Flats: transaction threw up red flags
A solicitor who “failed to distinguish between the personal and professional” when doing business with a family he knew, meaning that he overlooked signs of possible money laundering, has been sanctioned by the Solicitors Disciplinary Tribunal (SDT).
Daniel Mun Kin Tang was fined £7,500 and ordered to pay costs of £32,500 after being found guilty of five charges – the SDT said his own description of his work as sloppy was “an understatement”.
Mr Tang, who was born in 1980 and qualified in 2006, was a partner at north London firm Christopher Mathew Solicitors. His difficulties arose from a single conveyancing transaction in late 2012.
He acted for a company over the purchase of three flats and also in preparing an investment agreement to part-fund the deal. It involved a family he had acted for before.
The tribunal found that the transaction threw up a “number of ‘red flags’” that Mr Tang failed to address, including the deposit being paid into his client account by an unconnected third party, and a large surplus being held following completion which was paid out on a third party’s direction.
Instead, it said: “His enquiries had been superficial. [Mr Tang] was required to undertake due diligence in respect of every person involved, not only to protect the clients but to ensure that if the transaction was dubious [about which the tribunal did not reach a conclusion], he had protected himself and the reputation of the profession.”
Among the other adverse findings were that Mr Tang failed to tell the third-party investor to take independent legal advice – although there was no evidence that he took unfair advantage of her – and lodged an application to register a charge on the property with the investor’s consent, which was required under the investment agreement he had prepared.
“The tribunal was concerned with the way in which [Mr Tang] had conducted the matter. His description of his conduct as ‘sloppy’ was an understatement.
“For a solicitor with six years’ post-qualified experience at the time, who was a relatively experienced conveyancer, to conduct a file in this way was to place himself, the reputation of the firm, and the reputation of the profession at risk and was not adequate.
“The lack of file notes was not acceptable. [Mr Tang] appeared to have fallen into a trap where he failed to distinguish between the personal and professional when he was doing business with a family with whom he was acquainted.”
In mitigation, Mr Tang said he was “embarrassed and would not make the same mistake again”. The tribunal recorded: “The firm was accredited on the Law Society’s Conveyancing Quality Scheme and had since implemented rigorous conveyancing compliance checks and client-care procedures.”
The SDT accepted that Mr Tang had not intended to cause any harm, and indeed minimal harm had been caused – “but this was due to luck and not [his] judgement”.
It continued: “It was incumbent upon members of the profession to raise sufficient questions to satisfy themselves against the risks of potential money laundering concerns arising from any transaction, but particularly in any transaction that contained unusual features such as this one.
“[Mr Tang] fell short of what was expected of him and the consequences could have been dire… He had not behaved in a way that maintained the trust that the public placed in him and the provision of legal services and this would have harmed the reputation of the profession.”
The tribunal assessed the misconduct as being “at the higher end of moderately serious” and concluded that the appropriate sanction was a fine.
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