An accountant at a solicitors' firm has been thrown out of the English ICA and ordered to pay £6,327 costs after admitting he failed to prevent serious misuse of millions of pounds of clients' money.
An institute disciplinary tribunal found that Douglas William Stevenson also failed to take action when concerns were expressed by staff and failed to inform senior partners at the firm, charges which he denied.
Stevenson was employed as financial controller by solicitor Graham Durnford Ford who was jailed for 10 years last December after £9.5m was taken from clients’ accounts at his Bexhill-on-Sea firm.
KPMG is currently considering appealing against a £7.4m claim from the Law Society which alleged annual accountants reports on Durnford Ford’s affairs were negligent.
The findings said: ‘He failed to expose the activities of the senior partner. He also failed to report concerns, which had been expressed to him, to any person who could have been expected to pursue further investigations and, in particular, he failed to report the irregularities to any of the other partners of the firm.’
He joined the firm as a systems accountant in September 1986, but was financial controller when it went bankrupt in 1992, resulting in compensation claims against the Law Society for £9.5m. During a solicitors’ disciplinary tribunal in 1997, an order was issued banning other solicitors from employing Stevenson.
He had control over the firm’s billing procedure and during his time in charge fictitious bills, instigated by Durnford Ford, were used to transfer clients’ money into office accounts. The accounts of 484 clients were tampered with involving 2,500 fictitious bills.
The English ICA tribunal heard that during the course of investigations, it was discovered blank, previously signed forms were held in the accounts department to help move money from client accounts to office accounts. Stevenson admitted knowing this and that it was wrong.
The institute’s findings, issued in January, conclude: ‘The acts and defaults of the defendant as the financial controller of the firm brought discredit on himself, the institute and the profession of accountancy.’
KPMG faces negligence action over solicitor fraud scandal
