Law firm was “vehicle” for £5.7m conveyancing fraud

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SDT: Dishonesty finding

A solicitor who “consciously closed his eyes” to the activities of people he knew were fraudsters, agreeing to buy a law firm which was “purchased from the outset as a vehicle for fraud”, has been struck off.

The Solicitors Disciplinary Tribunal (SDT) said Mbolokele Nsimba, “motivated by the lure of substantial personal financial gain”, admitted transferring to third parties nearly £5.7m received from 10 conveyancing transactions.

The SDT described Mr Nsimba’s misconduct as a “breath-taking departure” from the standards of integrity, probity and trustworthiness expected in a solicitor.

Mr Nsimba, an immigration solicitor with no experience of conveyancing, admitted all the allegations made against him by the Solicitors Regulation Authority (SRA), apart from dishonesty.

Born in 1967, he was admitted in 2009 and from 2016 to May 2018 ran his own immigration firm, First Choice Legal Services.

In December 2017 he made an agreement with ‘Ms CD’ to buy another law firm, Cadem Hope Limited, for £10,000. Mr Nsimba became manager of the firm and a director. Both firms were shut by the SRA in May 2018.

Ms CD had left Cadem Hope in March 2018. She became concerned about attempted fraud in respect of two transactions, as the firm’s seller clients were not the genuine owners of the properties.

She reported the situation to the SRA, and funds were returned to the buyers with the agreement of Mr Nsimba. However, after she left the firm, “further concerning transactions” took place.

A total of £5.74m was received by the firm in respect of 10 conveyancing transactions, together with an “unidentified receipt” of over £487,000. The proceeds were then “improperly paid from the client bank account to third parties”, with a further £20,500 improperly remaining in the firm’s office account.

Mr Nsimba said he was approached in October 2017 by ‘Mr M’ who “held himself out to be” a mortgage advisor, and asked Mr Nsimba if he would be interested in running a conveyancing firm”.

When the solicitor said he had no experience in conveyancing, Mr M said he knew two others who did – Mr B and Mr W.

Mr Nsimba paid £10,000 for Cadem Hope, but Mr M and Mr B agreed to pay his salary of £2,800 per month, plus commission of 15%. Mr Nsimba said he went to the firm “twice or three times a week for two or three hours”.

From March to May 2018, the solicitor said he made all the payments from the firm’s bank account, “on the instructions of Mr M, Mr B and Mr W”.

Mr H, who Mr Nsimba “believed” was a solicitor but the SRA later established was not, was added as a signatory to the account early in May 2018. While Mr Nsimba was on holiday soon after, the remaining contents of the firm’s bank account were transferred to third parties.

The firm was abandoned and all paperwork was removed. The SDT heard that no accounting records were recovered.

Mr Nsimba admitted causing or allowing improper payments to be made to third parties in a situation where, among things, there was no due diligence, they had “no connection to the firm he could explain” and they were made as a result of transactions which “bore the hallmarks of property fraud”.

The solicitor also admitted allowing individuals to “assume control of the firm” by taking instructions from them and failing to take steps to monitor or control them.

On the question of dishonesty, the SDT said Mr Nsimba’s argument that he had “simply trusted the individuals who controlled his firm” was “inherently implausible” because his account showed “no basis” on which a “true relationship of trust” could have been established.

The evidence “suggested strongly” that rather than taking a “passive role”, he had “actively involved himself in the enterprise and become an instrument of fraud”.

The SDT went on: “The inescapable conclusion was that he had consciously closed his eyes to the activities of the individuals which he knew to be fraudulent and he had failed to ask the questions any honest solicitor would have asked.

“The firm had not been hijacked by fraudsters but had been purchased from the outset as a vehicle for fraud.”

Mr Nsimba was struck off and ordered to pay £33,200 in costs.