By Sally Ramage
Dear Sirs,
This letter addresses several related issues: -
a) “Benefits- in –kind” received by government officials, for instance, Pension Regulators’ Officers;
b) Cartels, collusion and corruption;
c) Income tax on Benefits-in-kind.
d) Licences maintained through “Benefits-in-kind” – is this equal employment opportunities, or are professionals acting as protective unions in order to defeat the unfair competition rules?
e) Once you’re in the magic circle, you cannot be easily removed, but getting in is the crux. Contrary to the Equal Opportunities Act.
f) Race Discrimination Act. There were three black people at the conference, which was attended by 246 white people. Is this “Equal Opportunities” in a profession that is supposed to practice the law?
g) I have a right to my good reputation and I wish it to be known that the Secretary of the APL has threatened to sue me if I do not remove my article. Almost every newspaper in the United Kingdom has at least one page about pensions, pension lawyers, actuaries and pension disasters almost every day. In my view I have been bullied, there has been an attempt to gag me and I have been threatened and now desperately fear for my life and my family.
I attended the Association of Pension Lawyers Annual Conference Event with my spouse. I took the chance because the invitation letter of the Pension Lawyers Association stated, NOT “Please feel free to bring your other half” BUT “MAKE USE OF THE BEDROOMS WHICH SLEEP TWO”. Chris Webber said at that point “But this is pensions law” and I replied, “have you not read the recent Serious Fraud Office prosecution of R v Kevin Sykes, Simon Michael Maya, Trevor Hamilton Farrell, Altaf Sayed, Ian David Selby, Cassius Augustus Powell and Adrienne Gay Morris, the CHEYNEY PENSION FRAUD?”
I wore my Chartered Institute of Journalists Pass and my National Union of Journalists Pass around my neck at all times; I read all the speeches, given out beforehand. I asked permission of the Secretary Chris Webber who asked permission from Jonathan Hazlett who told me it was fine to listen and to whom I showed the marked speeches I would like to listen to. No subterfuge here, not on my part. Also at the end of this conversation, I told them to whom I was related. I made clear that the subject I write on is Fraud and that my writings are on Mondaq. So no subterfuge on my part.
The delegates went to have a five-course dinner on Thursday night and returned to the Marriott Hotel Bristol between midnight and 2am Sunday. Many did not turn up to the conference the next day. Many bedroom doors had “DO NOT DISTURB” notices the following day.
Several enjoyed the Executive suites on the TOP floor.
I was up there in error when I pressed the wrong button on the hotel lift and I saw several delegates enter the lift with their green files of typed speeches.
They all enjoyed the most lavish cooked high quality lunches and breakfasts, all including the newly licences young ones. Each lunchtime I sat in the Business Offices area with my plain cheese and onion sandwich and my pot of tea for all to see me as they walked through to the dining room. No subterfuge on my part.
What bothers me is this. Why, at a conference for senior pension EXPERTS did a speaker have to discuss basic CONTRACT LAW, IMPLIED TERMS? Very basic stuff – I teach contract law as part of legal and regulatory framework for UK businesses.
It amazed me to see these allegedly SENIOR PENSION LAWYERS (a quick headcount of under 25’s proved several dozens looked newly qualified, if so) scribbling notes on cases such as BOLAM. “It is NOT BREACH OF DUTY if the court is satisfied that “the practice “(of whatever they are being sued about) is normal practice. If 20 years ago the pension scheme was invested in 90 % high risk and 10% low risk investments, then that was OK, because it was common practice to invest in that fashion then. So one is not liable for professional negligence.
My thoughts on that were - tell that “common practice” story to the prosecutors in R v Saunders -and – they should read my article on Mondaq - ‘The culpability of fraudsters’.
An analogy would be this – if all the cars around you were travelling at 110 miles an hour and you were stopped for speeding, is the momentary common practice a legitimate excuse for breaking the law?
What bothers me even more is that there were no less than FIVE PERSONS FROM THE PENSIONS REGULATORS OFFICE which seemed to be to be an over –cosy affair - especially as the Pensions Ombudsman is holding a seminar in London on 6th December 2005 at Brewer’s Hall Aldermanbury House, EC27HR. I wondered if these five officials have registered these benefits worth £1000 to each person, in their register of interests ,if the Pensions Regulator’s Office has such a policy of registering conflicts of interest and benefits-in-kind.
What is more, with another hat on, I calculated to that the APL made a handsome profit or excess of £147,120 from the event, notwithstanding living it up like lords at the expense ultimately of the poor pensioner. I wondered where this money is????
Even taking Value Added Tax into account, the same Value Added Tax that each delegate or his firm will promptly reclaim, to the country pensions lawyers. Still hefty at £121,374.00. It should be refunded immediately. But each lawyer or lawyer’s firm will reclaim the VAT on the delegates’ fees, and so there is another gain of 17.5% of the total fees paid, which is equal to a nice pocket of money worth £42,700. All in all, these lawyers as a body had a high class two days and a profit from the “taxman” and the “pensioners of the country” of over £164,000.00. This is no laughing matter.
The accounts should be published and open for inspection. All accounts of NOT -FOR -PROFIT ORGASNISATIONS should be open for inspection. Professional Not -for -Profit Associations go to FRANKFURT, CARIBBEAN, everywhere lovely for their conferences, ultimately at the expense of the tax payer by way of their delegate fees being a deductible item on the Profit and Loss Account. I estimate that, in the United Kingdom, at least a billion pounds a year is set off against income at tax relief rates of 35 to 40 % or three million five hundred thousand pounds (£3.5 million) refund to professional firms, fat enough already.
It is my opinion that these conferences are totally unnecessary because we have, telephones, faxes, Internet conferencing, etc. Even the courts use such methods for evidence in certain cases. Why the need to touch and feel? Unless it is so that networking meetings go UN-MINUTED? It should be televised or be usable electronic evidence allowable in a court of law.
I cannot think of any other reason except to shop in a different place perhaps? And if young conference goers need schooling, is it not better to do it “at home” in the office, so that no one knows the extent of their lack of expertise or very good expertise? I heard some of the 2003 APL Conference speeches and one female speaker, had a half hour playtime of getting these “professionals” to wiggle their toes and rub behind their ears {really] as one does whit infant school children. Really.
My proposal to the INLAND REVENUE is this:
If conference delegate fees are to remain VAT refundable and income tax refundable and corporation tax refundable, then either the employer must deduct the time spent away from the employee’s desk from their salaries (unless you are a chief finance officer or chief executive). These senior persons need to make decisions, which need to be ironed out.
Catching any cartel activity or contracts collusion, conflict of interest would be simpler. An example of potential Conflict of Interest is as found in this table: -
Possibilities of conflict of interest-
FTSE Company Finance Director Formerly from Present Auditors
AMVESCAP R Mc Cullough Arthur Anderson Arthur Anderson
Assoc of British Foods J Bason Arthur Young KPMG
BAA M Ewing Deloitte and Touche KPMG
British Land Company G Roberts Arthur Anderson Arthur Anderson
Dixons Group J Darroch Deloitte Haskins & Sells Deloitte & Touche
HSBC D Flint KPMG KPMG
P & O Princess Cruises N Luff KPMG KPMG
Sainsbury R Matthews Price Waterhouse PwC
Scottisdh Power D Nish Price Waterhouse PwC
Smiths Group Thompson Arthur AndersonPrice Waterhouse PwC
Wolseley S Webster Price Waterhouse PwC
High level meetings should be minuted. But enough is enough. These conference goers are taking the man in the street for a laugh., partying and eating lavishly. I understand that the INLAND REVENUE has limits to the amount of money each company can spend on its employees at Christmas- less than £100 maximum. These conference goers get their Christmas Party revelling on the taxpayer as well. For if a person, qualified professional or unqualified in a professional office, IS NOT UP TO SPEED, he should not be in that job because he is obtaining a pecuniary advantage by deception. Deception can mean being “paper qualified” but being “incompetent” in the job without further training. This incompetence is a separate matter to CPD. CPD means ensuring that one is UP TO DATE, not that one catches up on one’s initial incompetence or compertence and this goes for all meetings and conferences. If you cannot say it on paper, you cannot say it full stop.
CARTELS work in an un-minuted way, meetings in a hotel, meetings over dinner, etc; so does bribery and corruption. (See the case of
Director of Fair Trading v Pioneer Concrete (UK) Ltd. The actions of a company’s employees acting in the course of their employment, amounts to carrying on of business by the company.
If such conferences are in fact “staff training” en masse, the Inland Revenue should be aware of it as such. Staff training is done during working hours. BUT CONTINUOUS PROFESSIONAL DEVELOPMENT is a professional’s own business. It is up to the professional to obtain the number of required CPD hours in order for HIS LICENCE TO BE RENEWED. The employer pays a professional a certain level of salary by dint of the fact that that person holds that licence. If the employer pays for that professional to keep that licence, then in my humble opinion, that is a perk or benefit to that employer who is already benefiting from having such a licence. If that professional cannot make his CPD hours, the job should go to someone who is competent. Does the obtaining of CPD hours include time spent shopping? How is it examined? Are people who attend conferences tested on their development? No. If they were tested on the spot on their return to work and they failed, the employer could not just boot them out. He would have to face the Employment Rights Act. So he should employ competent persons in the first place. But in the UK, we will never know the answer. In my humble opinion, as small businesses go, this is a very profitable way of gaining even more money from poor hard done by pensioners, caught by
Actuaries’ incompetence, lawyer’s high-class taste and the “taxman” as is colloquially put.
Poor pensioners! Bring on the Double Jeopardy fraud cases, please.
Delegates’ Fees [ ] 244,000.00
Less Expenses:
Hotel bedrooms including breakfast [ ] 54,780.00
Cost of conference hall hire 2,000.00 E
Delegates lunches [ ] 14,950
Dinner on 24th[ ] 18,675.00
Bus hire to and from dinner 500.00 E
Conference typing and organising [ ]Gifts for each delegate [ ] 0
5,980.00
Total Expenses of APL Conference 2005 96,880.00
NET PROFIT or EXCESS 147,120.00
EXAMPLE OF ONE CONFERENCE, its costs, excluding productive time lost by the employer.
INCOME AND EXPENDITURE ACCOUNT FOR THE CONFERENCE-
Yours sincerely, Sally Ramage, Copehale, Coppenhall, STAFFORD, ST189BW, UK.
Tel 01785-251448, 01785-251267
Comments
Hide the following 19 comments
The CHEYNEY PENSION FRAUD
05.12.2005 13:50
The firm was then passed through a series of shell companies, all owned and controlled by Sykes, who systematically emptied the pension fund account.
An estimated £1 million was removed in cash while the remainder was used to pay off underworld contacts of the group.
Sykes (45) was sentenced to six-and-a-half years after pleading guilty to conspiracy to steal. He was also told to serve 18 months of a suspended sentence and was barred from being a company director for ten years.
Simon Michael Maya (53), Altaf Sayed (38) and Ian David Selby (58) were all convicted of conspiracy to steal at an earlier trial.
Maya was jailed for seven years, Sayed was sent to prison for three-and-a-half years, and Selby received a four- and- a- half year jail sentence.
Trevor Hamilton Farrell (40) pleaded guilty to the same charge and was jailed for three years.
Two other people - Cassius Augustus Powell, aged 39, and Adrienne Gay Morris, aged 58 - were also charged with conspiracy to steal.
Powell was acquitted following a trial. The Serious Fraud Office decided not to proceed with a trial of Morris.
The court proceedings took place last year but reporting restrictions were imposed because of a pending Department of Trade and Industry case against Sykes.
That case ended yesterday when Sykes received a fouryear prison sentence related to his fraudulent trading as a "credit resistance strategist" under the business name White Knight. The sentence will run concurrently with his previous sentence.
Sentencing Sykes over the Cheney case, Judge Derek Stanley, said: "I have no doubt you played a leading role in the eventual plundering of the Cheney pension fund and thereby causing financial misery to the beneficiaries of that fund.
"It is abundantly plain that you were involved in dishonesty and deceit from the outset."
Detective Sergeant Bob Cairns, from West Midlands Police, said: "I believe the sentence is justified.
"Sykes showed a complete disregard for the pensioners of the company."
Philip Blakebrough, assistant director at the Serious Fraud Office and the senior case lawyer, said: "This was a callous and ruthlessly executed fraud designed from the start to steal the Cheney pension fund by setting up a system of puppet trustees who, instead of protecting the fund, helped to plunder it.
"Together with the West Midlands Police economic crime unit we conducted a painstaking investigation that unravelled the mechanism of the fraud.
"Sykes is a dishonest, greedy, selfish man, who is also highly manipulative."
OBSERVER1
more of this 2
05.12.2005 13:52
The rumours were rife around the workshops of CW Cheney.
Staff had heard mutterings that something was not quite right with the pension fund, and demanded a meeting with its administrator - Kevin Sykes.
Brian Smith, who had worked at the company for 44 years, was one of the employees who met Sykes.
"Sykes appeared and was very persuasive. He managed to reassure us that everything was alright."
OBSERVER1
more of this 3
05.12.2005 13:53
There were 230 members of the scheme, all due to receive lump sums ranging between £10,000 and £40,000.
A total of 43 have lost out on their lump sums forever, while the Pensions Compensation Board decides every six months whether to continue paying the monthly remittances.
Mr Smith said: "When they checked the fund there was about £100,000 left which was enough to tide them over, but not enough to pay any lump sums.
"The last person to receive a lump sum had retired in March 2000. I felt numb."
Gathering his thoughts, he set off home to tell his wife, Pam, the terrible news. He said: "I don't know if I felt angry or simply sickened and upset."
Mr Smith, now 63, joined the company when he left school at 15. He started as an apprentice electrician before eventually becoming maintenance foreman and electrical engineer.
"I worked there man and boy. It was a brilliant place to work - a family-run place and they would apprentice you and made sure you did all the proper things." He joined the pension scheme as soon as he could when he reached 21.
During his employment Mr Smith paid four-and-a-half per cent of his income into the salary scheme.
In later years he doubled his contributions from £44 a month to £88 to help pay for his early retirement because of health problems.
Under his pension scheme he had an option to receive a £25,000 tax-free lump sum.
" I was thinking about maybe buying a new car, but the main thing was coming to live out in Warwickshire.
"We were living in Great Barr and our daughter, her husband and the grandchildren and my mother all lived out here."
But when the pension fund did not pay out, his plans faced disaster.
"Luckily my mother and son-in-law were able to help us, otherwise we would never have been able to afford to live out here."
Mrs Smith said: "When he came home and told me, I was devastated. You make your plans and then they come to nothing."
Mr Smith said: "What hurts is that you have worked so bloody hard for it. All we want is what should be justly ours.
"That is the pot at the end of the rainbow. Twenty-five thousand pounds is not an enormous amount, but it is yours to do what the hell you like with.
"For someone to run off with it is terrible. We were told this could not happen after the Robert Maxwell pension scandal, but that's been shown to be wrong."
Mr Smith said: "Sykes is a complete and utter scumbag. It's hard to imagine what he's done to people's lives.
"It is worse than a conman really, because a conman relies on the victim's greed to trick them.
All we did was pay into our pension scheme so we had some money in our old age. Now we have nothing."
OBSERVER1
more of this 4
05.12.2005 13:56
Pensions watchdog failed to stop theft of £2.7m
By Antonia Senior
THE chief pensions watchdog was given warning that a fraudster was planning a raid on a pension scheme, but failed to take any effective action until he had stolen almost £2.7 million from 200 pensioners in Birmingham, it emerged yesterday.
Four men and one woman were found guilty last year of conspiring to steal the funds of the £2.9 million Cheney pension fund. The restrictions on reporting the case were lifted last week after one of the convicted men, Kevin Sykes, was also sentenced to four years for his activities as a “white knight” business consultant
PRIVATE INVESTIGATOR
more on this
05.12.2005 13:58
Amid a series of failures by Opra, the former pensions watchdog, the fraudsters were able to take control of the fund and plunder pensioners’ cash. Despite concerns in separate parts of Opra about the Cheney Pension Fund from September 1999, the case was not logged on a communal database of “interesting” cases until September 2000. Still officials failed to act.
The inquiry, led by Sir Gerald Hosker, QC, found that the pension scheme was “haemorrhaging” money in September and October 2000, as a man named as the “key individual” stripped the fund. This “key individual”, believed to be Sykes, even settled his account at a bookmakers with £55,000 from the pension-fund accounts at the beginning of October 2000.
The fraud came to light only when Opra officials visited the Cheney premises in October over a missing £25,000, and discovered that the company accountant did not know who the pension scheme trustees were. By the time that Opra moved in to take control of the fund, the pension fund had been reduced from £2.9 million to less than £200,000. The Serious Fraud Office is yet to recover most of the assets.
Opra was abolished in 2000, and replaced by the Pensions Regulator. The move came amid concerns that Opra was excessively reactive and was prevented by its rules from tackling fraud and pension scheme underfunding. It was set up in the wake of the multibillion raid on the Mirror Group pensions funds by Robert Maxwell.
A spokesman for the DWP said: “The Pensions Regulator is much better able to proactively intervene in situations quickly where it believes there is cause to do so.”
observer1
global problm
05.12.2005 14:02
That a man only two days away from suicide would be considering hiring a bodyguard defies belief. But neither the Times nor any other media outlet has raised the possibility that Baxter felt his life to be in danger because of what he knew and could divulge about the internal affairs of Enron. Men have been killed for much less.
Baxter was named in a memorandum submitted by Enron Vice President Sheron Watkins last August to Chairman and CEO Kenneth Lay. Watkins warned Lay that dubious off-the-books transactions with private partnerships set up by top Enron officials might cause the company to ?collapse in a welter of accounting scandals.? She cited Baxter?s opposition to one of these partnerships, set up by then-CEO Jeffrey Skilling, writing, ?Cliff Baxter complained mightily to Skilling and all who would listen about the inappropriateness of our transactions with LJM.?
Baxter received a subpoena from the Senate Government Affairs Subcommittee on Permanent Oversight and Investigation, along with 48 other people linked to Enron and Andersen. Investigators from the House Energy and Commerce Committee had told Baxter?s lawyer that they wished to interview him, but had not yet issued a subpoena.
Representative James C. Greenwood, Republican of Pennsylvania and chairman of the committee?s Oversight and Investigations Subcommittee, said, ?It seemed to us that he was a pretty highly placed insider at Enron who had understood exactly what was wrong there.?
Both Enron and its accountant and business adviser, Andersen, have been engaged in massive, illegal shredding of documents and deletion of computer files. Billions of dollars are at stake in the collapse. The highest levels of the Bush administration are implicated in the corruption of the financial and political system that Enron exemplified.
Under such conditions, the sudden death of a crucial witness inevitably raises the suspicion that it is not just pieces of paper and computer data that are being destroyed to protect the corporate and political gangsters at the top, but human lives as well.
Given the organized shredding operation, a systematic effort to destroy incriminating documents, Baxter?s evidence would be all the more critical, since he could testify, from the perspective of the highest levels of the company, what information Enron and Andersen were so afraid of. How can one not assume that Baxter, too, was ?shredded? to prevent him from taking the witness stand?
A potential whistle-blower dies less than two weeks after his name first comes to public attention. What message does that send to others who might be considering testifying against Enron? And on top of that, the local police immediately declare his death a suicide. If there was foul play, those responsible have carried it out with impunity.
It is, of course, possible that Baxter actually took his own life. But no confidence can be placed in such a finding without a thorough investigation, and no such investigation can be expected from the local authorities in Houston, a metropolitan area where Enron was by far the most influential corporate power. (As one indication of its dominance, all the federal prosecutors in the US Attorney?s office in Houston have had to recuse themselves from the Enron investigation because of financial or family ties to Enron.)
The circumstances of Baxter?s life cast doubt on the verdict of suicide. He is not known to have been suffering from depression or any other mental health problem. He was a multimillionaire, having netted $30 million from the sale of his stock in the company before and after his departure from Enron last May. His family life was apparently happy, and he leaves a wife and two children, a 16-year-old son and 11-year-old daughter.
Far from being the target of media vilification, Baxter?s name had been linked to the Enron affair in a way that was largely favorable. His first appearance in the coverage of Enron came when the Watkins memo was made public, presenting him as an opponent of corporate fraud.
Friends and business associates interviewed by the press expressed shock and surprise at his reported suicide, although there were conflicting accounts of his state of mind after the bankruptcy of Enron.
An executive of Portland Gas & Electric, a subsidiary which Enron acquired in a takeover organized by Baxter, told the New York Times: ?My impression of Cliff Baxter was that this was an enormously confident guy who came up here to get the thing done, and he did. The image I had of him at the time is totally at odds with the tragedy today. I mean, he was self assured, he was very friendly. This was practically the last person in the world you?d ever expect to commit suicide.?
observer2
more on this
05.12.2005 14:09
OBSERVER7
So..........S L O W ..........................Regulator.
05.12.2005 14:12
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scheme were estimated at £8,225. In 2001, Mr Watson requested a cheque from Scottish Provident to meet these costs. On receiving a cheque from Scottish Provident for £8,225, Mr Watson failed to pay this into the trustees’ bank account of the final salary scheme. He instead paid the cheque into the main bank account of Watson’s Bakeries Ltd. On 4 June 2004 at Batley and Dewsbury Magistrates Court, Mr Watson had pleaded guilty to a charge of dishonestly retaining a wrongful credit of £8,225 and had been committed to Leeds Crown Court for sentencing. On 19 July 2004, Mr Watson had pleaded guilty to seven counts of fraudulently evading payment of employee contributions to the provider of the company’s group personal pension scheme. Today at Leeds Crown Court, Mr Watson received a conditional discharge for two years, and Opra was awarded £5,000 costs. Watson’s Bakeries Ltd was established in 1942 and was based in Liversedge, West Yorkshire. In 1989, Mr David Frederick Watson was appointed the managing director. 2. The criminal offence of fraudulent evasion is committed where there is fraudulent evasion of the employer’s requirement to pay pension contributions deducted from employees’ earnings to the pension provider. 3. Employers must ensure that employee contributions are collected and sent to the scheme provider administering the scheme by the 19thday of the month immediately following the month of deduction. 2
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4. This is the first case where the Opra has prosecuted for an offence not within the Pensions Act 1995. The offences that were committed were breaches of Section 111A (12) of the Pensions Scheme Act 1993 and Section 24A of the Theft Act 1968.5. Opra is an independent statutory body. Its primary role is to look into breaches of the Pensions Act 1995 and related legislation. 6. Opra has the power to investigate schemes considered to be at risk, and can prohibit or disqualify trustees and impose fines on wrongdoers. In addition, it has the power to collaborate with other regulators in providing information where that information would enable the regulator to carry out its duties. For further information: • Serena Mitchell, Opra 01273 627205 (direct line)• Nick Edmans, Opra 01273 627648 (direct line)•
OBSERVER10-
MORE OF THE SAME....???
07.08.2006 22:06
JOHN DOE
MORE OF THE SAME....???
07.08.2006 22:06
JOHN DOE
MORE OF THE SAME....???
07.08.2006 22:06
JOHN DOE
MORE !
07.08.2006 22:07
With the passage of time and to an extent, the practical implications of Bowman v Fels [2005] EWCA Civ 226, some firms may have been lulled into a false sense of security about the practical impact of the regime. Jail sentences imposed on two solicitors within the space of a week have brought minds sharply back into focus on anti-money laundering compliance.
The latest UK Threat Assessment 2006-07 published by the Serious Organised Crime Agency on 31 July 2006 emphasises the threat from serious organised criminals involved in non-fiscal fraud who make use of corrupt or negligent professionals and collusive insiders, including solicitors, accountants, and financial advisers. The report says that a picture is emerging of a sophisticated fraud 'infrastructure', made up of numerous specialists and niche service providers.
Brian Dougan, a solicitor from Northern Ireland , was jailed for three months at Liverpool Crown Court for converting or transferring the proceeds of criminal conduct. He was found to have allowed £66,000 to pass through his client account while carrying out conveyancing work for a convicted criminal.
This follows hard on the heels of another conveyancing solicitor Phillip Griffiths being jailed for 15 months for failing to make a disclosure to the authorities, knowing or suspecting money laundering offences were taking place.
Many firms ‘ticked the box' on compliance two years ago when the Money Laundering Regulations 2003 came into force, requiring systems, identification, record keeping and training. Yet many have done little to update them since then and many have also become complacent, as the two convictions suggest.
When POCA first came into force, the tension between the money laundering reporting obligations and duties of confidentiality and client privilege caused many practical difficulties for solicitors. This resulted in the Law Society's intervention in the case of Bowman v Fels . Following that, the Law Societ y r evised its guidance to emphasise the importance of client privilege.
In some ways Bowman complicated the issue of lawyers' reporting obligations by forcing solicitors to give careful consideration in each case to whether privilege does in fact apply, whereas in the past the ‘safe' option appeared to be to report. Nonetheless, this is a complex and developing area of law and important decisions in other areas of practice may impact on compliance, for example the decision in The Accident Group case Winterthur Swiss Insurance Company & Anor v AG (Manchester) Ltd & Ors [2006] EWHC 839 (Comm) (12 April 2006).
Misunderstandings on the part of many lawyers as to the limits on client privilege could potentially fuel an attitude of complacency. Solicitors must not assume that privilege applies in almost every case. Now more than ever, it is important for solicitors to keep up-to-date with compliance and re-assess their procedures and exposure to risk.
There have been important changes to the regime over the past year that should be reflected in firms' anti-money laundering compliance. These changes include several amendments to the Proceeds of Crime Act including the overseas crime exemption, three further sets of Law Society guidance, the Third European Directive, new guidance from the Joint Money Laundering Steering Group, SOCA taking over from NCIS and web-based reporting.
These cases will remind the entire profession of the need to update and review their procedures and training, and of the crucial importance of the due diligence exercise on client engagement.
JOHN DOE
it never stops..
07.08.2006 22:14
Patrick Carmody, who joined Willkie Farr in 1990 and became a partner in 1998, resigned from the firm in April 2003 after his misconduct was discovered by another partner.
The Appellate Division, First Department, enforced the one-year suspension on Carmody last Thursday (27 July) following recommendations from a four-lawyer hearing panel and referee Donald Zolin who heard the case.
Carmody admitted to having made about 129 hours of personal long distance telephone calls to Ireland and the UK over two years and billing the calls to several clients. He attributed his actions to stress resulting from personal matters.
The clients billed for the calls included Swiss Re Capital, Credit Suisse and WR Berkley Corp. All were reimbursed.
Zolin, who had recommended only a six-month suspension, determined that Carmody’s actions were not driven by financial gain but to mask the amount of time spent on personal matters.
J.DOE
doh
07.08.2006 22:23
Most budding legal eagles have a grasp of what they can possibly get away with within the bounds of the law. But when law student Andrew Curzon received a cheque for more than £100,000 that had been sent to his address by mistake, he did not bank on being caught trying to deposit the money in his own account. Curzon, 19, of Lingfield Road, Wimbledon, wrongly received a Bank of Scotland cheque for £117,533 in the post. It was made out to his elderly neighbour as a payment from a pension fund that had matured. But instead of returning it to its rightful owner, the teenager wrote his name over the pensioner's, went into the Wimbledon Village branch of NatWest and asked staff to put the sum in his bank account.
DOE
HMMM
07.08.2006 22:24
A solicitor who played the organ in his local church was jailed for three months on money laundering charges today. Brian Dougan, 49, of Northern Ireland, allowed £66,000 to pass through his client account while carrying out conveyancing work for a convicted criminal. Dougan, who has been asked to stand down from his position as a church elder, did not initially realise the cash came from a criminal source, but continued with the work even when he became suspicious..."Sir Stephen Lander told the Law Society Gazette that a "bent solicitor" was a "heaven-sent opportunity" for money launderers. "There are not a lot of dodgy lawyers in percentage terms, but a significant number are struck off for dishonesty. A bent solicitor is a very important asset to a criminal gang – the client account is a heaven-sent opportunity for money launderers to turn cash into legitimate assets," he said."
JD
IN DORSET
07.08.2006 22:25
A SHAMED solicitor who created a fantasy client to fund his luxury lifestyle has been stripped of £426,414 of his assets. Silver-haired Ian Macfarlane, 46, who has been struck off the solicitors' register, used his ill-gotten gains to pay for exotic holidays, school fees for his two children, property investments and his own tax bill. Currently serving a three year and nine month jail sentence, Macfarlane admitted 26 theft offences and asked for a further 137 similar charges to be taken into consideration, involving over £800,000.
JOHN D
SHROPSHIRE,UK
07.08.2006 22:26
A Shrewsbury solicitor has been jailed for 15 months for money laundering after he carried out legal work on the purchase of a house from two drug dealers. Phillip John Griffiths, of Emstrey Lodge, was convicted of turning a blind eye to the purchase of a house in Birmingham by estate agent Leslie Dennis Pattison for £43,000 — a third of the property’s value. A jury at Warwick Crown Court yesterday convicted the 44-year-old solicitor of entering into or becoming involved in a money laundering arrangement. Correction 21 June 2006:Solicitor jailing
"We have been asked to point out that Shrewsbury solicitor Phillip John Griffiths was cleared of entering into or becoming involved in a money laundering arrangement during a recent court case. The 44-year-old, of Emstrey Lodge, was convicted of failing to make a ‘required disclosure’ to the authorities about a house sale when, as a solicitor, he knew or suspected or had reasonable grounds for knowing or suspecting money laundering was taking place. He was jailed for 15 months by Judge Marten Coates following a two-week trial at Warwick Crown Court."
J DOE
in 2006..
07.08.2006 22:29
A Solicitor was jailed yesterday for stealing £140,000 from his clients to fund a failing second business. Richard Dawson, 54, put clients of Dawson's Solicitors in "financial hardship" while he poured their money into his new business.
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Town lawyer is struck off
A dishonest Shrewsbury solicitor who pocketed nearly £10,000 of a client’s cash entrusted to him for a house purchase has been struck off. Stephen Morecroft, of Battlefield Road, also forged vendors’ signatures on documents and tried to trick a hospital into handing over confidential records
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Solicitor who stole £1.3m gets 7 years jail
A greedy solicitor who stole nearly £1.3 million from clients' accounts to live a life of luxury was today jailed for seven years. Timothy Miles, 45, a former chairman of his local Round Table, paid off the mortgage on the family home in Uxbridge and then bought himself a luxury flat in Gerrards Cross which he furnished opulently when his marriage broke up. He also bought a Jaguar car. He admitted 13 charges of theft and one of forgery of two wills over a four year period until a routine audit while he was on holiday led to his arrest. Miles, a salaried partner in the Uxbridge firm of Bird and Lovibond which he joined in 1994, earning up to £60,000 a year, dealt with conveyancing, wills and probate, said counsel.
JANE DOE
AND THE YEAR IS NOT YET OVER
07.08.2006 22:32
A solicitor from County Armagh has pleaded guilty to involvement in money laundering at a Liverpool Court. Brian Dougan, 48, from Brootally Road, Milford, admitted using his firm's business account to handle money from a red diesel money laundering scam. 23 May 2006
Solicitor struck off for £350,000 mortgage fraud
A Flitwick solicitor who dishonestly misappropriated more than £350,000 of clients' money to help a crooked property dealer was thrown out of the profession on Tuesday. Linda Collier, 45, of Glebe Avenue, handed over an initial £141,850 entrusted to her by a mortgage company to a businessman who claimed he needed the funds to finance a string of home deals. The client, referred to as Mr B, promised he would pay back the money on Collier's return from a holiday to Luton law firm Churchman Thacker, where she was a partner. 06 May 2006
Solicitor is guilty of misconduct
A DITHERING solicitor who allowed a house to fall into ruin has been found guilty of professional misconduct. The Scottish Solicitors' Discipline Tribunal heard William Rennie, 53, of Kilmarnock, was asked to deal with the estate of a couple who died just weeks apart, without leaving wills. Glasgow Evening Times 27 Apr 2006
Misconduct solicitor struck off
A Newton Stewart solicitor has been struck off after being found guilty of 15 counts of professional misconduct. Nicholas McCormick, 47, who traded out of offices at 28 Victoria Street, was found guilty by a Law Society discipline tribunal. It found that he had breached a catalogue of rules and ignored complaints made against him by clients. BBC 27Apr 2006
Clerk used client's cash
A CROOKED solicitors clerk from Banbury paid off £4,000 of customers' debt with cash taken from other clients, a misconduct hearing was told. Elizabeth Gough pretended she had recovered the money owed to the clients in court judgements when in fact she had simply taken it from another account. In one case Gough paid out £1,886 and in another £2,000 was sent to trusting clients using others customer's money, the Solicitors' Disciplinary Tribunal heard. Bosses at Blake Lapthorn Linnell, in Westway, Oxford, put her on extended leave in January 2004 to investigate the cases when they discovered there was a problem. This is Oxfordshire 21 Apr 2006
Tribunal upholds FSA case against solicitor
The Financial Services and Markets Tribunal has upheld a Financial Services Authority (FSA) case against Allen Phillip Elliott after finding that he is not fit and proper to work in any part of the UK's regulated financial services industry. The Tribunal stated that Mr Elliott's history shows that "he is not able and willing to comply with requirements placed on him by professional rules and obligations" and that he was not open and honest in his dealings with regulators. The Tribunal found that Mr Elliott "poses a risk to the protection of consumers and a risk to the reputation of the market" and it concluded that a Prohibition Order was necessary "in order to protect consumers from risk and … to maintain market confidence." Mr Elliott is not authorised by the FSA, but he operates an unregulated mortgage investment scheme through his company FMD Trustees Plc. He obtains client referrals and introductions from authorised financial advisers who may be unaware of his history. (Follow link, right, for full text) Financial Services Authority 05 Apr 2006
Solicitor struck off
A solicitor who stole money from the dead and disabled has been kicked out of the legal profession. Nicholas Pounder, 47, plundered the estates of dead clients to pay off a car loan and went on a luxury holiday to Spain on money belonging to a disabled man. The solicitors' disciplinary tribunal in London heard how Pounder, a former partner in David and Snape, Wyndham Street, Bridgend, stole more than £168,000 over six years, creating bogus letters to cover his tracks. IC Wales 16 Mar 2006
Norfolk solicitor suspended
A Norfolk solicitor who agreed to falsify a lie detector test in order to help a client blow the lid on a steamy love affair was yesterday suspended for two years. Trevor Beckford, 53, of Hall Road, Thurton, near Loddon, was found guilty at a Solicitors Disciplinary Tribunal hearing in London of involvement in the bizarre scheme to expose a love cheat, and was warned that any further misconduct would result in him being struck off. (Solicitors also fail lie detector tests. UJ) Eastern Daily Press 15 Mar 2006
Former solicitor jailed for theft
A former Anglesey solicitor who stole £143,000 from clients has been jailed for two-and-a-half years. Stephen Puleston Williams, 50, from Holyhead, stole the money from clients over a three-year period. He admitted theft and forgery at Chester Crown Court before being sentenced on Tuesday. BBC 28 Feb 2006
Solicitor who smuggled drugs into Barlinnie named
A solicitor who admitted smuggling drugs into Glasgow's Barlinnie prison can now be named. It follows a successful legal challenge by lawyers from media companies including Scottish Television to a High Court ruling that Angela Baillie's name should be kept out of the press. She is now facing a lengthy prison sentence after pleading guilty. Scottish TV 07 Feb 2006
Lawyer supplied drugs to prisoner
A solicitor has admitted supplying drugs to a Barlinnie Prison inmate. Heroin and diazepam with a street value of more than £1,600 were handed over in a cigarette packet which had been opened and resealed, the court heard. BBC 06 Feb 2006
Top lawyer killed wife in vicious knife attack
A partner at one of Britain’s biggest law firms stabbed his wife to death in a "ferocious" attack just days after she told him she was having an affair, a court heard today. Christopher Lumsden, 52, used a kitchen knife to stab his wife Alison in the neck, face and back as she sat at a dressing table in the bedroom of their home near Altrincham, Cheshire, on the evening of March 16 last year. Times Online 06 Feb 2006
DISHONEST SOLICITOR STRUCK OFF
A DISGRACED solicitor has been struck off after borrowing tens of thousands of pounds from dead clients' estates. A Law Society disciplinary tribunal found Adrian Gerard Donkin, a trusted solicitor for 30 years, had acted dishonestly by misusing money in customers' accounts, as loans for himself.
Donkin, whose three-and-a-quarter acre home in Boldon Lane, Cleadon, is up for sale for £950,000, was also slammed for taking a £25,000 personal loan from a grieving woman too upset to accept inheritance money after the death of her brother. Sunderland Today 28 Jan 2006
You'll be jailed for theft from clients
A DISGRACED solicitor who plundered more than £143,000 from clients was yesterday warned he faced jail. Stephen Pulston Williams, of Holborn Road, Holyhead, admitted four charges of theft, three of false accounting, and one forgery charge. The 50-year-old was the senior partner in the longstanding law firm of Prothero Williams with offices in Valley, Holyhead and Bangor. He was struck off in 2002, after he admitted using clients' cash for his own use, leaving a £172,000 black hole. The firm, closed down by a legal watchdog, was later taken over. IC North Wales 25 Jan 2006
Solicitor barred
A solicitor who used his clients’ money when he ran his business from a hut in his garden at Harlow, Essex, was struck off by the Solicitors Disciplinary Tribunal. Michael Blow, 55, had a £546,000 “black hole” in his accounts. Some of the money will have to be found by the solicitors’ insurance fund. Times Online 02 Dec 2005
Crooked lawyers ordered to pay up
A SOLICITOR and his law firm must pay £360,000 to 63 investors involved in a boiler room scam the Court of Appeal ruled today. John Martin and Adrian Sam & Co ("ASC"), the former London-based law firm at which Martin was a partner, were found guilty in December 2004 of being involved in an illegal overseas investment firm's 'boiler room' activities in the UK. This is Money
Financial Services Authority 26 Nov 2005
Lawyer jailed for stealing 6 mln stg from clients
LONDON (Reuters) - A solicitor was jailed for eight years on Thursday for stealing over 6 million pounds from his clients. Michael Fielding, 59, used his position as a partner at law firm Lawrence Graham to fraudulently sign off requests for scores of payments over a 3-year period. "At present, 140 unauthorised withdrawals totalling 6.5 million pounds have been identified," police said after Fielding was sentenced at Southwark Crown Court.
JD