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An object lesson in failed KYC / CDD

FCRO Subsection: 
Nigel Morris-Cotterill

The conviction of a solicitor and his practice manager on fraud charges is bad enough.

But what's worse is that the practice manager seems to have been able to get into positions of trust despite a demonstrably untrustworthy history.

In January this year, Syed Gous Ali, then 41, was jailed for four months on charges of tax fraud.

He's a recidivist fraudster. The court was told:

a) despite working full time at a Solicitors' office, Ali began claiming housing benefit and tax credits in 2010.

b) in mid 2011 he notified the local council that his girlfriend had moved in but that she had no income and limited capital. She was claiming JobSeekers' Allowance.

c) in 2012, he was convicted of handling stolen goods and received a suspended jail sentence.

d) in early 2013, Ali was convicted of the offence of abstraction (theft) of electricity and sentenced to a period of community service.

e) in early 2013, Ali accepted a nomination as a candidate for the Labour Party and ran as a candidate in the election that year. He was unsuccessful. In late 2013, he was convicted of failing to declare a criminal conviction and received a second suspended jail sentence. That meant he was serving two discrete suspending sentences when

f) In late 2013, a notice was sent to Ali requiring him to inform the local council if the household's financial position had changed. In fact, his girlfriend modified her claim for JobSeekers' Allowance.He falsely stated that the financial position was unchanged.

That's not the end of the story.

On 1 June this year, at Leicester Crown Court, Ali appeared with his former employer, Hashok Parmar, who practised as a sole practitioner under the style "Sterling Law, Solicitors."

Despite his criminal history, Ali was permitted to be the practice manager for Sterling Law. The position of practice manager is not, of itself a controlled function but some of the activities - such as compliance, may be. Ali was not a solicitor.

In summary (the full case study will be considered when/if the judgment is available), Parmar and Ali entered into a fraudulent scheme to identify rented properties and to sell them without the knowledge of their owners. The totals involved were in the region of GBP3 million and the amount for which money laundering charges were brought (the benefit) was GBP240,000. The laundering was done using overseas accounts but the money came back to the UK pretty quickly and was identified.

That's a big step up from nicking electricity.

Further offences were foiled by alert lawyers in transactions.

They were both sentenced to six years in jail.

To put this into Ali's timeline - these offences were in 2015.

Parmar was suspended from practice in 2017, on unrelated professional charges.

The question is how Ali managed to avoid scrutiny over an extended period and was able to work his way into positions of trust.

One way, it has been suggested, is that he joined the Labour Party and offered to be an adviser of some sort (quite what isn't clear). Having built up his credibility, he was then able to attempt to become a councillor. And no one, within the Party or in other authorities, checked him out until after the election.

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