A solicitor who failed to spot a mortgage fraud be
A solicitor who failed to spot a mortgage fraud because he was ignorant of the rules escaped with a pnds stlg 3,500 fine today (THURS).
Stuart Nicholson, 47, had acted on behalf of two people in the ‘back-to-back’ sale of a London property.
The bulding was bought by one of the women for pnds stlg 115,000, and then immediately sold to the other for pnds stlg 175,000 – netting them a pnds stlg 60,000 profit.
Experienced Nicholson, from Surrey, admitted his involvement in the scam, but claimed he had not known at the time that what he was doing was wrong.
And the Solicitors’ Disciplinary Tribunal in central London today decided not to strike Nicholson off after he told them: ‘It will never happen again.
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The hearing was told how he was working for Nicholson & Barret in South Kensington when the incident happened in 1992.
He had been asked by a client to arrange for the purchase of a pnds stlg 115,000 property in Paddington, but the woman later dropped out of the deal and a parnership – Hayford Associates – came forward.
Gerard Lynch, for the Law Society, said: ‘There was then a decision on behalf of Hayford Ass for one of them to buy from the other the same premises at pnds stlg 175,000.
‘There was an immediate increase in the price of the premises, and it was an immediate back-to-back sale.
‘Both partners of the solicitors firm were informed of what was happening, and both were involved in deciding the extent to which the firm should be involved.
‘This was at a time when mortgage fraud was endemic.
The question is whether the interests of the building society were properly served, and in my sumission they were not.
‘What was happening here was a device whereby capital is raised at the expense of the building society.
‘Nicholson now totally accepts what happened wasn’t proper.
I don’t allege dishonesty here against him, but clearly impropriety exists.
‘What he did was not to set out to perpetrate fraud.
What he did was to turn a blind eye to what was happening.
He was a party to what was going on.
‘He didn’t see it as mortgage fraud, and thought it was a viable transaction to make profit.
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Nicholson, who now runs his own firm in Cranleigh, near Guildford, Surrey, told the tribunal: ‘I was not, at the time, aware that what I was doing was in any way wrong at all.
‘I now realise my suspicions should have been aroused and I should have acted accordingly.
‘I am ashamed to say that I was not as familiar with the practice rules as I should have been.
‘But lessons have been learned from this, and it most certainly couldn’t happen again.
‘I would also like to express my sincere and profound regret at falling short of the standards the Law Society expects.
‘I can only apologise for my lapse on that occasion, and assure the tribunal this will never happen again.
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Nicholson admitted allowing his firm to act in a conflict of interests, and failing to act with the probity and integrity required of a solicitor.
He was fined pnds stlg 3,500 and ordered to pay costs to be agreed.
Tribunal chairman John Clitheroe told him: ‘We think in the circumstances of this case professional standards were not maintained.
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ends
