Fraudulent Funds Fund Gambling

Greedy Paralegal Bit the Hand That Fed Him In an Audacious Fraud to Fun Gambling

Working in a law firm is a tremendous privilege and an honour, and with it comes great responsibility. However, some people forget this, are overcome by greed, succumb to temptation, and they opt to bite the hand that feeds them. An example of this was on 16 May 2021 when concerning news emerged of a paralegal who was hot water having been sentenced to just under three and a half years imprisonment by Manchester Crown Court for committing a major fraud against the firm. 

The paralegal worked in the road traffic team of the firm from around 2016 and everything was going well in the employment relationship. However, the paralegal was on the radar of the firm when he seemingly by a human error sent monies from the firm bank account to an incorrect bank account. At the time the firm disciplined the paralegal and he attributed his behavior to two interlinked factors: 

• on-going mental health problems
• an honest mistake and
• promised to improve. 

This appeared to be the end of the matter. However, the paralegal’s caseload was taken over in June 2019 and while his files were being reviewed, the firm made several alarming discoveries that required further investigation. During the investigation, they found evidence that the bank account the paralegal had paid the monies into in 2016 supposedly in error was in fact in his name and he controlled it.

The firm investigated the matter further and found more damning evidence that the now-former paralegal had the seeming audacity to permit six transactions to take place in the previous three years between September 2017 and May 2019. The total amount appeared to be just shy of £35,000. 

Was This The End of the Story?

This turned out to be just the beginning. When more detective work was carried out evidence emerged that the paralegal had been making a large number of payments to several bank accounts. The final total appeared to be just short of a seemingly staggering £450,000.

What Motivated This Behaviour?

Given the privileged position, the paralegal found himself in his conduct appears inexplicable, unforgivable, and dishonest. The investigation followed the money through the bank accounts and it discovered that the monies had been paid to an internet website that specialized in the provision of gambling-related services. The real motivation behind the enormous amounts of fraudulent transactions appears to be to fund a colossal gambling addiction to which he had seemingly succumbed and resorted to this behaviour. Greater Manchester Police who carried out the criminal investigation was seemingly damning. Detective Constable Wilkinson did not mince her words when she described the paralegal’s conduct as: 

• criminal
• dishonest
• shameless and 
• brash

in inflicting severe financial harm on the firm and its clients. He abused the position he held where he had access to a significant amount of money.

The old saying which comes to mind is ‘wherever I lay my hat that’s my home. Well, the now-former paralegal will have to live by the phrase as the judge imposed a prison sentence upon him. 

Lessons Learned?

Lawyers need to be taking note of this case. They are in a privileged position of responsibility with access to enormous sums of money. Lawyers should remember that: 

• this money does not belong to the lawyer
• the money is client money 
• they are under a duty to act with honesty and integrity in the provision of legal services and
• not to divert client monies for gambling activities. 

ASSESSING FIRMS

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THE ARTICLE WAS WRITTEN USING THE FOLLOWING SOURCES 

[SOURCE 1] Scheerhour, John – Paralegal addicted to gambling stole £438k from a law firm – Manchester Evening News - Paralegal addicted to gambling stole £438k from a law firm - Manchester Evening News

[SOURCE 2] Hyde, John – Fraudster paralegal took £438,000 from firm to spend on gambling – Law Society Gazette - 16 May 2022 - Fraudster paralegal took £438,000 from firm to spend on gambling | News | Law Gazette

[SOURCE 3] Solicitors Code of Conduct - SRA | Code of Conduct for Solicitors, RELs, and RFLs | Solicitors Regulation Authority

[SOURCE 4] Rose, Neil – Paralegal jailed for stealing £438k from law firm to feed gambling habit – Legal Futures - Paralegal jailed for stealing £438k from law firm to feed gambling habit - Legal Futures

[SOURCE 5] Solicitors Accounts Rules - SRA | Accounts Rules | Solicitors Regulation Authority