Gambling addict ‘borrowed’ £1.2m from client account reserves

A solicitor has been struck off after admitting to withdrawing more than £1.2m from the reserve client account to fund a spiralling gambling addiction.

Sole practitioner Richard Sedgley, from Bournemouth, made 59 transfers from the client account over the course of two months as he struggled with problems in his personal life, the Solicitors Disciplinary Tribunal heard. 

This left a client account shortage at various times between March 2016 and June 2016, although the shortage had been replaced in full by Sedgley by mid-June. His firm was closed by a Solicitors Regulation Authority intervention in June 2016.

Sedgley, 66 this year, accepted he had been taking money from the client account and then putting it back, but he insisted he had no intention of permanently appropriating client funds.

As well as a gambling addition, Sedgley told the Solicitors tribunal he was in a ‘kamikaze state of mind’ following two bereavements: the sudden death of a work colleague and the death of a close personal friend. He said the first relevant withdrawal from a client account was on the Monday after the second funeral.

Sedgley, a solicitor for 38 years, said he had come to understand through counselling that after a build-up of work pressures and personal grief he had ‘pushed the "sod-it" button’.

He was able to transfer money from one account to another on his computer screen on an almost daily basis for two months. He told the tribunal that he did not believe he had an understanding that what he was doing would be regarded as dishonesty.

He had paid the money back through his winnings, and by April 2016 he had been ‘coming to his senses’ and vowed to himself he would stop making transfers.

He accepted that other solicitors would find his conduct to be ‘horrendous’ and he could hardly believe he was the person who had done this. Sedgley told that tribunal that, given his state of mind at the time, he did not appreciate an honest person would regard his actions as dishonest. He did not pretend the matters were not serious, but told the tribunal he deeply regretted what had happened and that he was not thinking clearly at the time.

The tribunal heard from two solicitors prepared to give evidence in support of his character. They had come forward after reading reports of allegations against him in the local press.

The SRA, prosecuting, said the amount taken had been ‘breathtaking’, and that even if he had been stressed, Sedgley knew it was wrong to take the money and that clients' funds were sacrosanct.

The tribunal accepted his behaviour was out of character and he had been caught up in his gambling problems: until the events in question members were satisfied he had been a ‘thoroughly honest, decent and hard-working solicitor’.

But the tribunal said Sedgley had known he was not entitled to use the money and understood that the conduct was wrong. The tribunal was ‘forced to the irresistible conclusion that in making such a large number of transfers… was dishonest by the ordinary standards of reasonable and honest people’.

The judgment added: ‘His actions were planned, in that he had to log on to the banking system and make the transfers; none of the transfers were accidental. As a solicitor, [Sedgley] was in a position of trust and in particular was expected to protect client money.’

He was struck off and ordered to pay SRA costs of £5,600.

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Gambling addict ‘borrowed’ £1.2m from client account reserves