TRIAL BALLOON: Lord Advocate deflects calls for inquiry on Crown Office handling of mortgage fraud allegations against solicitor who represented MP Michelle Thomson

‘Unconvincing’ Lord Advocate raises fears of cover up. DURING one of the worst performances ever by a Lord Advocate before the Scottish Parliament – top prosecutor Frank Mulholland said he did not think there should be an inquiry into the handling of an investigation of a lawyer who was struck off over property deals involving SNP MP Michelle Thomson.

Responding to questions on when the Crown Office & Procurator Fiscal Service (COPFS) was informed of allegations of mortgage fraud involving solicitor Christopher Hales – Frank Mulholland told MSPs that he does not believe there should be an inquiry into when prosecutors knew and how the case has since been handled - after it emerged the Law Society briefly informed the Crown Office of the ‘issue’ in December 2014.

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.

In the Scottish Parliament on Thursday, Labour MSP Jackie Baillie asked Mr Mulholland about the timeline in the case.

During the 10 minute session, Lord Advocate Frank Mulholland presented a timeline of events as the Crown Office saw it:

18 December, 2014 - The issue of solicitor Christopher Hales was raised "informally" by the Law Society of Scotland with the Crown Office. Neither the clients nor properties were named.

28 April, 2015 - The issue was raised again and it was noted that the matter of referral to the Crown Office was still under consideration by the Law Society. Neither the clients nor properties were named.

1 July, 2015 - The Crown was advised by the Law Society that it was required to obtain authorisation from its Guarantee Fund Sub Committee to formally refer the case.

3 July, 2015 - Referral was received by the Crown following the required authorisation. Documents were handed over to the Crown Office and in those documents the names of clients and properties were disclosed.

9 July, 2015 - A formal referral was made to the Crown Office and instructions were issued to Police Scotland.

Frank Mulholland  questioned by MSPs about when the Crown Office was first notified of allegations of mortgage fraud against Christopher Hales.

Mr Mulholland said: "As the Crown has made clear on a number of occasions, the case of Christopher Hales was first brought to its attention by the Law Society of Scotland at a meeting on 18 December, 2014."

Ms Baillie asked if Mr Mulholland believed there should be an investigation into the processing of information between the Law Society and the Crown Office.

She asked if he would order such an inquiry, given that there may have been "additional opportunities for alleged mortgage fraud" due to the delay.

Mr Mulholland responded: "I don't have the power to order an inquiry, and I don't think there should be an inquiry."

He said Police Scotland were instructed to investigate the allegations on 3 July 2015 and formally issued officers to do so on 9 July.

He said the issue was raised at routine quarterly meetings between the Law Society and the Crown Office.

Mr Mullholland said the Crown Office was first made aware on 18 December 2014 that the case was under consideration for referral. The issue was raised again on 28 April.
Image copyright PA Image caption Ms Thomson denies acting illegally

Mr Mulholland added: "The first time the Crown was made aware of the identity of the clients and the properties, was the 3rd of July."

Mulholland was also asked by Jackie Baillie if the Crown Office had begun any Proceeds of Crime actions against those involved.

Embarrassingly for the Lord Advocate, and appearing to have little clue as to the sequence of events, he responded “not yet”.

Police Scotland launched an inquiry only after the Crown Office was finally handed the detailed case files in the Hales case by the Law Society, some seven months from the day it first alerted prosecutors to the case.

Hales was banned from the legal profession in May 2014 over 13 property deals linked to Thomson and her business partners. The transactions involved “back to back” sales, where homes – often owned by vulnerable people – were bought at below full market value and then resold at far higher prices, in some cases on the same day; where large cash sums were transferred between the parties involved; where mortgage loans were sought that were higher than the price paid for the home, and where higher prices than those actually paid were recorded in the Scottish land registry.

Mortgage companies involved in those transactions, including Lloyds, which gave loans through its subsidiary Birmingham Midshires, and Virgin Money, which now owns the mortgage book for Northern Rock, which lent money for one sale, have confirmed they are now in contact with the police.

The Sunday Times disclosed it had submitted new evidence of an unusual property transaction to Police Scotland detectives after a couple who sold a home to Thomson alleged they had £32,000 deducted from the sale proceeds to pay off a loan they had no knowledge of.

The solicitor involved in that transaction, James Craig, had been found guilty of professional misconduct in February 2014 by the Scottish Solicitors Disciplinary Tribunal (SSDT), the body that struck off Hales three months later, and fined £2,500 for breaching money laundering regulations. There was no evidence that Craig acted improperly in the case reported by the Sunday Times.

The Sunday Mail reported that a second lawyer named in the SSDT judgment on Hales called Christopher Tulips, whose firms Strefford Tulips was involved in several deals for Thomson’s firm M&F Property Solutions, had also been censured and fined £2,500 for his role in back-to-back property deals. The published ruling by the SSDT on Tulips is anonymised, so it remains unclear whether his case involved transactions linked to Thomson.

Last week, the Law Society said its director of financial compliance Ian Messer "informally" raised concerns about the case of Mr Hales during two separate meetings with prosecutors in December 2014 and April 2015.

However, the Law Society did not "formally" submit its evidence to the Crown until July 2015, two months after Ms Thomson was elected SNP MP for Edinburgh West.

Law Society chief executive Lorna Jack gave an "absolute and categorical assurance" last week that the election played no part in the timings of the case.

She said Mr Messer would have seen Ms Thomson's name in the unredacted report into Mr Hales but may not have been aware she was a Westminster candidate.

The secretary to the Law Society committee that struck Mr Hales off, Sheila Kirkwood, is said to be a personal acquaintance of Ms Thomson with close links to the SNP.

Lorna Jack has pledged to look more deeply into Ms Kirkwood's links with Ms Thomson, but said she has received an assurance the secretary was unaware of the MP's links to Mr Hales until she read about it in media reports.

Ms Thomson is linked to 13 transactions Mr Hales conducted in 2010-11 where properties were said to have been bought cheaply from clients looking for a quick sale and then sold at a huge mark-up on the same day.

Complicated "cashback" deals were said to have been used to artificially inflate property prices in order to secure bigger loans from lenders.

Ms Thomson has denied acting illegally.Ms Thomson has surrendered the SNP party whip and has also stood down as the party's business spokeswoman at Westminster until the investigation into Mr Hales has concluded.

Previously, First Minister Nicola Sturgeon denied having any prior knowledge of a scandal which led to one of her most prominent MPs stepping down from the party.

During First Minister’s Questions last Thursday, 1 October,  Nicola Sturgeon said in response to questions that "serious issues" had been raised around the conduct of Michelle Thomson. The First Minister said that a police investigation should be allowed to take its course.

NO HOMELESSNESS FOR POLITICIANS:

The House of Commons Register of Members’ Interests lists 16 SNP MPs as holding property interests from which most receive rental income.

Under the rules, Members of Parliament are required to list a property if (i) its value is over £100,000 and (ii) if they receive rental income of at least £10,000 a year.

Tasmina Ahmed-Sheikh(Ochil and South Perthshire): Three flats in Glasgow and a house in Kingussie, Highlands and Islands (i/ii).

Richard Arkless(Dumfries and Galloway): A house in Broxburn, West Lothian, and a flat in Glasgow (i/ii).

Ian Blackford(Ross, Skye and Lochaber): Croft, including two holiday rental properties on the Isle of Skye (i/ii). A house in Lanark (i),

Deidre Brock(Edinburgh North and Leith): A half share in two Edinburgh flats (i).

Lisa Cameron(East Kilbride, Strathaven and Lesmahagow): A house in South Lanarkshire (i/ii). Five residential and holiday let apartments in Edinburgh and South Lanarkshire (i/ii).

Martyn Day(Linlithgow and East Falkirk): A house in West Lothian (i).

Patricia Gibson(North Ayrshire and Arran): A flat in Edinburgh (i).

Calum Kerr(Berwickshire, Roxburgh and Selkirk): A house in Wester Ross (i/ii).

Chris Law(Dundee West): A flat in Dundee (i) and a flat in Aberdeen (i).

Angus Brendan MacNeil(Na h-Eileanan an Iar): Jointly owns a house in Fort William plus a flat in Glasgow and a flat in London (i/ii).

Stuart McDonald(Cumbernauld, Kilsyth and Kirkintilloch East): A flat in East Dunbartonshire (i).

John McNally(Falkirk): Owns a hair salon, The Barber Shop, from which he receives £600 a month in rent.

John Nicolson(East Dunbartonshire): A terrace house in London’s Tower Hamlets (i/ii). He occasionally receives income for renting it out for photoshoots.

Steven Paterson(Stirling): A half share in a flat in Stirling (i).

Tommy Sheppard(Edinburgh East): Commercial premises and residential property in Edinburgh (i) owned by entertainment company Salt ‘n’ Sauce Promotions of which he is a shareholder.
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Michelle Thomson(Edinburgh West): Two residential properties in Edinburgh, one in Falkirk, one on the Isle of Bute, one in East Calder, one in Stirling, one in Dollar, a half share of a property in Edinburgh and a quarter share of a property in Edinburgh (i/ii). She is a shareholder in the property management firm Your Property Shop.

Conflict of Interest accusations hit Law Society of Scotland as employee who sat in on decision to refer SNP MP’s struck off solicitor to Crown Office is linked to pro-indy lawyer group

Sheila Kirkwood, a founding member of Lawyers for Yes. AN EMPLOYEE of the Law Society of Scotland who sat on a committee considering the case of a solicitor linked to SNP MP Michelle Thomson’s property dealings - was also a leading pro-independence activist.

And, papers reporting brief details of the meeting feature no declarations of interest by Kirkwood or any other members of the Committee which then decided to refer the matter to prosecutors.

Sheila Kirkwood, secretary of the same Guarantee Fund Sub-Committee which eventually took the decision to refer the matter of Christopher Hales to the Crown Office in July 2015 – four years after the event – has since been identified as a founding member of Lawyers for Yes – a pro-independence group set up ahead of the Scottish independence referendum held last September 2014.

Kirkwood also endorsed Michelle Thomson on her Facebook page.

Within the minute of the meeting in which Kirkwood was present as secretary of the Guarantee Fund Sub-Committee, there is no mention of any declarations of interests by members of the committee - including Kirkwood.

Facing calls to explain a significant & potential conflict of interest, Lorna Jack, Chief Executive of the Law Society of Scotland, said she was “confident there was no conflict of interest”.

Chief Executive of the Law Society of Scotland, Lorna Jack, issued the following statement at a press conference held at 3.15pm, 1 October 2015:

“The Law Society’s number one regulatory priority is to protect the public from any wrong doing by solicitors. As I have previously commented, following a routine inspection of the accounts of law firm Grigor Hales of Gorgie Road, Edinburgh in July 2011, we believed Christopher Hales had not met the required standards of professional conduct.

“We therefore took action to protect the public by suspending Mr Hale’s practising certificate in September 2011. There is a duty on us as a regulator to report suspicious activity quickly to the appropriate authorities. Such reports and timings or information about the report are confidential by law.

“I want to stress that Law Society employee Sheila Kirkwood has not acted unprofessionally or inappropriately at any time. Sheila is a hard-working, dedicated colleague. She had no involvement in taking papers on the Christopher Hales case to the Law Society Guarantee Fund sub-committee and in no way delayed these papers being taken to the committee. Sheila’s role as secretary to the committee is to write the minute.

“The names of Christopher Hales’s clients were not included in any Law Society papers that Sheila handled.  The first time Sheila realised Michelle Thomson was involved in the Christopher Hales case was from recent media reports.

“Sheila is entitled to her personal political views. The Law Society is a non-partisan organisation. However, we do not stop our staff from holding or expressing their own views in their personal lives.  People in Scotland are legally entitled to express their personal opinions.”

“I am confident there was no conflict of interest in relation to Sheila’s role at the Law Society.”

However – Lorna Jack could not explain why the minute of the meeting released by the Law Society (published below) contains no recusal or declaration of interest of those in attendance.

GUARANTEE FUND SUB COMMITTEE:

Minute of Meeting of the Guarantee Fund Society of Scotland held at 26 2 July 2015 at 9.30am

GRIGOR HALES, EDINBURGH - 20732

Date Considered 2 July 2015

Sub-Committee Members Present 6 solicitors; 5 non-solicitors

Papers considered by Sub-Committee None. This matter was the subject of a verbal report.

Background

The Sub Committee reminded itself that it had previously withdrawn the Practising Certificate of Mr Christopher Hales and that he had subsequently been struck off by the Scottish Solicitors Discipline Tribunal (SSDT). Mr Hales had been the sole partner at the firm which had also ceased. The Sub Committee were asked to consider whether comments made by the SSDT justified a referral of the matter by the Law Society of Scotland to the Crown Office.

Sub Committee's Deliberations

It was noted that the SSDT decision states that "Mr Hales must have been aware that there was a possibility that he was facilitating mortgage fraud" and that "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".

Sub Committee's Decision

The Sub Committee decided that given the statements made by the SSDT following a complaint arising from a Financial Compliance inspection, that the matter should be referred to the Crown Office for investigation.

Delegated Powers..

To refer the above matter to the Crown Office for investigation

The Guardian newspaper reported: The row over the official handling of the case deepened further after the Law Society confirmed that its head of investigations, Ian Messer, had received a detailed report from the Scottish Solicitors’ Discipline Tribunal (SSDT) naming Thomson, her husband Peter and Thomson’s business partner Frank Gilbride in July 2014.

Messer first informally told the Crown Office in December 2014 that Hales had been struck off by the SSDT for suspected mortgage fraud, during a routine quarterly meeting between the two organisations. Crown Office lawyers asked Messer to provide them with detailed case files but failed to get them.

At the next meeting on 28 April 2015 – a week before Thomson was elected as MP for Edinburgh West – the Crown Office asked again for the Hales case files. They were not submitted to the Crown Office until 3 July 2015; six days later, the Crown Office alerted fraud officers at Police Scotland, who launched a formal investigation.

Those fresh details emerged when the Law Society’s chief executive, Lorna Jack, took the unusual step of arranging a hurried press conference to defend her organisation’s handling of the affair, and the conduct of Sheila Kirkwood, who is secretary to the society guarantee fund sub-committee which handled the Hales case but had delayed handing the papers over to the Crown Office.

It emerged that Kirkwood was, with her husband and fellow solicitor Paul Kirkwood, a founder of the pro-independence campaign Lawyers for Yes, and as an active nationalist had attended dinners for Thomson’s pro-independence campaign Business for Scotland. Kirkwood had also “liked” Thomson on her Facebook page.

Jack insisted that Kirkwood had had no direct say over the Law Society’s handling of the case against Hales, but she admitted that no independent investigation had yet taken place into whether Kirkwood was aware that Thomson was linked to Hales’s property dealings.

Jack said she had taken Kirkwood at her word that she first became aware of that link when Thomson was named in the media earlier in September.

“I want to stress that Law Society employee Sheila Kirkwood has not acted unprofessionally or inappropriately at any time,” Jack said. “Shelia is a hard-working, dedicated colleague. [I] am confident there was no conflict of interest in relation to Sheila’s role at the Law Society.”

Although it took until July 2015 before the Crown Office and police were handed the case files against Hales, Jack confirmed that the Law Society first became alerted to Hales’s mortgage dealings with Thomson in July 2011 during a routine inspection of his firm’s books.

He was suspended in September 2011 “to protect the public”, she said. “The Law Society’s No 1 regulatory priority is to protect the public from any wrongdoing by solicitors,” she added.

Jack implied too that the Law Society would also have alerted the police to any suspicions because of its legal duties under the Proceeds of Crime Act, but she repeatedly refused to elaborate on whether and when that had been done with the Hales case.

“Under the Proceeds of Crime Act, there is a duty on us as a regulator to report suspicious activity quickly to the appropriate authorities. Such reports and timings or information about the report are confidential by law,” she said.

The “Guarantee Fund” of the Law Society of Scotland is possibly one of the murkiest self protection mechanisms operated by the legal profession’s in-house self regulator.

The Guarantee Fund is tasked with paying out compensation to victims of corrupt or rogue solicitors.

However, the Guarantee Fund has racked up numerous accusations of obstructive tactics and deliberate falsification of facts to prevent financially ruined clients securing full compensation for their losses to rogue Scottish solicitors.

Claims against the Guarantee Fund are known to be in the millions of pounds annually.

Shockingly, the percentage of compensation eventually secured as a payment from the fund where some cases can take 5-10 years to be heard - can be as little as 5% to 10% of a client’s total financial losses to rogue solicitors.

The ‘aims’ and functions of the Guarantee Fund sub-Committee as claimed by the Law Society of Scotland, but rarely fulfilled in reality, are:

• oversee the fulfilment of the statutory obligations of the Law Society of Scotland regarding the Guarantee Fund and financial compliance
• ensure that risks to the Guarantee Fund are managed to an agreed and acceptable level
• ensure that Guarantee Fund operations are in accordance with stated Guarantee Fund policy
• protect the Guarantee Fund, the profession and the public interest by dealing properly and promptly with significant cases of non-compliance with accepted financial compliance standards (eg accounts rules/money laundering regulations)
• influence strategic developments regarding financial compliance and the Guarantee Fund to ensure that processes remain up to date and fit for purpose
• enable effective communications with the profession, public and other stakeholders  regarding financial compliance standards and Guarantee Fund claims
• benefit the Guarantee Find/financial compliance processes by acting as a source of expertise on relevant working practices and issues within the legal profession
• monitor financial compliance activity (planning, progress, quality & approach)
• review outputs from financial compliance activity (including the conducting of interviews) and where appropriate (eg as a result of breaches in accounts rules or money laundering regulations), refer matters of professional conduct to the Scottish Legal Complaints Commission and Complaints Investigation Team for investigation or recommend other actions (eg interventions, judicial factories etc) in accordance with the scheme of delegation
• monitor the consistency and quality of Guarantee Fund claims and intimations processing
• decide upon Guarantee Fund claims (as detailed in the delegated powers) or refer to the Professional Conduct Committee, as appropriate.
• consider and approve strategic policy matters related to financial compliance and Guarantee Fund matters
• consider the continuing adequacy of accounts rules and other guidance to protect the Guarantee Fund, the profession and the public, monitor the development of new or amended rules and recommend these for approval.
• review financial compliance activity to inform and influence the profession, public and other stakeholders about relevant financial standards, compliance requirements and claims issues
• monitor Guarantee Fund risk management procedures and approve
• key policies related to insurance arrangements, financial reserve levels, investment decisions and firms which pose a risk to the fund
• monitor the financial position of the Guarantee Fund and recommend approval of the annual budget and annual subscriptions to the Council
• be made aware of operational developments in the workings of the financial compliance and Guarantee Fund functions

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."