Wednesday, September 30, 2015

The struck off solicitor, and the MP who ‘took advantage’ of homeowners - Michelle Thomson - the SNP Member of Parliament with 17 homes

Lawyer involved in property deals with Michelle Thomson - was struck off by tribunal. A SOLICITOR - Christopher Hales, who acted for Edinburgh West MP Michelle Thomson and her husband in multiple property deals, has been struck off for professional misconduct over his part in 13 deals involving Ms Thomson or M&F Property Solutions, of which she was a partner.

Michelle Thomson, the party’s shadow minister for business, innovation and skills, has been accused of taking advantage of vulnerable families by building a property portfolio worth about £1.7 million by buying homes at knockdown prices from families struggling to pay their mortgages.

Hales, who once listed his occupation as “Police Constable” – and is now struck off by the Scottish Solicitors Discipline Tribunal from working as a solicitor - handled numerous property deals for his client – SNP MP Michelle Thomson. Mr Hales acted for Ms Thomson before she was elected as an SNP MP.

According to a ruling by the Scottish Solicitors’ Discipline Tribunal, a full version of which has been published by the Sunday Times, Mr Hales failed to provide key information to mortgage lenders in breach of guidelines designed to prevent fraud in numerous cases.

The decision to strike off Christopher Hales came to a view “the solicitor must have been aware there was a possibility he was facilitating mortgage fraud.”

The decision stated: “The Tribunal had no hesitation in making a finding of professional misconduct. There were numerous breaches of the CML Handbook in respect of 13 different transactions involving an ongoing course of conduct which continued for a period of over one year. The Tribunal has made it clear on numerous occasions that institutional lenders are clients of Respondents in the same way as any other clients and are owed the same duties of care. The CML Handbook has been instituted to help prevent mortgage fraud and emphasise the reporting duties on the part of solicitors. In this case the Respondent had a clear duty to report the back to back transactions, cash backs, increases in prices and deposits being provided by a third party to the lender. These matters would have been very likely to have had a material effect on the lender's decision to lend. The Tribunal consider that the features of these transactions were such that the Respondent must have been aware that there was a possibility that he was facilitating mortgage fraud, whether or not this actually occurred. He generated fees on the basis of allowing this to occur. It must have been glaringly obvious to the Respondent that something was amiss when cash backs of £27,000 or £28,000 from the seller to the purchaser were involved.”

“There were so many breaches of the CML Handbook in these cases that the Respondent would have known that he did not have his client's authority to draw down the funds and accordingly the Tribunal also found it a breach of Rule 6 of the Accounts Rules. The Tribunal considered that not only did the Respondent fail to act in the best interests of his lender clients but he failed to act with the utmost propriety towards these lender clients. This is extremely damaging to the reputation of the legal profession.”

“The Tribunal took account of the Respondent's responses contained in the Executive Summary Report but did not consider that these provided any satisfactory explanation for what had happened. The Tribunal note that the Respondent has ceased practice and took account of the fact that the Respondent had cooperated by admitting the averments of fact, duty and misconduct. The Respondent however did not attend at the Tribunal to provide any mitigation in person.”

“In the whole circumstances, given the ongoing course of conduct, the large number of transactions involved, the Respondent's knowledge of the central role of Mrs A and Company 3, which should have set alarm bells ringing and the fact that this type of conduct is likely to bring the profession into disrepute, the Tribunal considered that it had no option other than to strike the Respondent's name from the Roll of Solicitors in Scotland.”

 Solicitor in Thomson's house deals struck off

Sunday Times 27/09/2015

Mark Macaskill ; Jon Ungoed-Thomas

NICOLA STURGEON'S frontbench spokeswoman on business has been involved in a series of property deals exposed as possible mortgage fraud, according to a public ruling.

Michelle Thomson, the Edinburgh West MP and Scottish National party's shadow minister for business, innovation and skills, was involved in the suspect deals in 2010 and 2011. Many of the vendors were "distressed" and anxious to sell. Thomson has strongly denied any wrongdoing.

The solicitor, Christopher Hales, who acted for Thomson, was struck off last year for professional misconduct over his role in the deals.

All of the 13 transactions for which Hales was struck off involved Thomson or the property venture M&F Property Solutions, in which a tribunal stated she was a partner.

The 53-page Scottish Solicitors' Discipline Tribunal ruling states the "central role of Michelle Thomson and M&F Property Solutions in a number of these transactions should have set alarm bells ringing". A redacted version of the ruling was published last year but released in full to The Sunday Times last week.

It said Hales "must have been aware that there was a possibility he was facilitating mortgage fraud, whether or not this occurred". In some cases loans obtained for the properties were greater than the actual purchase price. Hales failed to provide the mortgage company with key information that is used to prevent fraud.

The correct facts — if they had been provided to the lender — may have had "a material effect on the decision to lend", the tribunal ruled.

The Sunday Times revealed last week that Thomson and her husband, Peter Thomson, a music teacher, had built up a property portfolio, worth about £1.7m according to Registers of Scotland documents, by buying homes at knockdown prices from families in financial hardship.

It also reported claims from families of discrepancies on the land registry, alleging that the price on official records was higher than the amount received by vendors. Peter Thomson, who bought some of these properties, denies any wrongdoing and official documents show vendors confirmed the sale values.

The Law Society of Scotland said last week it was examining the property transactions detailed by this newspaper's investigation. It can prosecute cases before the Scottish Solicitors' Discipline Tribunal. A tribunal document also confirmed Michelle Thomson's role in mortgage deals set out at the disciplinary hearing against Hales, a former partner at Grigor Hales in Edinburgh, in May last year.

In one of the deals, Sarah Capper, 77, responded to a newspaper advertisement to sell her three-bedroom home in Stirling in the autumn of 2010. Capper says she had bought it for £79,000 about two years previously and spent £50,000 on refurbishments, including a new kitchen and a conservatory.

Capper, who has two sons, three grandchildren and two great-grandchildren, was being treated for skin cancer, which is now in remission, and was anxious to return to England to be near her family. She was offered £64,000 for the house by Frank Gilbride, a former journalist who was a business partner of Thomson.

Capper reluctantly accepted the offer and the house was sold to Gilbride on November 19 2010. On the same day Michelle Thomson bought it from Gilbride for £95,000, but she then received a "cashback" from Gilbride of £28,181.80.

Hales, Thomson's lawyer, did not inform the lender — The Mortgage Works — that the property had been bought and sold in a "back-to-back" transaction and that Thomson had got it at a discount, because of the cashback.

The tribunal ruled that it must have been "glaringly obvious" to Hales that something was "amiss".

Capper, a widow who now lives in Henfield, West Sussex, said last week she wanted an explanation of why Gilbride and Thomson had bought and sold her house on the same day with a £31,000 mark-up.

She said: "I am livid. My daughter-in-law had told me not to accept the offer, but I had to do it. I sold it to get back to England and see my family.

"I had cancer, and I had no one to fall back on. I could have got a lot more money if I had gone to an estate agent. I am struggling now."

In June 2010 Michelle Thomson bought a three-bedroom terraced house near Aberdeen for £245,000 and sold it a few hours later to someone she knew for £315,000.

The tribunal ruled that the quick sale — or "back-toback" transaction — was not disclosed by Hales to the mortgage lender, contrary to the Council of Mortgage Lenders Handbook.

Experts say back-to-back transactions by two parties operating together can be used to secure a larger mortgage than would otherwise be available. It can also reduce tax, by recording a higher price on the land registry than was actually paid. It means when the property is later sold, the profit — which is subject to capital gains tax — may be understated by thousands of pounds.

In 10 of the other deals for which Hales was struck off, M&F Property Solutions, in which both Thomson and Gilbride were partners, provided deposits to other homebuyers.

The tribunal said Hales should have told their lenders that some of the funds were "not provided by the purchaser".

The tribunal ruled that it had no other option than to strike Hales from the register, the most severe sanction at its disposal.

It said his actions had been "extremely damaging" to the reputation of the legal profession. The Mortgage Works, which provided a loan for Thomson for Capper's home, would not say whether it was investigating the matter, but said solicitors were required to warn them of any back-toback transaction.

Thomson, 50, trained as a musician at the Royal Scottish Academy of Music and Drama but later embarked on a business and property career. Her husband teaches music at St George's School for Girls, a private school in Edinburgh.

Last month her email address appeared on the list released by hackers of the infidelity website Ashley Madison. She said the email address was out of date and that she was the victim of a smear.

Registers of Scotland records show at least 17 homes in Scotland are owned by Thomson, her husband or the couple jointly. The Thomsons say they operate to the highest ethical standards, and that they provide support and advice for struggling families.

Sandra and Garry Kelly, who sold their Edinburgh home to Peter Thomson in 2009, said they intend to lodge a complaint with the Scottish Legal Complaints Commission. The couple say they were offered £73,000 by an intermediary for their home, but legal papers say the price to be paid by Peter Thomson was £105,000.

Sandra Kelly said she signed this document because she was told it was a condition of the sale, but insists the actual price was £73,000.

A spokesman for Michelle and Peter Thomson said land registry documents showed that the Kellys had acknowledged receipt of the sum of £105,000 for their property. The spokesman previously said the Thomsons "vigorously deny any allegation of wrongdoing or impropriety".

A spokesperson for Michelle Thomson said: "Michelle has always acted within the law and will be giving no further comment."
Gilbride did not respond to a request for comment. Hales was not available for comment.

A spokeswoman for the Law Society of Scotland said: "The Law Society is considering the information it has received and which has been reported in The Sunday Times."

Friday, September 25, 2015

Former Lothians politician & solicitor who was jailed for stealing £70K from disabled friend lands new job as boss of EU funded Moray Leader

A FORMER solicitor & Tory politician who was jailed for 27 months after stealing at least £70,000 from a disabled client who depended upon him as a close friend – is now handling public cash & EU money flowing into Scotland.

Iain Catto (51) is now the boss of funding programme Moray Leader, an EU funded project run by Moray Council which is also part of the Scotland Rural Development Programme (SRDP).

Catto - formerly a member of Lothian Regional Council from 1990 to 1994 was sacked from his job as a solicitor for gross misconduct. Iain Catto was also censured by the Scottish Solicitors Discipline Tribunal.

Catto was jailed in 2008 after Edinburgh Sheriff Court heard he systematically stole sums of £11,000 and £9,000 at a time between December 2002 and 2004 from the criminal injuries pay-out his client Francis Fleming - had received. He even sold some of his victim's shares to get more cash.

The Scottish Sun newspaper reports:

CHARMED ROBBER

Thieving brief's new job doling out public cash

By Russell Findlay Scottish Sun  21/09/2015

A FORMER Tory politician who stole £70,000 from a disabled friend has landed a new job handing out taxpayers' cash.

Crooked ex-lawyer Iain Catto was jailed for 27 months after fleecing partially paralysed Francis Fleming.

But he is now the boss of funding programme Moray Leader, which has given away £2million of public money to good causes.

And Catto, 51, also works for charity Foundation Scotland as a "community engagement executive".

Last night his victim's son Frank MacLennan, 51, slammed the decision to hire the ex-con.

He said: "It's a disgrace, he should not be in a trusted position.

"I'm surprised that anyone would give him jobs like these."

Frank, of Falkirk, added: "He should not be working with large sums of money — especially public and charity money."

Former councillor Catto was a rising star in the Scottish Conservatives and worked for blue-chip law firms in Edinburgh.

Brother He befriended his client Francis and pretended to be looking after his finances. Catto became so trusted he even had a key to his victim's home in the capital.

But he stole blank cheques and blew the haul on flights, hotels, meals and a £300 booze splurge.

After he was brought to justice in 2006, his victim Francis, 69, said: "I trusted him better than my brother.

"I thought all his advice was for my own good — I didn't realise he was doing me out of all I had."

Catto, now living in Elgin, joined Moray Leader in July 2013 and works as the programme coordinator. It is run by Moray Council and funded with EU cash.

In April this year Catto joined Foundation Scotland, which covers Moray, Aberdeenshire and Angus.

The charity's website mentions his law degree but not his conviction. A spokesman said: "Iain Catto made us aware of his past.

"We believe everyone should be given a second chance."

Moray Council added: "He was open about his past when we interviewed him. He is not in a position where there is a risk to public funds."

Catto refused to comment.

A NEW BRIEF?

Iain Catto’s Foundation Scotland profile shows no mention of his criminal past:

Iain joined the Foundation in April 2015 and works part time covering Moray, Aberdeenshire and Angus. He is based in Elgin, and currently spends the rest of his working week working for the Moray LEADER Programme, an EU funded rural development grants programme as its Programme Co-ordinator, where he was full time prior to joining Foundation Scotland. Iain has an honours degree in law, and spent much of his working life operating in Edinburgh. He has been a volunteer for various voluntary organisations over the years, including ones operating with the elderly, young people, and in the field of education.

Iain was brought up in rural areas of Perthshire and Ross-shire, and therefore understands some of the challenges facing rural communities. Iain in his spare time is a follower of Ross County, Leeds United and professional cycling, and is an active member of his local community council, where his particular focus is on transportation issues and licensing matters.