Solicitor’s conviction for money laundering overturned – A solicitor was found not to have made false declarations on the certificate of title despite failing to disclose his financial interest in the transaction, resulting in his convictions for money laundering and mortgage fraud being overturned.

Mr Cornelius undertook conveyancing for a firm in Swansea and also invested personally in property. In 2008 he undertook a number of property transactions where he provided bridging finance to the purchasers, receiving both his salary from the law firm for his work and a direct payment from the purchaser.

The law firm and the Building Society lenders were unaware of his financing involvement in the transactions. There was clear evidence that the Building Society would not have advanced the funds if they had been so aware.

The police investigated one of the client’s involved in these transactions and during a review of the files, the conduct of Mr Cornelius was called into question.

He was arrested and served with a restraint order, which he later breached by selling a car covered by the order. Mr Cornelius pleaded guilty for perverting the course of justice with respect to the breach of the restraint order. He was also charged with fraud and with transferring the proceeds of crime in relation to the property transactions.

The prosecution case was that Mr Cornelius acted dishonestly in the representations made to the Building Society that the property was unencumbered and that no member of the firm had an interest in the transaction as a mortgagor, despite the fact that he had made a loan to the purchaser.

Mr Cornelius’ case was that he had not been dishonest, as he never intended to enforce the declaration of trust and the property would be unencumbered as soon as the bridging loan was paid.

The court held that the representations in the Certificate of Title were not false as:

1. the building society acquired a good and marketable title free from the interest created by the trust given to the solicitor
2. the solicitor was a lender but not a mortgagor.
3. The court noted that false representations had been made in relation to the firm’s accounts, but that the case had not been put to the jury on this basis. They held it was not appropriate to substitute a charge for attempt to commit fraud nor was it appropriate to order a re-trial.

However in light of the solicitor’s conviction for perverting the course of justice, the court thought it would be unlikely that he would be permitted to practice again.

Read the full judgement

http://www.bailii.org/ew/cases/EWCA/Crim/2012/500.html

http://www.lawsociety.org.uk/newsandevents/news/view=newsarticle.law?NEWSID=446368