being a compliance officer for two years. The firm was fined £15,000. Both the firm and Ogbonna will pay joint costs of £10,000.

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