Conveyancing firm at centre of fraud investigation

The Solicitors Regulation Authority has confirmed it is investigating a number of claims for compensation against a legal firm specialising in conveyancing that it closed down ten months ago.

It intervened in the practice of the London firm, saying that the SRA needed to protect the interests of clients.

The firm was allegedly at the centre of a sting, by which money intended to be handed over to mortgage lenders was instead pocketed by the solicitors.

The SRA named the firm to us after a story in the Daily Mail – which did not identify it, citing a court order – and which also said there was a loophole preventing some claims. It alleged that the loophole was that the solicitors’ insurer did not have to pay up if both of the firm’s partners were fraudulent.

However, the SRA said: “Neither the supposed order banning any naming of the firm nor the assertion that there’s an insurance loophole have come from us.”

Because of the lack of clarity, EAT has decided not to name the firm.

The Mail story centred around the experiences of Gary Humphris and his family, who had a £400,000 cash offer for a property accepted.

They moved in and spent £70,000 on renovations.

But six months later, the family were told they did not own the house and that it was being repossessed.

They were told that the property sale should never have been permitted because the previous owners owed £542,000 to their lenders.

When the Humphris family handed over their money to their solicitors, this was passed to the sellers’ solicitors, from where it apparently disappeared.

Last month, Mdmustazur Rahman pleaded guilty at the Old Bailey to two counts of fraud by misrepresentation in relation to setting up a bank account in the name of the solicitors. He also pleaded guilty to money laundering.

Rahman, 28, of West Ham, was earning £7.26 an hour at Morrisons when he was allegedly recruited by a crooked firm of solicitors to open a business account with HSBC.

The following month, the Old Bailey heard, £232,000 from the sale of a house in central London was paid to him instead of the mortgage provider.

It was one of at least 25 deals overseen by the firm of solicitors at the centre of an ongoing fraud investigation by police, the court was told.

Rahman, who is the only person so far to have been charged in relation to the scam, may only have received £2,000 for his role.

He now faces being deported to Pakistan after completing his sentence.

Prosecutor Susannah Stevens said: “The allegations centre around the criminal conduct of a solicitor’s firm which is still under investigation by police.

“The fraud involved funds received from the sales or intended sales of properties.

“Money which should have been transferred on to the mortgage provider was transferred into the bank account of a third party.

“It was then quickly deposited into the accounts of others. There are investigations into more than 25 transactions involving £7.7m.”

Rahman was only involved in relation to one of the transactions and police are still investigating at least two other individuals, the court heard.

Rahman was arrested on May 10 after HSBC staff identified him from CCTV footage.