Solicitor who had €1.9m deficit to halt practice

A solicitor alleged to have concealed substantial deficits in client accounts has undertaken before the High Court not to practice.

The accounts of solicitor Ciaran Callan at one stage this year showed an alleged deficit of €1.9 million.

He had recently lodged monies which, his solicitor told the Law Society last week, had paid that amount off and left an apparent surplus.

However, because of concerns that the precise amount of the deficit remained unknown in light of it being conceded that books of account were not up to date, the Law Society decided to seek account-freezing and other orders.

Several orders were made by consent yesterday when proceedings by the society against Mr Callan, practising as Callan & Company Solicitors, Riverbank House, Dodder Park Drive, Dublin, came briefly before the president of the High Court, Mr Justice Richard Johnson.

Shane Murphy SC, for the society, said his client wished to have the case heard in public and there was no objection to that.

He said that, on consent, the court could make a number of orders including that no bank could make payments out of any account in Mr Callan's name, or that of his firm, without permission of the court and restraining Mr Callan from disposing of assets.

In an affidavit in the case, Séamus McGrath of the society's regulation department said Mr Callan's solicitor, Seán Sexton, had phoned on October 15th last informing him Mr Callan had told Mr Sexton there was a deficit in his client account which had been concealed by a system of "teeming and lading" (hiding the loss of one client's monies by replacing it with monies form another client).

Mr Sexton said a meeting the previous week had led to a disclosure by Mr Callan of a €119,000 deficit on the client account but, after Mr Callan had provided explanations for various matters, the deficit was some €900,000.

Mr Sexton had referred to the books of account being considerably in arrears and only written up to April 30th last and that a reporting accountant had been "laying siege" to Mr Callan to get the books and records up to date.

Mr Sexton had said he had advised Mr Callan to get the missing money into the client account, believed Mr Callan did so on October 15th and also instructed Mr Callan to advise the society of the deficit.

Mr Callan and Mr Sexton later attended a meeting with the society which, as a result, decided to hold a special meeting on November 15th to deal with the case.

On November 12th, Mr McGrath said Mr Sexton reported that the deficit had now risen to €1.9 million, that monies had been lodged to reduce it, but he was not sure of the full extent of the deficit.

The society then convened an emergency meeting on November 13th last.

In another affidavit, Mary Devereux, an investigating accountant with the society, said she was appointed on April 10th, 2006, to attend at Mr Callan's practice and investigate whether there was compliance with solicitors' regulations.

She had first investigated his practice over six days in February and March 2007 and prepared a report for the society on March 15th, 2007.

The main finding of her report was that the inspection could not be completed because the books of account were not written up fully since April 30th, 2006. She had uncovered many incidents of non-recording of payments in the accounts.

She said the society was told on a number of occasions that the books of account would be written up but, by October 18th last, proper books of account were not available and it was not possible to state what client liabilities amounted to.