DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS

Transcription

1 DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS REASONS FOR DECISION In the matter of: Mr Mikiel Aurokium Heard on: Friday 16 February 2018 Location: The Adelphi, 1-11 John Adam Street, London, WC2N 6AU Committee: Mr Maurice Cohen, Chairman Ms Andrea White, Accountant Ms Eileen Skinner, Lay Legal Adviser: Mrs Fiona Barnett Persons present and capacity: Ms Emily Healy ACCA Case Presenter Ms Poonam Patel ACCA Hearings Officer Summary: Exclusion with immediate effect and Mr Aurokium to pay ACCA in the sum of 7, SERVICE OF PAPERS 1. The Member was neither present nor represented at the Hearing. 2. The Committee had before it a Service bundle numbering pages 1 to 13, and Additional Service bundles numbering pages 14 to 18 and 19 to The documents within the bundle demonstrated that on 11 January 2018, ACCA sent the Notice of Hearing and accompanying documentation by Special Delivery post to Mr Aurokium s address as shown on ACCA s

2 register. These were also sent by to Mr Aurokium s updated address, and to his Solicitor. 4. The Committee was therefore satisfied that the appropriate period of Notice has been given and that the Notice has been served in accordance with Regulations 10(1) and 22(1)(a) of the Complaints and Disciplinary Regulations 2018, ( CDR ). PROCEEDING IN ABSENCE 5. Ms Healy invited the Committee to proceed in Mr Aurokium s absence. She referred the Committee to correspondence from Mr Aurokium s Solicitor, and submitted that Mr Aurokium has waived his right to attend, has sought no Adjournment, and that adjourning the hearing would serve no useful purpose. 6. The Committee accepted the advice of the Legal Adviser. In reaching its decision whether to proceed, it bore in mind that whilst it has a discretion to commence and conduct proceedings in the absence of the Member, it should exercise that discretion with the utmost care and caution. The Committee had regard to the factors set out by Lord Bingham in the case of R v Jones 2002 UKHL 5, and the case of General Medical Council v Adeogba and Visvardis 2016 EWCA Civ The Committee considered the dated 9 February 2018, which was sent to ACCA by Mr Paul Angel of Noble Solicitors. The subject line of that referred to, Hearing 16 February 2018, and Mr Angel stated in the Please kindly note that Mr Aurokium will not be attending nor will be represented at the hearing. He does not contest the application. Indeed, he reminds the Association that he ceased to subscribe as a member before the conviction. 8. The Committee was satisfied from the content of the that Mr Aurokium was aware of the Hearing and has waived his right to be represented. It was clear that no Adjournment was being sought by him or on his behalf, and the

3 Committee therefore concluded that an adjournment would serve no useful purpose. 9. The Committee also had regard to the public interest in commencing and concluding Regulatory matters expeditiously. In the light of these factors, it decided that it was fair and reasonable to proceed in the absence of Mr Aurokium. ALLEGATIONS Allegation 1 (a) On 24 April 2017 Mr Mikiel Aurokium was convicted of fraud by abuse of position contrary to section 4 of the Fraud Act 2006 at the Crown Court sitting at Southwark, which is discreditable to the Association or the accountancy profession; (b) By reason of his conduct at 1(a) above, Mr Mikiel Aurokium is liable to disciplinary action pursuant to bye-law 8(a)(ix). Allegation 2 (a) Mr Mikiel Aurokium failed to bring promptly to the attention of ACCA that he may have become liable to disciplinary action by reason of having been convicted on 24 April 2017, pursuant to bye-law 10(b). (b) By reason of his conduct at 2(a) above, Mr Mikiel Aurokium is: (i) Guilty of misconduct pursuant to bye-law 8(a)(i); or (ii) Liable to disciplinary action pursuant to bye-law 8 (a)(iii).

4 BRIEF BACKGROUND 10. Mr Aurokium has been an ACCA Member since 1996, and became a Fellow of ACCA in He was employed as an Accountant by Company A, a family jewellery business, for a period of 15 years. In the course of this employment, Mr Aurokium had access to the Company Bank Accounts and cheque books and was authorised to write cheques up to the value of 2, and subsequently to 3, In late 2014, one of Company A s owners discovered that Mr Aurokium had been issued with a business credit card, and that the statements for this card were being sent to Mr Aurokium directly. The owner checked the Company Accounts and discovered that Mr Aurokium had been stealing monies from the business, using the Company Bank Account to conduct personal transactions, and to withdraw cash for his own use. 13. The matter was reported to the Police in February 2015, resulting in criminal charges. Civil proceedings were also commenced against Mr Aurokium. 14. On 24 April 2017, Mr Aurokium entered a guilty plea at Southwark Crown Court to a charge of fraud by abuse of position to a value of 300,000. He was sentenced to 42 months imprisonment. 15. In considering this matter, the Committee had before it papers numbering pages A to J and 1 to 19, and Additional bundles with pages numbering 21 to 40 and 41 to 69. DECISION ON ALLEGATIONS AND REASONS 16. The Committee noted that Mr Aurokium s Solicitor said in his correspondence of 9 February 2018 that Mr Aurokium, does not contest the application.

5 17. However, given that there was no specific response from Mr Aurokium or his Solicitor to the matters set out in the Allegations, the Committee decided that it was fair to approach these as not admitted. Further, the Committee was also advised that even though Mr Aurokium ceased to subscribe to ACCA in November 2014, he remains a Member for the purposes of these disciplinary matters. 18. In reaching its decisions on the Allegations, the Committee accepted the advice of the Legal Adviser. It reminded itself that the burden of proof rests with ACCA, and that the standard of proof is the civil standard, which is the balance of probabilities. Allegation 1(a) - found proved 19. The Committee had regard to the Certificate of Conviction from Southwark Crown Court which confirmed that Mr Aurokium was convicted of fraud by abuse of position on 24 April In accordance with Bye-law 8(e), this certificate of conviction is conclusive proof of the conviction. The Committee was therefore satisfied that Mr Aurokium was convicted of the offences set out in Allegation 1(a). 20. The Committee then considered whether the conviction was discreditable to the Association or to the Accountancy profession. It considered the sentencing remarks of His Honour Judge Griffiths, who said that Mr Aurokium had committed a high culpability offence, had abused his position of trust and responsibility, and that he did so over a decade. He imposed an immediate custodial sentence of 42 months imprisonment. 21. The Committee was in no doubt that Mr Aurokium s actions amounted to a significant breach of trust and abuse of his position as an Accountant. He repeatedly betrayed the trust placed in him by his Employers over a sustained period of time and failed, throughout that period, to act with the integrity expected of an Accountant. It was apparent from the judge s remarks during the sentencing hearing that Mr Aurokium had spent the money on personal items, such as Football Season tickets and a Jaguar car. His actions were so serious as to result in an immediate and lengthy prison sentence.

6 22. The Committee was satisfied that such conduct brought the profession into disrepute, and was discreditable both to ACCA and the Accountancy profession. It therefore found Allegation 1(a) proved. Allegation 1(b) found proved 23. Having found allegation 1(a) proved, it follows that Mr Aurokium is liable to disciplinary action pursuant to Byelaw 8(a)(ix). Allegation 2(a) found proved 24. Byelaw 10(b) places an obligation on every ACCA Member to bring promptly to the attention of the Secretary any facts or matters indicating that the Member may have become liable to disciplinary action. 25. The Committee was provided with a statement dated 10 August 2017 from a Member Support Administrator at ACCA, Glasgow. The Member Support Administrator confirmed that they had performed a search of ACCA s systems, and could find no record of any communication about Mr Aurokium s conviction, or any documentation relating to the notification of any conviction or caution. 26. The Committee noted that the statement of the Member Support Administrator was not challenged by or on behalf of Mr Aurokium. It therefore accepted his evidence, and found that Mr Aurokium had not complied with his obligation to bring his conviction, (a matter which could render him liable to disciplinary action) promptly to the attention of ACCA. Allegation 2 (a) was found proved. Allegation 2(b)(i) misconduct found 27. The Committee then considered whether Mr Aurokium is guilty of misconduct, by reason of his failure to promptly inform ACCA that he may have become liable to disciplinary action. This is a matter for the Committee in its own judgment.

7 28. Mr Aurokium s arrest for these matters should, in the Committee s view, have alerted him to the fact that this was a matter which could impact on his ACCA Membership. His failure to inform the Regulator of the arrest and/or charge and/or conviction deprived the Regulator of the opportunity to investigate this matter and to take immediate action, if appropriate to do so. This in turn placed the public at risk of harm and could have damaged the confidence which the public places in the Regulator. 29. The Committee was in no doubt that Mr Aurokium s failure to notify ACCA promptly of his arrest/charge/conviction was a serious falling short of the standards expected of him. It brought discredit upon him, upon the Regulator and the Profession as a whole. The Committee was satisfied that these matters amounted to misconduct. Allegation 2(b)(ii) 30. In the light of the Committee s findings that Mr Aurokium was guilty of misconduct, the Committee did not go on to consider whether he was liable to disciplinary action pursuant to Bye-law 8(a)(iii). SANCTION AND REASONS 31. The Committee accepted the advice of the Legal Adviser who referred it to ACCA s Guidance on Disciplinary Sanctions, with effect from 1 January 2018, (the Guidance). It bore in mind that it must act proportionately at this stage, balancing the Member s interests against the public interest, which includes protection of the public, the maintenance of public confidence in the Accountancy profession and the need to maintain proper standards of conduct and behaviour. 32. Before deciding whether to impose any sanction, the Committee considered the seriousness of the conduct found proved. The Committee was satisfied that as the convictions were for matters of dishonesty, involved a breach of trust and were not brought promptly to ACCA s attention, the matters should be categorised as very serious.

8 33. The Committee also identified a number of aggravating factors as follows: Mr Aurokium s employers had put their trust in him; he had breached that trust deliberately and persistently over a sustained period of time and his actions had caused financial loss to the Company and emotional harm to the owners of the Company. The Committee s decided that Mr Aurokium lacked insight into his wrongdoing. 34. In deciding whether there were any mitigating factors, the Committee considered the letter, dated 12 September 2017, from Noble Solicitors. They set out the background to the offending and explained that in the civil proceedings, Mr Aurokium had repaid 300,000 (representing the loss to the Company), and 125,000 in costs and interest on that sum. He also said that Mr Aurokium had pleaded guilty in the criminal proceedings and was a longstanding ACCA Member with a previously good record. The Committee accepted that these factors amounted to mitigation, albeit it noted that he entered his guilty plea late on in the criminal proceedings. 35. The Committee first considered whether to conclude this case without taking further action but decided that to do so was not in the public interest nor would it protect the public, given the nature and seriousness of the convictions and Mr Aurokium s failure to promptly bring these matters to ACCA s attention. 36. The Committee next considered whether an Admonishment would be an appropriate and proportionate sanction. It decided that an Admonishment was not a sufficient sanction, given that these matters were very serious. It would not meet the public interest. 37. The Committee considered whether a Reprimand would be an appropriate and proportionate sanction. It decided that this also would not be sufficient and proportionate given the seriousness of the conviction. The Guidance makes it clear that a Reprimand would usually be applied in situations where the conduct is of a minor nature, which is not the case here. 38. The Committee next considered a Severe Reprimand and had regard to the factors set out in paragraph C4 of the Guidance. It additionally had regard to paragraphs E1 in respect of convictions, E2 in respect of dishonesty, and E3

9 in respect of seriousness. It recognised that Mr Aurokium had a previously good record, but was not satisfied that any of the other factors set out which would support this sanction were applicable here. 39. The fraud had been intentional and had caused financial and emotional harm to Mr Aurokium s employers; the conduct was not isolated in nature, but was a persistent course of conduct over a prolonged period of time. Mr Aurokium did not inform ACCA about his arrest/conviction or charge, had not shown any significant insight into the seriousness of his offending, nor had he made any expression of regret or remorse. The Committee reminded itself that whilst there was some mitigation, (as outlined above), this must always be weighed against the aggravating factors and considered against the backdrop of the purpose of a disciplinary sanction. It decided, having balanced all the relevant factors, that a Severe Reprimand would not be a sufficient sanction to protect the public, maintain public confidence in the profession and to declare and uphold proper standards of conduct and behaviour. 40. The Committee then considered Exclusion and had regard to paragraph C5 of the Guidance. It was satisfied that Mr Aurokium s conviction for an offence of dishonesty and his failure to bring this matter promptly to ACCA s attention were serious departures from the standards expected of an ACCA Member. His actions caused financial loss and emotional harm to his Employers and resulted in a criminal conviction with a lengthy custodial sentence. Mr Aurokium had abused the trust placed in him by his employers, acted dishonestly, and he had done so repeatedly over many years. Furthermore, his actions must have been pre-meditated. 41. Although Mr Aurokium had admitted his actions in the criminal proceedings and had a previously good Regulatory record with ACCA, the Committee had no difficulty in deciding, having balanced the mitigating and aggravating factors, that his behaviour was fundamentally incompatible with continued Membership of ACCA. Honesty and integrity are fundamental tenets of the profession and Mr Aurokium had breached these fundamental tenets repeatedly.

10 42. Taking into account the seriousness of the case and balancing the interests of Mr Aurokium, the interests of ACCA and the public interest, the Committee concluded that Exclusion was the only appropriate and proportionate sanction in the circumstances of this case. Any sanction less than Exclusion would not ensure that the public was protected, that public confidence in the profession and ACCA was maintained, and that proper standards of conduct were upheld. 43. The Committee s decision to exclude Mr Aurokium was also consistent with the principle set out by Newman J in the case of Council for Healthcare Regulatory Excellence v (1) General Dental Council and (2) Fleischmann, 2005 EWHC 87 (Admin), in which Newman J said: As a general principle, where a practitioner has been convicted of a serious criminal offence or offences he should not be permitted to resume his practice until he has satisfactorily completed his sentence. Only circumstances which plainly justify a different course should permit otherwise 44. The Committee also decided that Mr Aurokium should not be permitted to reapply for ACCA Membership for a period of 5 years. Its view was that given the seriousness of the case and all the aggravating factors it identified, any Exclusion for a period of less than five years would not serve to maintain public confidence in the profession and the Regulator, and would not be sufficient to declare and uphold proper standards of conduct and behaviour, as expected of an Accountant. Any future application for readmission after five years will be placed before the Admissions and Licensing Committee and will not be granted automatically. COSTS AND REASONS 45. Ms Healy, on behalf of ACCA, referred the Committee to additional papers numbering pages 70 to 71 and 72 to 76 which set out the details of the costs incurred by ACCA. She invited the Committee to make a costs order in the sum of 9,

11 46. The Committee had received no response from Mr Aurokium or his representative on his behalf in relation to the issue of costs. However, given that the costs included an amount for a full day hearing, and this hearing had taken up less than a full day, the Committee decided that it would be reasonable to reduce the costs to reflect this. 47. The Committee ordered that Mr Aurokium pay ACCA costs in the sum of EFFECTIVE DATE OF ORDER 48. The Committee directed that, given the seriousness of this case, it was in the public interest to order that the sanction of Exclusion takes effect immediately. Mr Maurice Cohen Chairman 16 February 2018