Solicitor fraud tops u20m

THE VALUE of serious fraud cases involving solicitors has rocketed in the first six months of this year to at least u20 million, despite an apparent fall-off last year.

The total value of solicitor-related serious fraud by the end of this year could match that of the highest-recorded fraud value in 1992, when it topped u40 million.

The figures, compiled by accountants KPMG Peat Marwick, reflect the rise in compensation fund claims, which have shot up by 40 per cent so far this year (The Lawyer 31 May 1994).

The soaring values in solicitor fraud charges are part of the wider trend, says KPMG.

It says that although earlier predictions expected a levelling off in the total value of fraud charges this year, the total value of all serious frauds in the first six months alone – at u254.2 million – has already exceeded most years.

Of that sum, u94.185 million stems from solicitor-related frauds, either awaiting trial or resulting in conviction, according to the firm.

Mortgage fraud (u43.5 million) and pension fraud (u26.7 million) are the biggest solicitor-related fraud areas.

Total values for solicitor fraud cases awaiting trial or resulting in conviction show a steep average growth since 1988. Then, three cases totalled u500,000. In 1989 four cases totalled u9.7 million; in 1990 that rose to seven cases totalling u12.5 million. It slipped to three cases totalling u7.5 million in 1991, leaping to u40 million involving 15 cases in 1992. Seven cases in 1993 amounted to only u2.6 million.

The 1994 figures so far result from two cases. One involves alleged advance fee fraud against the Belling Pension Fund. Solicitor Charles Deacon of CJ Deacon & Co and another defendant are charged by the Serious Fraud Office (SFO) with deception and conspiracy to defraud. A hearing date is yet to be set.

The SFO says it is currently investigating five law firms. The Durnford Ford case involving solicitors Digby Bew and Graham Ford, charged with theft and false accounting, is listed for 3 January 1995.

Ian Huntington, head of KPMG's fraud investigation unit, says: “We have had the bulk of the big mortgage frauds come through, most of the collapses of solicitors' firms have taken place, and charges made.”

The total value and number of solicitor-related frauds may level off, but big cases could still be revealed, he warns.

KPMG research shows sentences for solicitors typically ranging from one to seven years. The heaviest was 10 years for Scottish solicitor John McCabe for property frauds totalling u4 million.