A senior solicitor and part-time judge has been struck off after admitting siphoning off almost £300,000 from two firms where he worked over 16 years. 

Sean Michael Callaghan’s misconduct included misappropriating funds belonging to clients or his employers and providing false information to both. He was a part-time deputy district judge during this period.

The Solicitors Disciplinary Tribunal heard that Callaghan had money transferred directly to him or to companies where he was a director, first while working for Essex firm BTMK Solicitors and then when he moved to another Essex firm, Palmers Solicitors, as head of commercial property.

Rubber-stamping an agreed outcome, the regulator said that while Callaghan's conduct would be viewed as ‘deplorable’ for any solicitor, it was ‘particularly egregious’ for someone in a judicial role.

The tribunal heard that the misconduct emerged after Palmers alerted the SRA that Callaghan had invoiced a client omitting the firm’s bank account details. When the client requested account details, Callaghan provided those of his own account. He was dismissed in 2020.

SRA investigators found that a total of £37,488 had been misappropriated by Callaghan in the year he worked at Palmers.

BTMK, where Callaghan worked for 15 years, was then contacted. A further ‘doctored’ invoice was found directing clients to pay into an account relating to Callaghan.

When Callaghan's actions were uncovered, he sent a letter to his former firm saying he was ‘having a breakdown’ at the time and his ‘mind was in turmoil’. He went on to explain that he did the same at Palmers, saying he was ‘pushing a self-destruct button’.

The tribunal heard that Callaghan made a payment of almost £105,000 to BTMK after civil proceedings were commenced by the firm. A further report was made to Essex Police, with an investigation ongoing.

SRA investigators eventually calculated that transactions worth a total of £248,000 had taken place where money left BTMK’s client account and was paid to an account held by Callaghan in the name of companies linked to him.

Lawyers for Callaghan responded to the SRA in 2020 saying he accepted ‘in unequivocal terms that he misappropriated monies’ from both office and client accounts of both firms where he worked. It was accepted he would inevitably be struck off and the response asked for the matter to be resolved as part of an agreed outcome.

The tribunal said Callaghan's conduct involved ‘long-term and high value misappropriation of monies’ belonging to his employers and their clients. He made false representations to clients to create a ‘surplus’ in the client accounts and then transferred monies from them. He deceived the firms and clients about money they owed or were due.

Callaghan offered no mitigation. He agreed to pay £1,500 costs – the figure taking account of his bankruptcy and limited income.

According to an Insolvency Service notice from earlier this year, Callaghan, 60, was banned from owning a business for 13 years. The notice said he had used the funds misappropriated from his employers to support his personal living expenses and had applied for his own bankruptcy in April 2021 with liabilities of £1.25m.

Topics