In a “flagrant breach of trust”, two solicitors have been jailed after admitting that they siphoned more than £1 million from their clients’ accounts in 12 months to pay their overheads.
Kenneth Hunt’s legal firm Hunt Kidd LLP were caught in the “perfect storm” when the global economic crisis struck and the Government launched a bail-out package for the stricken Northern Rock, reported
.
Hunt, 65, an expert in property development issues, had built up a respected reputation with a portfolio of business ventures that included involvement in building the Copthorne Hotel, the development of Newcastle’s Quayside and helping to develop the Haymarket Hub.
The company specialised in commercial development, residential property, employment law, property investment and landlord and tenant issues.
However, when the banks started to restrict his finances, by slashing the firm’s overdraft to £250,000 and recalling a £150,000 loan, his legal empire looked set to crumble.
Along with his partner at the firm, Barbara Gayton, 54, he refused to close the practice and instead slimmed down their workforce and cut the company’s overheads by 50 per cent.
But in a “stratospheric fall from grace” and in a bid to save the ailing practice, they began to transfer their clients’ cash into the company’s account over a 12-month period.
Hunt took lump sums of £20,000 and £40,000 from the firm’s clients’ account to ensure his practice could keep functioning. He and Gayton transferred a total of more than £1,049,000 from their clients without their knowledge.
It was only when the Solicitors Regulation Authority (SRA) called the practice to inform the partners they were launching an investigation into irregularities that the full scale of their crime came to light. Hunt claimed to have cut his earnings to £3,000 a month, but questions were raised over the involvement of his wife, Geraldine Hunt, in the business.
Cashiers at the company said she worked just one day each week after retiring in 2004 but accounts showed she was paid a lump sum of £30,000.
They were charged with fraud last year. Hunt Kidd LLP was closed down by the SRA in November 2009 after an investigation was launched into “suspected financial irregularities” involving the two senior partners.
The matter was referred from the Solicitors Regulatory Authority to the Police and the Detective Sergeant who initially led the investigation was
, who has since retired from the Police and is now forensic services manager, dealing with all aspects of fraud investigations, at
UNW chartered accountants in Newcastle upon Tyne.
B&C got in touch with Phil to get his views on the sentencing in this case. He said: “The Hunt Kidd case was one of several that the Northumbria Police fraud squad were investigating which involved solicitors and other professionals who clearly thought that they were above the law and would not be caught out. The common factor in all these cases was greed.
“The guilty pleas reflect the professional and thorough investigation carried out by the officers concerned in what was a protracted and complex investigation. The case will undoubtedly send out a clear message to solicitors and other professionals that they are not above the law and involvement in fraud will end in severe repercussions.”
Hunt and Gayton were arrested and saw their practice close following a 12-month fraud operation in which they conned their clients between October 2008 and October 2009, an Action Fraud
stated in March 2012.
At a Newcastle Crown Court hearing, Judge Guy Whitburn heard that Hunt was diagnosed with cancer and his poor health had “overshadowed” his financial difficulties, and that Gayton was suffering from crippling bouts of depression.
Robert Smith, defending Gayton, said: “She was psychologically unwell at the time of these events. Because of her mental state she was not well enough to challenge Mr Hunt.”
Hunt and Gayton were jailed for four years and two years respectively after both admitted to fraud by abuse of position in the con.
Leave a comment