Retiring solicitor suspended after hiring fraudsters

A sole practitioner looking for a way out of his firm has been suspended after employing people without background checks who turned out to be criminals.

Nicholas John Huber, a solicitor of almost 40 years who practised from Tiverton, Devon, had run his firm since 1987 but was seeking for four years to sell it.

The Solicitors Disciplinary Tribunal heard that he was introduced to a non-practising solicitor, referred to as ZS, in January 2015, who brought in two more individuals, referred to as ZR and MM, with the intention of forming a partnership so that Huber could retire after six months.

But the partnership never traded and Huber remained as sole practitioner, employing ZR and MM as fee-earners until July 2015.

Huber allowed ZS and a fourth individual to work at a new branch office in London, without taking any steps to check their identity, employment history or qualifications. The firm then fell victim to a fraud as a property transaction was not carried out properly by those Huber had failed to supervise.

The tribunal heard Huber, who was the named compliance officer, had to email ZS in May 2015 to check who was being employed by the firm and where they were practising from. He also did not have access to the firm’s website, set up by ZS.

With regard to money laundering regulations, it was heard that Huber had failed to verify the identity of purported clients in a property transaction. It subsequently transpired they were not the genuine owners of the property in question. Huber failed to ensure that people working for his firm undertook anti-money laundering training.

The firm purported to act for clients in the £2.6m sale of the London property, but concerns were raised over its failure to redeem and discharge the mortgage over the property.

Huber authorised transfers to companies that had no connection to the clients, each time without proper enquiries and due diligence.

The tribunal found Huber had failed to uphold SRA principles but had not acted recklessly.

In mitigation, Huber said he was introduced to ZS by a reputable company and had been assured by him he was interested in moving to Devon for a better quality of life.

All the monies had been returned to the purchaser’s solicitors together with costs and interest. He had enjoyed many years of unblemished practice and said this had been a one-off incident where he had been an innocent victim of fraud.

The tribunal accepted that Huber had been ‘deceived by third parties’ and he had shown insight into his conduct and had closed down his firm in an orderly way.

‘This was a case where [Huber] had failed to supervise his staff and he had not carried out proper checks on individuals who were allowed to carry out transactions which resulted in fraud,’ said the tribunal judgment.

‘[Huber’s] supervision had been totally inadequate and this allowed criminals to commit fraud from his office. This was all grossly negligent… Taking into account how directly related to criminal activity this was and how grossly negligent and cavalier [he] had behaved the tribunal had found he acted with a lack of integrity.’

Huber was suspended from practice for 18 months and will have to apply for permission to ever run a firm or hold client money again. He was also ordered to pay £7,500 costs.

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Retiring solicitor suspended after hiring fraudsters