SINGAPORE - A veteran lawyer ignored a series of red flags on the "unorthodox" conduct of his conveyancing clerk, who turned out to be a conman, misappropriating about $848,000 from 17 clients.
The fraudster, Sim Tee Peng, later repaid a portion of the money but two of the firm's clients still suffered losses amounting to about $47,669.
On Monday (April 29), Mr Troy Yeo Siew Chye, a lawyer for 36 years, was suspended from practice for four years for failing to properly supervise Sim and breaching other legal profession rules.
Mr Yeo, who was sole proprietor of Troy Yeo & Co, had engaged Sim in July 2011 to help him set up a conveyancing department and introduce clients to him.
Between Aug 31, 2011 and Oct 19, 2011, Sim deposited $448,803 paid by 22 clients for stamp duties into the firm's Office Account, even though the money should be put into a separate account.
In some cases, Sim told Mr Yeo that he had paid upfront for the clients, and submitted forged stamp duty certificates seeking reimbursement from the firm.
Without checking if Sim had actually made advance payment, Mr Yeo duly paid out about $336,676. Mr Yeo also used some of the money for the firm's day-to-day expenses.
Sim then cheated 17 clients out of $848,335 by misleading them into paying stamp duty fees, down payments and legal fees to his personal bank account.
In January 2012, the firm was raided by the Inland Revenue Authority of Singapore, who told Mr Yeo that it was investigating Sim for producing fake stamp duty certificates.
Later that month, the Commercial Affairs Department raided the firm over the conveyancing transactions.
Despite this, the firm continued to accept new conveyancing files brought in by Sim.
After Sim left Mr Yeo's firm, he cheated clients of three other law firms.
Sim was sentenced to more than seven years' jail in 2016.
In 2017, the Attorney-General lodged a complaint to the Law Society against Mr Yeo.
Mr Yeo was found guilty by a disciplinary tribunal in July last year for failing to properly supervise Sim, failing to hold conveyancing money in the designated account, and failing to keep proper accounting records.
The tribunal felt the case was serious enough to be referred to the Court of Three Judges, which has the power to suspend or strike lawyers off the roll.
On Monday, Senior Counsel Kenneth Tan, acting for Mr Yeo, argued that his client was also a victim. Mr Tan said Mr Yeo did put in place a system for proper payments, but Sim went directly to the clients and passed himself off as a lawyer.
He sought a fine or a suspension "on the lower end of the scale".
Mr Abraham Vergis, representing the Law Society, accepted that Sim defrauded Mr Yeo.
However, Sim's crimes could have been easily detected if Mr Yeo had carried out elementary checks, he argued.
Seeking a substantial suspension, Mr Vergis said there were many red flags which should have alerted Mr Yeo that something was amiss.
This included Sim's unconventional method of "paying" for stamp duties, the raids by the authorities, and his willingness to work part-time for Mr Yeo without a salary or commission for six months.