Safeguards failed enabling fraudulent transfer

Please note this story was also published on Legal Futures.

The safeguards a conveyancing firm had in place with their bank failed, enabling a fraudster to transfer money from the firm’s client account.

The firm put the safeguard in place, detailing that client transactions could only be made if two authorized people from the firm entered the branch.

This didn’t deter Ralph Aderin, 65. In 2019, he entered the branch with a fake driver’s license, purporting to be the firm’s Managing Director, and the firm’s client account details.

Aderin transferred £9,000, although this transaction would never reach its destination due to the bank contacting the firm. The following day Aderin attempted to commit further fraud by cashing two fake cheques totaling almost £13,000. He then attempted to transfer a further £8,400.

Unfortunately for him, the bank staff recognized Aderin from the previous day and kept him busy whilst waiting for the police for arrive. Shortly after their arrival Aderin is thought to have admitted his crime saying:

“I am just a white collar fraudster.”

The police found a false blank cheque in the name of the law firm in his possession.

Southwark Crown Court heard that Mr Aderin had a long history of honesty offences going back to the 1970s. His most recent convictions include a two-year sentence in 2016 and a suspended sentence in 2017, both involving a similar bank transfer fraud by using false identity documents.

His defence counsel said the fraudster had been on kidney dialysis twice a week since 2018 and because of his health was “terrified” of going back to prison.

Noting that this had not stopped him offending, Judge David Tomlinson told Mr Aderin:

“You are now 65 and your sole vocation as a while collar fraudster is unhappily true but even that carries a sort of false air of respectability.

“‘I am just a white collar fraudster’ is exactly demonstrative of a feeling on the part of those who commit these sort of offences that the banks are strong enough to absorb that sort of damage. The reality is we all pay for what you do.”

The judge also ordered the destruction the cheque books, forged cheque and fake driving license.

Aderin was handed a 20-month suspended sentence with a 30-day rehabilitation requirement after admitting fraud by false representation, possessing identity documents with intent and three counts of possessing a control article for use in fraud.

 

1 Comment

  • test

    For anyone interested, this was my company, The Partnership, and it was my ID and our company cheques that were fraudulently copied.

    The bank was HSBC and this was not the first time that they allowed fraudulent activity to take place on a client account.

    There are lessons to be learned from this for all law firms but mainly from the banks.

    We do not email our client account details anywhere, we do not include them in letters. The only place they are shown is on our secure client portal. When we send them to other lawyers they are in encrypted documents. We (used) to use security pre-printed company cheques.

    NONE of these measures were protection against the bank not checking our bank mandates nor allowing transactions on a client account.

    Anyone who thinks fraudsters are unsophisticated needs to think again ….

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