Property: partner failed to enquire about source of funds
A partner has been fined £10,000 plus £28,000 costs for being “sloppy, lazy and careless” when acting in conveyances on the instructions of a third party without confirming them with the clients or conducting due diligence on the clients or transaction funds.
At the material time, Anthony Gale was a partner at Yorkshire firm Maurice Smiths Solicitors, which has since merged with Leeds practice Ison Harrison.
Mr Gale, who qualified in 1990, was the firm’s compliance officer for finance and administration (COFA) and its nominated money laundering officer (MLRO).
The SRA received complaints from clients A and B relating to five conveyancing transactions Mr Gale carried out between 2005 and 2014.
It was alleged that the properties had been variously transferred, removed, sold and re-mortgaged without appropriate knowledge, instruction or consent, at the direction of C, B’s ex-husband and A’s father.
The transactions involved individual conveyances worth over £59,000 and funds totalling over £110,000.
Mr Gale admitted some of the allegations and denied others.
In relation to two of the properties, for which there was no evidence on either file as to the source of the funds received for completion of either purchase, Mr Gale told investigators the instructions came from a third party and that he could not recall making enquiries about the source of funds.
He added: “I don’t think there is any need for it. No, I don’t think there is any need do to. In my view I can’t see why even now”.
In respect of another property, Mr Gale admitted to the tribunal in evidence that he had been “lazy and careless” and had made mistakes.
In respect of a further transaction, he admitted to the tribunal it was “a mess” and again accepted that he had not confirmed instructions.
He acknowledged he had attended annual training in respect of his COFA and MLRO roles.
He told the tribunal there had been no conscious decision not to undertake the money laundering checks and that “there had been no alarm bells ringing”.
In mitigation, Mr Gale said he had been “lax and careless when dealing with routine transactions” and that he was “ashamed and disappointed to find himself before the tribunal” after an unblemished 30-year career.
The tribunal recorded: “The respondent knew the family very well. His actions in not obtaining proper instructions amounted to gross neglect and carelessness. However, the tribunal was not satisfied beyond reasonable doubt that he had lacked integrity.”
Deciding sanction, the tribunal found Mr Gale had been “sloppy, lazy and careless” but also that he co-operated with the SRA’s investigation.
“Fortunately” there had been “no harm caused to individual clients”, although “the potential for harm was high”.
Concluding that a financial penalty was appropriate, the tribunal said: “The respondent had made the mistake of accepting instructions from one member of a family and in doing so had lost sight of his obligations to individual clients.”
I’m glad you published this case as I am overwhelmed by a threat of court injunction by a neighbour who claims a fence, recently erected and well within my boundary violates her right of way. I had the fence put up after consultation with two solicitors, one of which is my conveyancer, who said I had a right to do so.
The law society docs, signed by the vendor of my property show a ‘no share’ between the two properties, but a new doc has come to light only last week, 3 years after conveyancing, which contradicts that statement on the law soc form.
The problem with the new doc is that it is an email by a para legal for the seller of my property –the sent email to my conveyancer, supposedly arrived on the day I signed contract to buy, and was never sent to me.
The para legal contents herself with reporting comments made not by the then owner of my property but her new husband, NOT AN OWNER, who had not lived at my property for the length of time of the owner. The para legal merely reported what he said and given one account she reports that a neighbour took care of a hedge, is completely false as a contractor trimmed it for years, I doubt the second statement he made can be relied upon which is that the neighbour sent her visitors via the access to my property.
I am now facing a court injunction due to inaccuracies given on Law Society documents and by the para legal of the conveyancer for the buyer.
I cannot believe I am in such a situation when I did my best, including consulting solicitors, to accommodate what I understood to be legally allowable and yet find out I have been mislead by those who were paid high sums to get it right.
In addition I am literally terrified of taking any further legal advice or following any in case I get another set of bad advice that will further land me with a court case I sought to avoid at all costs in the first place.
Being taken to a court injunction will now cost over £40,000 pounds, a large price to pay for being mislead by those who should have known better.