Scots lawyer fined £2500 for acting in ‘back-to-back’ property transactions

Conveyancing solicitor James McCusker was fined £2,500 by the Scottish Solicitors’ Discipline Tribunal (SSDT) after he was found to have played an “integral part” in the “illegal transactions”.

The tribunal heard that the 58-year-old solicitor was a partner and cashroom partner with McCusker Cochrane & Gunn Solicitors at the time of the transactions.

An inspection of the respondent’s financial records, books, accounts and documentation by the Law Society’s financial compliance department identified matters of “serious concern,” including his involvement in the conveyancing transactions, where issues were raised regarding the Solicitors (Scotland) Accounts Rules and the Money Laundering Regulations.

The tribunal was told that in August 2010 the respondent attended a meeting arranged by a Mr A at a hotel in Motherwell, which was also attended by two other solicitors, James Craig of Archibald Sharp Solicitors and Christopher Tulips of Strefford Tulips.

At the meeting Mr A outlined the instructions which would be given to the respondent and the two other firms of solicitors in respect of a series of “back-to-back” conveyancing transactions.

In dealing with the transactions, the respondent failed to carry out proper due diligence and verification in relation to identity of his clients and the third parties who provided the purchase price, the tribunal found.

Further, the respondent failed to comply with the provisions of the Money Laundering Regulations and part 7 of the Proceeds of Crime Act 2002.

The tribunal concluded that Mr McCusker knew or ought to have known that the whole circumstances and his instructions indicated a “potential revolving deposit scheme” and “potential mortgage fraud”.

In mitigation, the tribunal heard that the respondent was “ashamed and mortified” by what had happened, and that he regretted absolutely his involvement in the series of transactions.

He admitted that he had been “naïve” in his involvement in the matter and accepted that “alarm bells should have been ringing,” but insisted he was “not guilty of any conscious wrong-doing”.

However, having considered the submissions from both parties, the tribunal had “no hesitation” in finding the respondent guilty of professional misconduct.

The SSDT ruled that his conduct fell “far below the standard to be expected of a competent, reputable and careful solicitor” acting on behalf of a purchasing and selling client in a conveyancing transaction.

In a written decision, SSDT vice chairman Kenneth Paterson said: “The tribunal firstly considered whether or not the respondent’s conduct was serious and reprehensible enough to amount to professional misconduct. The tribunal was of the view that given the meeting which took place at the hotel and the terms of the email sent by Mr A, the respondent should have spotted that there was something obviously suspicious about the nature of the transactions involved.

“The tribunal consider that the respondent who is an experienced conveyancer should have been alert and realised that questions required to be asked. The issue of money laundering and possible mortgage fraud were highlighted in the Law Society Journal at that time. The tribunal had no hesitation in making a finding of professional misconduct.”

The other two solicitors involved, Mr Craig and Mr Tulips, had both already been dealt with by the tribunal in respect of the same transactions, with each being censured and fined £2,500, and the tribunal considered that the appropriate course of action would be to impose a similar sanction in this case.

Mr Paterson added: “The tribunal consider it important that a message is sent out to both the profession and the public that it is not appropriate for solicitors to deal with transactions such as this in such a reckless way.”