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Law Society of Scotland ‘deliberately failed’ to report mortgage fraud solicitor to Crown Office as cosy Tribunal deal allows lawyer to escape justice

17 Apr

copfs & LssWill Crown Office act after Law Society & SSDT covered up mortgage fraud case solicitor ? THE CREDIBILITY of the Law Society of Scotland’s self-regulation of solicitors along with poor disciplinary procedures and cosy, secret deals in the murky world of lawyers regulating their own colleagues has yet again been brought into question after it took revelations in a Scottish newspaper of a solicitor involved in a criminal deception of a mortgage fraud to bring the case to the attention of Scotland’s Crown Office & Procurator Fiscal Service (COPFS) for an investigation.

The actions of the solicitor, who falsely overstated his income to obtain a mortgage, have in previous circumstances, led to ordinary members of the public being brought before the courts and given stiff penalties for exactly the same kinds of criminal offences.

It was reported in the Sunday Mail newspaper earlier this month that former Dickson Minto solicitor Alistair Cowan (37) was ‘prosecuted’ before the Scottish Solicitors Discipline Tribunal (SSDT) late last year after a complaint was made to the SSDT by the Law Society of Scotland relating to a case involving MORTGAGE FRAUD. Mr Cowan was accused of inflating details of his his annual salary as a solicitor employed at Dickson Minto to obtain a higher mortgage from the Halifax PLC. The solicitor went onto use the loan from the Halifax to purchase a £445K flat in Edinburgh’s New Town, however Cowan, now with HBJ Gateley only suffered a ‘slap on the wrist’ with a three years supervisory work order after a Law Society investigation which led to him being found guilty of professional misconduct by the tribunal late last year.

Even though the solicitor’s actions clearly amounted to offences considered criminal in law, no report of the case or of Mr Cowan’s conduct was ever made by either the Law Society of Scotland or the Discipline Tribunal to the Police or Scotland’s prosecution service, the Crown Office, raising more questions over why the dark world of self regulation of Scottish solicitors, administered by the Law Society of Scotland & Scottish Solicitors Discipline Tribunal appear to consistently avoid any reporting of offences of a criminal nature committed by solicitors to Scotland’s prosecuting authorities.

Some have now also questioned by, even with the Law Society of Scotland being represented at the tribunal hearing by its ‘Fiscal’, part-time Sheriff Paul Reid who is also a solicitor in private practice of Glasgow Law Firm Fleming & Reid, and receives a daily fee paid out of public finds of around £583 for each day of service in court.

Sheriff Reid, who recently featured in a Scottish Law Reporter investigation which reported on his role as a solicitor in defending Scots QC Desmond Cheyne from claims of unpaid building work debts, is known to have a record of stiff sentencing of members of the public in all manner of criminal trials, however no report of the case involving the mortgage fraudster solicitor managed to filter through to the Crown Office from anyone connected with the SSDT hearings including the Sheriff himself. This was confirmed when Crown Office admitted to the newspaper they had no record of the case.

Asked by Diary of Injustice for a statement in the light of media coverage of the SSDT case and the apparent mortgage fraud, a spokesperson for the Crown Office said : “Following media reporting the Crown was made aware of the allegations against this individual. As the matter is now under consideration it would not be appropriate to speculate on the possibility of any future proceedings.”

The full report of the SSDT decision can be read online here : Council of the Law Society of Scotland v Alistair Lindsay Cowan

It is unclear what level of guidance if any exists from the Judiciary of Scotland for their members (judges & sheriffs) who appear in what are effectively closed door ‘private prosecutions’ brought by the Law Society of Scotland before the Scottish Solicitors Discipline Tribunal. However if a member of the Judiciary of Scotland has knowledge of a criminal offence, certainly it would be expected of them to report the matter to the appropriate authorities, something which did not occur in this case.

BACKGROUND : CROWN OFFICE ON MORTGAGE FRAUD :

In at least two previous instances this year, Scotland’s Crown Office released statements to the media relating to similar cases where individuals had lied about their income to obtain mortgages, resulting in confiscation orders being made by the courts :

£35,000 Confiscated from Mortgage Fraudster

At Kirkcaldy Sheriff Court on 28 February 2012, a Confiscation Order for £35,000 was made against Anzelika Trifonova (DOB 01/02/1980 or 01/12/1980). Trifonova, a Latvian national living in Rosyth, had previously pled guilty to a common law mortgage fraud. She was sentenced to 250 hours community service. Trifonova was found to have made £86,000 from the mortgage fraud.

Lindsey Miller, Head of the Serious and Organised Crime Division (SOCD) and the current POCA champion, said : “Anzelika Trifonova lied about having a job in order to gain a mortgage worth £85,500, and in doing so, made a significant amount of money from crime. The Crown takes mortgage fraud extremely seriously, and will seek to recover any money made in this way using its powers under Proceeds of Crime legislation. Ms Trifonova is the latest in a long line of criminals who have discovered that they will be forced to pay back the money they make through crime. This should act as a warning to others considering committing crime. The money recovered from Ms Trifonova will now be added to the millions of pounds taken from criminals via the Proceeds of Crime Act, and will be reinvested in activities for young people through the CashBack for Communities programme.”

£75,000 Confiscated from Edward Lyons

At Glasgow Sheriff Court on 1 february 2012, a Confiscation Order for £75,000 was made against Edward Lyons (DOB 14-02-1958). Lyons, from Glasgow, had previously pleaded guilty to two mortgage frauds and transferring criminal property. He was sentenced to 300 hours community service. The mortgage frauds were committed when the accused obtained two mortgage loans by falsely claiming that he was self-employed and in receipt of a salary well in excess of his actual earnings. The transfer of criminal property took place when he used money gained through the mortgage fraud to give a £30,000 gift to his daughter Ashley Lyons.

Lindsey Miller, Head of the Serious and Organised Crime Division (SOCD) and the current POCA champion, said : “Edward Lyons committed two mortgage frauds and transferred criminal property, both of which are serious offences in themselves.Transferring criminal property is classed as a “lifestyle offence” under the Proceeds of Crime Act – allowing the Crown to investigate his income over the six years preceding his arrest. The court found that £148,793.71 of his income during this time could not be accounted for legitimately. We are satisfied that the £75,000 confiscation order represents the amount of money available to us from Lyons at this time. We can also apply to the court to vary the amount of the order should further funds become available, and we intend to make full use of this power. Mortgage fraud and the subsequent laundering of the associated free proceeds is often seen by criminals as an easy way to make money. This case should act as a reminder that the Proceeds of Crime legislation is wide-ranging and by committing lifestyle offences under POCA, criminals throw open their entire financial dealings over six years to detailed investigation by forensic accountants, lawyers, and ultimately the court.”

The Crown Office have previously said in cases involving confiscation orders served as a result of a conviction for mortgage fraud :

A Confiscation Order is an order made by the court following criminal conviction, to pay a fixed sum of money from the proceeds of crime. An application for confiscation is one of the tools at the disposal of the Crown under the Proceeds of Crime Act 2002 and Proceeds of Crime (Scotland) Act 1995. The Serious and Organised Crime Division works together with colleagues at the Civil Recovery Unit, and other law enforcement agencies, such as the Scottish Drugs Enforcement Agency, UK Police Forces, HM Revenue and Customs and Department for Work & Pensions (DWP) to identify and recover the proceeds of crime.

Proceeds of Crime legislation is also used by the Civil Recovery Unit acting on behalf of Scottish Ministers. The Civil Recovery Unit investigates and recovers the property realised through criminal activity of individuals, in the civil courts without the need for criminal conviction. Money recovered under the Proceeds of Crime Act is invested by Scottish Ministers in community projects aimed at alleviating the effects of crime. To date, more than £60 million has been invested in a range of activities for young people through the CashBack programme.

Commenting on comparisons of case of the solicitor who was found guilty at the SSDT, and those made public by the Crown Office, a Scottish Government Justice Department insider told Diary of Injustice : “It would be reasonable for the public to expect the exact same application of the law to any solicitor who has also engaged in a mortgage fraud.”

Asked if a proceeds of crime confiscation order should be applied in any cases of mortgage fraud no matter the profession of the individual charged with committing the offences, the Justice Department insider replied “Yes”.

The Sunday Mail reports :

Lawyer dodges con rap Sunday Mail April 1 2012Lawyer who lied to get a bigger mortgage avoids prosecution

Apr 1 2012 By Russell Findlay, Sunday Mail

A PROPERTY lawyer who lied about his income to get a ­mortgage has avoided ­prosecution for fraud. Alastair Cowan, 37, told the Halifax he earned £130,000 when he made £80,000 at ­Dickson Minto in Edinburgh. Cowan made the claim in a letter signed by an unnamed partner in the firm. He used the loan to buy a £445,000 flat in Edinburgh’s New Town.

Dickson Minto discovered the scam during a probe into another employee but Cowan left the company as a result. They reported him to the Law Society of Scotland, who sent the case to the Scottish ­Solicitors’ Discipline Tribunal. Cowan admitted professional misconduct and the SSDT ordered him to work under supervision for three years with his new firm HBJ Gateley.

In 2010, crime clan boss Eddie Lyons was given 300 hours’ community service after admitting two mortgage frauds. The Crown Office said they had no record of Cowan’s case. Neither Dickson Minto nor Cowan returned our calls.

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