Conveyancing: tribunal highlights Green Card warnings on mortgage fraud
The Solicitors Disciplinary Tribunal (SDT) has allowed a solicitor to continue to practise despite the fact he used “his incompetence as a shield” against the lack of integrity that was alleged, after he unwittingly facilitated a mortgage fraud that cost his lender client £744,000.
The tribunal described how complete was solicitor Ross Onotasa Monioro’s incompetence as a conveyancer. Having done so, it said it had no choice but to let him escape the charge of failing to act with integrity.
But the SDT warned its conclusion should not be used as a “get out of jail free card” by other solicitors.
The fraud concerned the respondent being instructed on transactions involving two flats at an address on the Kings Road, London, for each of which UCB Home Loans advanced £372,000. But the leasehold titles were never created.
Mr Monioro, an ordained minister who passed the legal practice course with a commendation, had limited conveyancing experience and had never carried out commercial conveyancing; he was a family law specialist.
The tribunal found that a number of aspects of the transaction were warning signs of fraud, including unusual instructions, misrepresentation of the purchase price, and incomplete contract documentation.
The Solicitors Regulation Authority (SRA) alleged that he had failed:
- to act with integrity in that he acted in a transaction which bore the hallmarks of mortgage fraud;
- to inform his lender client of material facts and/or act in accordance with its instructions; and
- to apply appropriate customer due diligence measures in conveyancing and/or keep records of his client’s identity, in breach of anti-money laundering obligations.
Mr Monioro admitted the second and third allegations, but denied he had failed to act with integrity.
The essence of his defence, as recorded by the tribunal, was that “he fell down in his stewardship of this transaction and conducted himself with a sufficient degree of negligence to be blameworthy before this tribunal. That did not mean that he acted without integrity or that that part of the case had been proved to the satisfaction of the tribunal on the criminal standard”.
The tribunal said it found Mr Monioro to be “an unsatisfactory witness” who “still had no genuine insight into the extent of his own incompetence, as evidenced by his demeanour when giving evidence. His ‘get-out’ route was that the other solicitors had not honoured their undertakings. He did not appear to take any responsibility for his own contribution in witlessly facilitating the consequences.”
But it accepted he had “glowing” character evidence and “there was no evidence to suggest that the respondent was aware that this was a fraudulent transaction”.
However, he should have been alert to the dangers of fraud outlined in the Law Society’s Green Card. “The tribunal was satisfied by the manner in which he gave his evidence that the respondent was and remains oblivious to the warning signs in the Green Card. This provided further evidence of his incompetence.”
Further, it accepted that Mr Monioro “did have an ethical compass which was pointed in the right direction. The tribunal had concluded, after thinking long and hard and weighing up the evidence carefully, that the respondent was so grossly incompetent and naïve in the way in which he conducted these transactions that he did not know that any complexities existed…
“In short, the respondent did not know how to conduct conveyancing at even its most fundamental level… He was not aware of the hallmark of mortgage fraud – it had never crossed his mind that a fraud might be committed and that he might be the facilitator by means of his own ignorance of the law in this area.”
Observing that because of the way the allegations were framed, it could not find that “gross incompetence… was of itself sufficient to establish lack of integrity”, the tribunal noted: “It was unfortunate that on the facts of this case the respondent had been able to use his incompetence as a shield against the lack of integrity allegation. This respondent had nothing to be proud of in that regard.”
But this conclusion was specific to the circumstances and should not be used out of context: “Other solicitors should not see this outcome as a ‘get out of jail free’ card.”
Summing up its views, the tribunal said: “He demonstrated what the tribunal could only describe as downright incompetence which the public would not expect, and which the tribunal abhorred. However, the respondent was not charged with having been incompetent.
“Without evidence that there was a course of conduct or a number of different transactions involved, the tribunal could not be satisfied beyond reasonable doubt that the respondent had failed to act with integrity in breach of rule 1.02, even though he acted in transactions which bore the hallmark of mortgage fraud and a mortgage fraud in fact took place.”
The SDT ordered that Mr Monioro could continue to work as a solicitor only in his specialist fields of family, immigration and crime, after paying a fine of £18,000, reduced to £11,000 due to means and other outstanding liabilities, plus £17,000 costs.
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