Partners accept fines after supervision failure led to SDLT scam
Partners of a firm have accepted rebukes and fines after their supervision failure resulted in a paralegal stealing client money worth up to £400,000.
Having signed up to a regulatory settlement agreement with the Solicitors Regulation Authority, Tara Nicolette Clifford, Bendika Johal and John Edward Samuel Goodall avoided referral to the Solicitors Disciplinary Tribunal.
Anthony Maragh was the paralegal in question. He worked for 14 years at Harrow based Johal & Co before it emerged he was stealing client funds. In 2015, Maragh was sentenced to 40 months in prison.
Using a stamp duty land tax scam, the majority of the money was stolen over a period of five years. Maragh would obtain SDLT from the client in excess of the correct amount, but provide clients with a reduced property value. Paying out the right amount on the property, he would then pocket the remainder. He used the scan on 43 transactions.
He also took funds directly from the firm’s client bank account using client account cheque and CHAPS transfer.
Prior to October 2013, Maragh had been the authorised signatory on 57 of the CHAPS transfer instruction forms. After this time, Johal was the authorised signature one form and Clifford on a further 11.
Despite not being a signatory to the client bank account of the firm, Maragh has been able to authorise the CHAPS transfers, absent of review by a partner. He was also able to generate transaction authorisation codes.
This was changed in 2013 and fax payments were only able to be signed off by partners.
As well as failing to implement effective risk management strategies, the three partners admitted to a number of accounts rules breaches.
It was highlighted during mitigation that it would have been difficult to differentiate the legitimate CHAPS transfers from the ones which Maragh had submitted for his own financial gain.
“There was no reason for the partners to doubt the explanations for the payments and Mr Maragh also gave a verbal explanation for the payments. Given that a large volume of other transactions, which Mr Maragh requested, were valid, it was difficult to differentiate between valid requests and fraudulent transactions.”
His trusted position in the firm was also highlighted, along with his apparent dedication to the firm and its clients.
“He was handling a heavy caseload and worked long hours for the firm. There was no reason to doubt Mr Maragh’s integrity.”
Johal was fined £2,000, whilst Clifford and Goodall each had to pay £1,000. They also agreed to pay £9,000 in costs on a joint and several basis.