Solicitor fell for 'sob story' con

A lawyer who fell for a bogus investigator's poverty sob story ended up bankrupting her Wigan firm with a £100,000 series of loans the 'detective' never returned.

Friday, 25th August 2017, 4:57 pm
Updated Monday, 11th September 2017, 12:58 pm
Arthur Smith solicitors

Rose Egarr plundered the cash from the accounts of Arthur Smith Solicitors in King Street, eventually causing it to go under.

The company’s failure more than two years ago prompted an investigation by the Solicitors’ Regulation Authority which found the business’s accounts in such a mess that it was difficult to deduce just how much had gone missing.

Egarr, 57, was declared bankrupt earlier this year and is next month to appear before magistrates accused of stealing £200,000 from the practice.

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A Solicitors Disciplinary Tribunal has already found her fitness to practise to be impaired. She was struck off and ordered to pay costs totalling £22,760.

Egarr’s mystery client, named only as MM, had apparently told her that he worked as an undercover detective tackling organised crime, that he had £3.3m, held in a bank account in Holland, and was also owed up to £300,000 by his employers.

But inquiries revealed that the organisation had no idea who MM was and he never paid her a penny back.

A lawyer handed over up to £100,000 to a bogus undercover detective - causing the collapse of her Wigan firm.

An investigation by a legal watchdog revealed that Rose Elizabeth Egarr had misused funds from the client account at Arthur Smith Solicitors, in King Street, to cover the fake officer’s supposed living expenses.

But the Solicitors Disciplinary Tribunal (SDT) was told that the accounts at the Wigan firm were in such disarray that it was difficult to determine how much actually went missing from the company, which was closed down by the authorities in May 2015.

Her mystery client, named only as MM, had apparently told Egarr that he worked for the Eastern Regional Special Operations Unit (ERSOU), tackling organised crime in Bedfordshire, Cambridge, Essex, Norfolk and Suffolk.

And he assured the solicitor that he had £3.3m, held in a bank account in Holland, and was also owed up to £300,000 by ERSOU, which had been held up, the SDT was told.

Egarr, of Chantry Close, Westhoughton, has also been charged with stealing £200,000 from the practice and is due to appear before Bolton magistrates on September 5, following an inquiry by the North West serious and organised crime squad and Cumbria Police.

The 57-year-old, who was made bankrupt in January, was struck off after an SDT hearing found her fitness to practise to be impaired. She was also ordered to pay costs totalling £22,760.

She was found to have been dishonest in making the cash transfers, broken accounting rules and to have attempted to mislead a Solicitors’ Regulation Authority inquiry.

Announcing the decision, panel chairman Ashok Ghosh said that Egarr had made no efforts to make good any of the losses and she only had her previously unblemished career to offer in her defence.

Mr Ghosh noted that “until the bitter end (she) was insisting the money would be repaid by the client. But there was no evidence that she had genuine insight into what had occurred,” he added.

She was not represented at the London hearing and had not engaged with the proceedings after giving an initial statement.In her account, she told the regulator that she had agreed to lend ‘MM’ to money because he was “desperate”, as his funds appeared to be tied up in Holland or the outstanding payment from ERSOU.

But the hearing was told that, during her dealings with the supposed officer, he never used police authorised e-mails. The language, grammar and spelling used in the correspondence was also said to be “poor”.

And when a Solicitors’ Regulation Authority investigator contacted ERSOU, a genuine unit, officers there claimed to have never heard of ‘MM’ or had any dealings with him.

Her finance officer Andrew Walsh was also hauled before the regulator after it was found he had authorised a number of the transfers to ‘MM’.

Walsh told the SDT panel that he became increasingly concerned over the hold which ‘MM’ had over Egarr. But she assured him that she was an experienced lawyer and trusted the client.

He said that even when cashflow became tight at the firm, the payments continued and he eventually resigned in January 2015, blaming her “increasingly erratic and aloof management style”.

Walsh, who admitted to breaching accounting rules, was fined £8,000 and ordered to pay £5,960 costs.l Egarr has been charged alongside two Cumbrian businessmen, who have been accused of fraud in relation to an attraction near Cark.The investigation centred on a suspicious fire at Ducky’s Park Farm at Flookburgh last July.Michael Anthony Milner, 48, of Grange-over-Sands, has appeared before Barrow magistrates, accused of arson, fraud and breaching a company director disqualification. Malcolm James Keith, 44, of Flookburgh, was charged with fraud. The pair will appear at Carlise Crown Court on September 1.