Paralegal from Bell & Co Solicitors, Kilmarnock jailed for £87K embezzlement & mortgage fraud

A PARLEGAL from the law firm of Bell & Co solicitors in Kilmarnock has been jailed for two years after admitting embezzlement & mortgage fraud totalling more than EIGHTY SEVEN THOUSAND POUNDS. It was also revealed Arlene Reid, who worked at the law firm between 2007 & 2011 had two prior convictions for dishonesty.

BBC News reports : Legal aide Arlene Reid jailed for £87,000 fraud charges

A woman who admitted embezzlement and mortgage fraud totalling more than £87,000 has been jailed for two years.

Arlene Reid, 37, committed the offences while working as a paralegal at Bell and Co solicitors in Kilmarnock between May 2007 and July 2011.

The town's sheriff court heard how she defrauded the Alliance and Leicester into releasing £64,371 by pretending she was buying her council house.

Reid, from Irvine, also stole £23,000 in cash from her employers.

Following her conviction, it emerged that Reid has two prior convictions for dishonesty.

Jailing her, Sheriff Iona McDonald told Reid the seriousness of the offence meant no other disposal was suitable.

Clydesdale Bank faces legal challenge over refusal to disclose information on fraud case

The Clydesdale Bank is facing a legal challenge over its decision not to hand over information relating to a fraud which was committed against one of its customers (odd, you would have thought the customer had a right to know – Ed)

The Herald reports :

Fraud victim mounts legal challenge against bank

LUCY ADAMS, Chief Reporter April 06 2009

A legal challenge is to be mounted against one of Scotland's leading banks after it refused to hand over information about a fraud committed against a customer.

Gilbert Wright, 87, went to a cash machine in the main street of Cambuslang, North Lanarkshire, last New Year's Eve, and discovered that £8500 had been taken out of his Clydesdale Bank account.

The money was refunded by the bank after a delay, but it has refused to pass on the details of how it happened, claiming it cannot because of the Data Protection Act.

Lawyer Cameron Fyfe is now looking to launch a legal case against the Clydesdale for refusing to hand over details. He said: "If neither the bank nor the police are prepared to expose voluntarily the identity of the fraudster, we will seek to obtain a court order for it. If someone were hit over the head with a brick, they would be treated as a victim and yet in this case, they are not."

Experts say bank and credit card fraud is a growing problem as a result of the global financial crisis and yet consumer groups say too little is being done to protect customers and advise them.

Identity theft is estimated to cost the UK economy £1.7bn, and affects more than 100,000 people every year.

Gail Reid, Mr Wright's daughter, said: "My father was very badly shaken. We couldn't understand how it could have happened as he doesn't even use telephone banking. They said there were 11 calls made and that when the person calling had tried to move £11,000 to another bank account, they had advised him to split it and move it in two different transactions.

"I said I wanted the police to look into it but the (bank) said no and that they would reimburse my dad and call the police themselves. We were assured the money would be back in within five working days but nothing happened. I kept calling them.

"My dad was so upset. This was his life savings. It was only after I involved the lawyer that they finally agreed to repay the money. There was no apology though. The whole thing was deplorable.

"We want to know who took the money. My dad is concerned that it could be someone he knows. We went to the police and they said it was up to the bank, but the bank said that under data protection they couldn't give my dad any of the details."

Pamela Cameron, Mr Wright's grand-daughter, said: "If someone has fraudulently tried to access your account, the first thing you want to find out is who they are and how they were able to do that.

"The way he has been treated throughout seems unbelievable."
A spokesman for Clydesdale Bank said: "We take the issue of fraud very seriously and employ sophisticated fraud detection and management systems.

"If fraud occurs, extensive investigations are undertaken to seek a criminal conviction. Although these investigations take place we do not share specific details of fraudulent activity."

Consumer rights groups have warned that as the financial crisis hits profits, the banking industry is becoming increasingly reluctant to compensate customers who have lost money through fraud.

Trisha McAuley, head of services at Consumer Focus Scotland, said: "The current economic situation means this problem is just going to get worse. This case really resonates with the concerns people bring to us.

"The key issue is that the bank is seen as the victim and no support is given to consumers. It is a huge problem and the customers are repeatedly left to pick up the pieces themselves without any help. If their identity has been stolen, they get no control over the information and no way to stop it happening again.

"We believe banks should have somewhere that customers can go to get help. We would like to see a national centre dedicated to this."

The Financial Ombudsman Service, which handles consumer complaints against banks, now deals with about 125 cases a month of customers locked in disputes over PIN fraud. Most of these involve withdrawals from cash machines, where the consumer denies either making the transaction or authorising someone else to do so.

Under the Banking Code, to which all banks must adhere, customers are responsible for losses only if they acted "without reasonable care". This could include writing down a PIN or allowing someone else to use a card.

The code clearly states that unless a bank can prove that its customer acted fraudulently or without reasonable care, the most that the customer will be liable for is £50.

No criminal charges as 115 lawyers ‘repay’ £1.6 million to Legal Aid Board

Today’s annual report from the Scottish Legal Aid Board shows an increasing trend among legal professionals – defrauding the legal aid board but not getting away with it as much as before …

Anyway, out of 115 (we hear more – Ed) lawyers repaying at least £1.6 million (no, much more ! – Ed) one would have though the odd criminal charge or two may have been made against the offending solicitor .. but no, as Peter Cherbi’s “Diary of Injustice in Scotland” law blog reports HERE

You can read the Scottish Legal Aid Board’s annual report for 2007-8 here : Annual Report 2007 - 2008 - in pdf format

You can find out which legal firms, advocates & solicitor advocates received the money here : Legal Aid paid to firms of solicitors and Legal Aid paid to Advocates and Legal Aid paid to Solicitor Advocates

The Scotsman reports :

Lawyers repay £1.6 million in crackdown on legal aid

Published Date: 24 March 2009
By Michael Howie

LAWYERS in Scotland have been forced to repay £1.6 million in wrongly claimed legal aid over the past six years.

An investigation by The Scotsman reveals that the number of solicitors and legal firms investigated for apparent legal aid irregularities has increased by 50 per cent in that time.

In 2007-8 alone, 115 individual solicitors and firms were forcedto pay back legal aid.

Much of the money repaid to the Scottish Legal Aid Board (SLAB) that year came from the widow of James Muir.

He conned the body out of £1.8 million by embellishing scores of child abuse cases to claim extra money. The solicitor took his life in 2005.

A handful of the cases have been reported to the Law Society of Scotland and the Crown Office for alleged fraud.

However, it is understood that no solicitor has ever been convicted in a criminal court of defrauding the legal aid board.

The high number of investigations and repayments reflects a drive by SLAB to clean up the distribution of legal aid, which last year cost taxpayers some £155 million – an increase of 3 per cent on the previous year.

The legal aid board says it has "focused" its efforts to rein in falsely claimed funds in recent years. With fraud notoriously difficult to prove, it is often not known whether the false claims were criminal, but experts insist in many cases they will be honest mistakes.

Philip Yelland, director of standards at the Law Society of Scotland, said the "vast majority" of solicitors adhered to high professional standards.

"Any matters referred to us by SLAB follow the society's procedures for dealing with complaints.

"We have a robust investigation process which can lead to the society considering disciplinary action, which may involve prosecution before the independent Scottish Solicitors Discipline Tribunal.

"The tribunal, which has different powers to those of the courts, can impose various sanctions from a censure to striking a solicitor from the roll, banning them from practice."

Two solicitors in recent years have been prosecuted by the tribunal.

Paul Kirk's firm was prosecuted for submitting false accounts and inflated charges – netting him thousands of pounds of legal aid which he should not have been paid. The Lanarkshire solicitor was fined £10,000 in 2007.

Meanwhile, Meredith Graham Sykes was fined £2,500 the same year for trying to obtain payment from the board "by misrepresentation".

Labour's justice spokesman, Richard Baker, said the Scottish Legal Aid Board needed to "get a grip" on the issue to ensure all monies paid were claimed properly.

"The SLAB budget has increased greatly over the years and to ensure access to justice for as many as possible, it's vital that the board ensures absolute accountability and transparency."

Robert Brown, Lib Dem justice spokesman, said: "It's absolutely vital that the Scottish Legal Aid Board is as rigorous as possible in these matters and that, where appropriate, cases are reported for prosecution."

Bill Aitken, for the Conservatives, added: "Bearing in mind that the bulk of the money involved has come from one individual, it seems that Scotland's lawyers can claim to have a reasonably clean bill of health.

"Some of them, however, do have to take more care in submitting accounts as, leaving aside the question of criminality or fraud, there are still cases where the claims submitted do not tie up and this costs a fair amount to investigate."

Allegations of bias as Crown Office fails to prosecute legal aid fraud solicitor

The Scottish Solicitors Discipline Tribunal today bleats for more powers as it uses yet again, the excuse it cannot do anything because Paul Kirk, the solicitor at the centre of the fraud case, had removed his name from the roll of practicing solicitors ...

While the SSDT and the Law Society try to make a meal of alleged 'lack of powers', it is somewhat ironic that SLAB themselves can't even seem to account for the loss of public money in Mr Kirk's billing ...

Quoting the Herald story :

A spokesman for SLAB said they could not put an exact figure on Mr Kirk's frauds but he had paid money back and SLAB were confident there had been no loss to the public purse.

What a surprise, the Scottish Legal Aid Board not in a position to put a figure on legal aid fraud in the case of a solicitor ... seems they feel different in 'other' circumstances ....

The Herald reports :

The Herald reports :

LEGAL AID FRAUD: Top solicitor ripped off thousands

A high-earning solicitor who seemed to be "busy doing nothing" was ripping off legal aid funds by "double charging" and claiming false expenses.

Now the Scottish Solicitors' Discipline Tribunal, which found Paul Kirk of Viewpark, Uddingston, Glasgow, guilty of professional misconduct has called for tougher penalties for rogue lawyers.

Mr Kirk, 48, became one of the five highest earners in a league of one-man firms in Scotland after setting up in business on his own.

But an investigation showed he was submitting false accounts and inflated charges - netting him thousands of pounds which he should not have been paid.

In a written judgment issued today the tribunal complained that they could only impose a "slap-on-the-wrist" penalty because Mr Kirk had already taken his name off the Law Society of Scotland's list of practising solicitors before they could take action against him.

The tribunal recently made a similar complaint that former "Ally McDeal" solicitor Angela Baillie, 34, had avoided professional punishment in the same way after she was jailed for smuggling drugs into Barlinnie Prison.

Mr Kirk, a solicitor since December 1981, was a partner in a Glasgow law firm until he set up Paul Kirk and Company in February 2002, working mainly in Hamilton and Glasgow Sheriff Courts.

The following financial year the sums he was charging topped £322,000 and in 2003-2004 he was paid £311,000 by SLAB.

At least 10 per cent tenth of what Mr Kirk was claiming was reckoned to be fraudulent, an investigation showed.

Lawyers doing criminal work for clients eligible for legal aid are paid a fixed fee for minor cases at sheriff court level.

When handling more serious charges they can claim for travel expenses and waiting around in court, as well as billing for preparation time and consultations with clients.

SLAB officials were curious that Mr Kirk seemed to be doing a lot of "time and line" cases and few fixed fee cases.

They also noticed interviews with clients were often said to have lasted more than an hour and Mr Kirk charged for "excessive preparation and perusal times."

The tribunal concluded: "All of which methods of charging were designed to enhance the fee claimed."

The Scottish Legal Aid also found that Mr Kirk was charging for "waiting time" in court when he was working on other cases and double-charging the same expenses for more than one client.

When they seized his paperwork they found that on one day he claimed he was discussing clients' court cases when he was actually meeting SLAB auditors.

The investigation of a sample of about 15 per cent of his case-load between 2002 and 2004 found 30 occasions where he had charged SLAB twice for the same time.

Chartered accountant Ian Middleton, director if audit and compliance with SLAB, explained that solicitors sent in bills one at a time, so it was difficult to check for double charging although new measures had been introduced to toughen up monitoring.

He said Mr Kirk was doing a lot of "time and line" work but not a lot of fixed fee work. "Mr Kirk seemed to be busy doing nothing," said Mr Middleton. "There were concerns within SLAB that the time and line work was being padded out."

Mr Middleton said he didn't think Mr Kirk had simply made mistakes because errors were always in the solicitor's favour.

An investigation concluded there had been "a massive amount of overcharging."

SLAB took their concerns to the Law Society of Scotland, the professional body which regulates solicitors, and they raised an action with the independent Scottish Solicitors' Discipline Tribunal.

Mr Kirk - who had earlier claimed to SLAB officials that he had simply made mistakes in his accounts - did not appear or make any answers to the charges.

He was fined the maximum of £10,000 and censured.

The written ruling adds: "The tribunal again wishes to place on record its concern that, as in another recent case involving a former solicitor, it lacks the power to impose on the respondent (Kirk) a penalty which it would regard as appropriate in the circumstances of the case."

The tribunal said Mr Kirk's fraudulent claims "strike at the heart of the obligations of honesty and integrity which are incumbent on every solicitor."

They repeated their call for legislation which would give then power to prevent rogue solicitors ever applying to be re-admitted to the profession.

A spokesman for SLAB said they could not put an exact figure on Mr Kirk's frauds but he had paid money back and SLAB were confident there had been no loss to the public purse.

The matter had also been reported to police but it was understood there would be no criminal prosecution.

Sources suggested the total fiddled by Mr Kirk amounted to some £35,000.

Widow of Scottish lawyer agrees to return £1.8million legal aid cash fraud

"A SOLICITOR "embellished" claims for legal aid in child welfare cases with false details of sex abuse to fraudulently obtain nearly £2 million" - reports the Scotsman ... but while the solicitor concerned in this particular legal aid fraud committed suicide, there are a few within the membership still alive who are up to the same embellishment of legal aid claim submissions ....

The Scotsman reports :

Widow agrees to return £1.8m legal aid cash falsely claimed by solicitor

MICHAEL HOWIE HOME AFFAIRS CORRESPONDENT

A SOLICITOR "embellished" claims for legal aid in child welfare cases with false details of sex abuse to fraudulently obtain nearly £2 million, The Scotsman can reveal.

In Scotland's biggest-ever legal aid fraud, James Muir made false claims for public money in hundreds of child protection cases over seven years.

Mr Muir, who kept a low profile in the profession but was regarded as one of the country's most dedicated and experienced specialist child welfare lawyers, committed suicide after the police began investigating.

Details of the case have been kept secret for two years while the Scottish Government's civil recovery unit sought to reclaim the money from his estate.

Yesterday the Scottish Legal Aid Board (SLAB) announced that an agreement had been reached with Mr Muir's family that will see £1.8 million paid back to the public fund.

Last night politicians demanded answers over how such abuse could go undetected for so long.

SLAB claimed the "tragic case" was a one-off and insisted it had improved procedures for checking legal aid claims.

Mr Muir's wife Susan, believed to be a serving police officer, has sold the family's luxury home in Bothwell, Lanarkshire, to help pay back the money.

Mr Muir, 45, who ran his practice from his home, worked mainly as a custodian, or "safeguarder", for children and minors too young to manage their own affairs or represent themselves in court.

The Scotsman can reveal that from 1999 until 2005, he made false claims for legal aid in several hundred child welfare cases. At the outset, he was claiming an average of around £1,000 per case, but by the time he was caught, this had risen to £10,000. To justify the soaring claims, he "embellished" detailed application forms to the legal aid board with fabricated details of sex abuse. He even invented statements between social workers and police officers.

The fraud came to light after legal aid staff noticed his payments were steadily increasing.

Strathclyde Police obtained a warrant to search Mr Muir's home and office on 20 April, 2005. Later the same day his body was discovered on a railway line.

A source last night said: "Mr Muir had a niche market, being the only dedicated children's lawyer in the area. All the children existed in his claims, but he made up the grounds of referral from the Children's Reporter and they all, in effect, became sex abuse cases. This allowed him to embellish claims and increase the amount paid."

Another lawyer, who did not want to be named, added: "If this had been going on in the criminal court, people would have quickly suspected something was going on. But he was basically doing this work on his own and no-one asked questions.

"Everyone thought he was simply working and doing well for himself. When it came to light, I think the legal aid board was embarrassed and furious in equal measure."

Mr Muir was known to have taken on a large workload and on occasions carried out work he did not claim for.

Now, following a long and detailed investigation by the legal aid board and months of negotiations, it is understood that his widow has agreed to give back all £1.8m that her husband received in legal aid over the seven years.

Bill Aitken, the Conservatives' justice spokesman, said: "Little can be done to protect the legal aid fund from deliberate theft but the obvious question is: how was this allowed to go on so long without someone noticing?"

A spokesman for SLAB said steps had been taken to prevent such fraud going undetected for so long. The body's investigation unit had been beefed up with new staff, with closer attention now paid to claims from lawyers working in specialised areas.

Pauline McNeill, Labour's justice spokeswoman, said: "It's important that lessons are learned from this case."

LEGAL AID BILL COSTS TAXPAYERS MORE THAN £150 MILLION

SCOTLAND'S legal aid bill cost the public purse more than £150 million last year.

Criminal cases accounted for nearly two-thirds of the total, but the civil legal aid bill also rose, for the first time in three years. Last year's total legal aid bill was 2 per cent up on 2005 and brought spending to the second-highest ever level.

The figures were disclosed yesterday in the annual report of the Scottish Legal Aid Board. It coincided with new proposals from the board and the Scottish Government to change the way solicitors are paid for legal aid in summary - or less serious - cases.

Under the proposals, there will be a "substantial" increase in payments to lawyers in the early stages of a case, with lesser rises for cases going to trial. This is intended to save money overall, as the system is said to favour "not guilty" pleas that are later changed.

The £150 million cost to the taxpayer was made up of £106.6 million on criminal cases, £39 million on civil cases and £4.5 million on children's legal assistance and contempt of court cases.

Over the past five years, total spending has gone up by 11 per cent, or £15 million, mostly because of a £13.6 million rise in the cost of criminal legal aid.

Announcing his intention to introduce the legal aid changes next spring, Kenny MacAskill, the justice secretary, said: "These proposals aim to save time and expense, to avoid wasted effort and to reduce the demands made on victims and witnesses."

Legal aid winners

DONALD Findlay, QC, has topped the list for legal aid payments to advocates, for the second year in a row, receiving £358,400 last year.

The Glasgow-based law firm Ross Harper topped the solicitors' list, also for the second year in a row, at £1.732 million - and 11 other firms of solicitors were paid more than £1 million each. Top-earning solicitor advocate was Iain Paterson of Paterson Bell Solicitors, with £219,300.

Ten advocates each earned more than £200,000 in 2006-7. They are Donald Findlay QC (£358,400), Ian Duguid QC (£321,600), Edgar Prais QC (£272,500), Mhairi Richards QC (£269,800), Paul McBride QC (£237,800), Gordon Jackson (£228,500), Derek Ogg QC (£213,300), Lorenzo Alonzi (£213,100), Ronaldo Renucci (£212,100) and Thomas Ross (£208,600).