DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS. Heard on: Wednesday, 28 June 2017

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1 DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS REASONS FOR DECISION In the matter of: Mr Abu Talib Ghadiri Heard on: Wednesday, 28 June 2017 Location: HMP The Mount, Molyneaux Avenue Bovingdon, Hemel Hempstead, Hertfordshire HP3 0NZ Committee: HH Graham White (Chairman), Mrs Judith Glover (Accountant) and Ms Helen Kitchen (Lay) Legal Adviser: Mr Alastair McFarlane Persons present and capacity: Ms Emily Healy (ACCA Case Presenter) Ms Pamella Ramphal (Hearings Officer) Ms Subagarey Pathmanathan (Hearings Officer) 1. ACCA was represented by Ms Healy. Mr Ghadiri attended and was not represented. The Committee had before it a bundle of papers, numbered pages A to M, 1 108, an adjournment bundle numbered pages , an additionals bundle, numbered pages and a service bundle numbered pages 1-14.

2 SERVICE/ PROCEEDING IN ABSENCE 2. Having considered the service bundle, the Committee was satisfied that notice of the hearing had been served on Mr Ghadiri in accordance with the Complaints and Disciplinary Regulations ALLEGATIONS Allegation 1 a) On 12 April 2016, Mr Abu Talib Ghadiri was convicted of the following offences, which is discreditable to the Association or the accountancy profession: i. One count of conspiracy to defraud; ii. Nine counts of fraud by false representation; iii. One count of making/supplying articles for use in fraud. b) By reason of his conduct at 1(a) above, Mr Abu Talib Ghadiri is liable to disciplinary action pursuant to bye-law 8(a)(ix). Allegation 2 a) Between 1 August 2014 to 3 November 2016 Mr Abu Talib Ghadiri, contrary to paragraph 6(2)(b) of the Chartered Certified Accountants Membership Regulations 2014 ( the Membership Regulations ): i. held himself out as being in public practice contrary to the Membership Regulations 8(2)(a)(ii); and/or

3 ii. held rights in a firm where public practice is carried on in the name of the firm or otherwise in the course of the firm s business, which in effect put him in the position of principal of the firm contrary to the Membership Regulations 8(2)(a)(iv). b) Between 1 May 2016 and 3 November 2016 Mr Abu Talib Ghadiri held himself out to be a Director of a firm where public practice is carried on in the name of the firm or otherwise in the course of the firm s business contrary to the Membership Regulations 8(2)(a)(iii). c) Mr Abu Talib Ghadiri s conduct in relation to Allegation 2(a) and/or 2(b) was: i. Dishonest. ii. Contrary to the Fundamental Principle of Integrity (as applicable in 2014 to 2016) d) By reason of his conduct in respect of any or all of the matters set out at 2(a) to 2(c) above, Mr Abu Talib Ghadiri 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). The Committee granted the amendment to Allegation 2(a)(i) as set out in italics above with the agreement of the parties under Regulation

4 10(5) of Complaints and Disciplinary Regulations as the amendment could be made without any prejudice to Mr Ghadiri s case. BACKGROUND 3. Mr Ghadiri became a student of ACCA on 08 November 2000 and an affiliate of ACCA on 11 February On 19 April 2016, the Financial Reporting Council notified ACCA that Mr Ghadiri s LinkedIn profile referred to him holding an ACCA qualification. This information was then passed to ACCA s Investigations Department. The Financial Reporting Council also provided an article to ACCA which outlined that Mr Ghadiri had been subject to an HMRC investigation and found guilty of Gift Aid and VAT fraud. 5. Companies House records indicate that a firm, Accountant 4 Us London Ltd, was incorporated on 01 August 2014 and has the trade description Accounting, and auditing activities. In accordance with Global Practicing Regulation 4, this firm is considered to be a public practice firm as it is holding out to be available to carry out public practice activities by virtue of its trade description and the use of the term Accountant in its name. Companies House records also indicate that Mr Ghadiri is the sole shareholder of the firm and has been since 01 August 2014 when he was the only subscriber to the Company s Memorandum of Association. It also records that Mr Ghadiri was appointed director of the firm on its formation on 1 August 2014 and that he was again appointed a director on 01 May 2016 with his occupation listed on both occasions as Accountant. 6. Mr Ghadiri s LinkedIn profile also states that he is an Accountant at the firm and refers to himself as a Qualified Accountant. ACCA is also referred to in the Courses and Education section of the LinkedIn profile.

5 7. ACCA wrote to Mr Ghadiri at his registered address and registered address and then his prison address when it was discovered, to seek his comments in relation to HMRC s investigation and his conviction of VAT fraud and his holding himself out as available to carry out public practice. Mr Ghadiri responded after ACCA communications came to his attention and he provided a substantive response in April On 14 July 2016, ACCA was provided with a copy of Mr Ghadiri s certificate of conviction. This confirmed that he was convicted on 12 April 2016 of one count of conspiracy to defraud, nine counts of dishonestly making false representations and one count of making/supplying articles for use in fraud. The certificate also confirmed that Mr Ghadiri was sentenced to 6 years imprisonment on 20 May The incidents leading to the conviction involved VAT fraud and abuse of the Gift Aid system by Mr Ghadiri and others. The sentencing judge, who heard all the evidence in the trial, stated that Mr Ghadiri decided he could make a living by fraudulently reclaiming large sums of money from HMRC. This was done in two ways. Firstly, companies were created and registered for VAT. They never properly traded but submitted VAT returns which indicated there was output tax paid far in excess of input tax and as a result a fraudulent reclaim was made. Secondly, Mr Ghadiri and another abused the Gift Aid system and successfully received large sums in Gift Aid tax repayments fraudulently. For both fraudulent systems false documents were created. The total amount fraudulently claimed was in the region of 114,000 in relation to the VAT reclaims and 160,000 in relation to the Gift Aid reclaims. The judge stated that Mr Ghadiri s evidence at the trial consisted of a series of lies, characterized by meanness and cowardice in that he always found someone else to blame for his crimes.

6 10. The Sentencing Judge further stated that : In addition, I have absolutely no doubt that even during the course of the trial you [together with another]...were instrumental in creating false documentation to support your false defence...i stress that such behaviour during the trial does not add to your sentence, but I take it as a measure of your sheer dishonesty and total lack of remorse. and that: [His] conduct during a trial...again shows a complete disregard for the truth, and was what in fact amounted to an attempt to pervert the course of justice. 11. In sentencing Mr Ghadiri, the Judge also stated: You abused your position of responsibility as an accountant. The fraud was sophisticated in its nature, required significant planning, and it was conducted over a significant period...in your case the only factor reducing seriousness is your previous good character. ACCA SUBMISSIONS ALLEGATION 1(a) 12. ACCA submitted that Mr Ghadiri was found guilty of one count of conspiracy to defraud, nine counts of dishonestly making false representations and one count of making/supplying articles for use in fraud and this is evidenced by the certificate of conviction in accordance with bye-law 8(e).

7 ALLEGATION 1(b) 13. As a result of this conviction, ACCA submitted that Mr Ghadiri is liable to disciplinary action in accordance with bye-law 8(a)(ix). These offences are discreditable to him personally given the serious nature of the offence and the numerous counts against him. Furthermore, the offences committed by Mr Ghadiri are discreditable to ACCA and the accountancy profession given that the public s trust in them is likely to be undermined in light of his dishonest conduct. Additionally, the Judge s sentencing remarks make reference to Mr Ghadiri s dishonest behaviour during the trial, which reflects his lack of remorse in relation to the offences. ACCA accordingly submitted that Mr Ghadiri s conviction and conduct are discreditable to him, ACCA and the Accountancy Profession and that he is therefore liable to disciplinary action. ALLEGATION 2(a) and 2(b) 14. Mr Ghadiri s occupation is listed as Accountant on Companies House records and he refers to himself as a Qualified Accountant on his LinkedIn profile. Therefore, Mr Ghadiri was holding himself out to be available to carry out public practice activities, as set out at Global Practising Regulation 4(1)(c). Mr Ghadiri is an affiliate of ACCA, and therefore, although he may have passed ACCA examinations, he has not obtained the necessary supervised experience and has not achieved membership status. ACCA submitted that Mr Ghadiri has therefore breached Membership Regulation 6(2)(b). Additionally, Membership Regulation 6(2)(b) requires affiliates to comply with Membership Regulation 8. By holding himself out as being in public practice, Mr Ghadiri was in breach of Membership Regulation 8(2)(a)(ii). As set out at paragraphs 5-6 above, he is the director and principal of a firm holding out to be available to carry out public practice activities and where public practice is carried on and is

8 therefore in breach of Membership Regulation 8(2)(a)(iii) and 8(2)(a)(iv). ALLEGATION 2(c)(i) 15. Mr Ghadiri refers to himself as a Qualified Accountant on his LinkedIn profile and his occupation on Companies House records is listed as Accountant, whilst he is an affiliate of ACCA. Additionally, he is the director and principal of a firm carrying out public practice activities. In light of this, ACCA submitted that Mr Ghadiri s conduct would be considered dishonest, by the ordinary standards of reasonable and honest people, as he was claiming to be able to carry out activities he is not entitled or authorised to do. It is further submitted that Mr Ghadiri knew his conduct was dishonest by those standards, as he knew he was an ACCA affiliate and not a qualified accountant and therefore was not able to carry out public practice activities or be a director or principal of a firm which carried out such activities. ALLEGATION 2(c)(ii) 16. ACCA submitted that if the Committee makes a finding of dishonesty then it has to find that the Fundamental Principle of Integrity has been breached. Amongst other indicative behaviours, the Fundamental Principle of Integrity requires members to behave honestly. As Mr Justice Stadlen s judgment in The Queen on the Application of Margaret May v The Chartered Institute of Management Accountants sets out, a breach of a Fundamental Principle of Integrity, which requires someone to act honestly, is synonymous with a finding of dishonesty. 17. ACCA submitted that as Mr Ghadiri knew that his conduct was dishonest, he would have known that his conduct brings, or is likely to bring, discredit to him, to ACCA as his regulatory body and to the

9 accountancy profession in general. His conduct demonstrates a lack of professional responsibility. The Fundamental Principle of Integrity imposes a duty on all members, affiliates and registered students to be straightforward and honest therefore if Mr Ghadiri s conduct is found to be dishonest, it naturally follows that he has breached the fundamental principle of Integrity. ALLEGATION 2(d)(i) 18. Mr Ghadiri has referred to himself as an Accountant and Qualified Accountant on documents that are available for public record and therefore has misled the public in stating that he is a qualified accountant. Notwithstanding that misconduct is a matter of judgment for the professional panel, ACCA submitted that for these reasons Mr Ghadiri is guilty of misconduct. ALLEGATION 2(d)(ii) 19. ACCA submitted that if allegations 2(c)(i) and 2(c)(ii) are not found proved, Mr Ghadiri is liable to disciplinary action pursuant to bye-law 8(a)(iii) in that he claimed to be a qualified accountant and is the director and principal of a firm carrying out public practice, contrary to Membership Regulation 6(2)(b) and 8(2). Mr GHADIRI S SUBMISSIONS 20. Mr Ghadiri admitted Allegation 1 (a) and denied Allegation 1 (b) and Allegation 2 in its entirety. He had summarized his response to the allegations in a statement dated 25 April 2017 which appears at pages 201 to 205 in the document bundle 21. Mr Ghadiri indicated that he was still intending to appeal his conviction and that a recent appeal against sentence had been

10 dismissed. He accepted he was not able to dispute the facts of the conviction before this Committee. 22. In relation to Allegation 2, Mr Ghadiri stated that while he had been involved with Mr A and Mr B in setting up Accountants 4 U London Ltd it being registered by mutual agreement. It had been purchased only to preserve its name and that there was no intention for it to trade until he finished his ACCA training and obtained membership. He had told Mr B he could not be a director until he was qualified. He had checked online and he was not recorded as a director. Mr Ghadiri stated that he had not signed any documents to be a director but did not know whether he had consented to be a director. He had never received any correspondence in relation to his role as director. Nothing had been sent out to him. Although he knew he was a shareholder, he only became aware of his allegedly being a director when he saw the ACCA documents. He stated that he was in prison from 12 April 2016, on remand, and so had no access to the internet when the form notifying Companies House of his becoming a director on 1 May 2016 had been electronically filed. He was not responsible for this document or for the LinkedIn entries, which he said had not been produced by him but by his former girlfriend who had access to his computer. DECISION ON ALLEGATIONS AND REASONS 23. The Committee accepted the advice of the Legal Adviser. The Committee reminded itself that the burden of proving the factual allegations, rested upon ACCA. The standard of proof to be applied throughout was the ordinary civil standard of proof, namely the balance of probabilities. 24. The Committee reminded itself to exercise caution, as ACCA s case was based on documents alone, in relation to the weight to be attached to evidence that was indirect or hearsay.

11 25. The Committee carefully considered the oral evidence it had received from Mr Ghadiri and documentary evidence it had received, as well as the submissions of Ms Healy on behalf of ACCA and Mr Ghadiri on his own behalf. ALLEGATION The Committee was satisfied by virtue of Mr Ghadiri s certificate of conviction and his admission, that Mr Ghadiri was convicted of conspiracy to defraud; nine offences of dishonestly making false representations; and one offence of making/supplying articles for use in fraud. Accordingly, it was satisfied that Allegation 1 (a) was proved. LIABILITY TO DISCIPLINARY ACTION 27. The Committee had no doubt that the proved conviction was discreditable to the Association and the accountancy profession. This was because of the nature of the fraudulent and dishonest conduct over a prolonged period of time. It was a sophisticated fraud that required significant planning and involved abuse of his position of responsibility as an accountant. He played a leading role in the commission of the offences. Accordingly the Committee was satisfied that the conviction in Allegation 1 (a) rendered Mr Ghadiri liable to disciplinary action pursuant to Bye-law 8(a)(ix). ALLEGATION The Committee had regard to meaning of public practice as set out in Regulations 4 of Global Practising Regulations. 29. In relation to Allegation 2(a)(i), the Committee noted Mr Ghadiri s explanation that his former girlfriend created the LinkedIn profile behind his back. He separated from her in ACCA relied upon a

12 print out of Mr Ghadiri s LinkedIn page where he is described as a Qualified Accountant. As an affiliate of ACCA such a description would amount to holding himself out as being in public practice. However, the Committee noted that the LinkedIn page referred to him as an Accountant for Accountant 4 US since July 2011 Present (4 years 11 months). This could indicate that the page was created in June ACCA has not disputed that Mr Ghadiri was in custody without access to the internet at that time. Additionally 2016 appeared at the foot of the page. In all the circumstances, the Committee considered the LinkedIn documentation to be unreliable and could not rely on it to find this allegation proved. 30. However, it also noted the records ACCA had obtained from Companies House. These show that the Accountant 4 Us London Ltd was incorporated on 1 August Mr Ghadiri is listed as of that date as Company Secretary and Company Director and signatory to the Memorandum of Association. His occupation is given as Accountant and his home address is the registered and service address for the company. Mr Ghadiri stated that while he had been involved with Mr A and Mr B in setting up the Company which was registered by mutual agreement, it had been created only to preserve its name and that there was no intention for it to trade until he became a member of ACCA. He stated that he told Mr B that he could not be a director and when he checked online he saw he was not a director, although he was a shareholder. The Committee did not find Mr Ghadiri s explanation that he had no knowledge that he had been recorded as director and accountant in the company creation documents, to be credible. Accordingly, the Committee was satisfied on the basis of the Companies House documentation that Mr Ghadiri was a director of the Company when it was created in 2014 with his home address as its registered office and that he either created or endorsed those documents. It was therefore satisfied that he knew he was described therein as an Accountant and this constituted a holding out as being in public practice. Therefore the Committee finds

13 Allegation 2 (a) (i) is proved. The Committee accepts that there may have been a period subsequently when he was not a director, and that the recording of him as a newly appointed director in May 2016 may not have been done by him, but this does not undermine its finding that he held himself out as being in public practice in August In relation to Allegation 2(a)(ii) and 2(b), the Committee was not satisfied that ACCA had proved that the firm was carrying on public practice. Both allegations require proof that Accountant 4 Us London Ltd was a firm where public practice was being carried on in the name of a firm of which Mr Ghadiri held himself out as a director or which, in effect put Mr Ghadiri in the position of principal of the firm. In the absence of this evidence neither Allegation can be proved. The carrying on of public practice is an essential ingredient in both Allegations. As this element has not been proved, the Committee finds both Allegations 2(a)(ii) and 2 (b) not proved. DISHONESTY 32. In relation to the proved Allegation 2(a)(i), the Committee found as a fact that Mr Ghadiri knew he was an affiliate member and was not entitled to hold himself out as being in public practice and as a qualified accountant when he was not. Mr Ghadiri told the Committee that he knew he was not allowed to use the word accountant next to his name. He explained that the understood the need to have a practising certificate to use the title accountant. The Committee considered other possibilities as opposed to dishonesty, but rejected that this conduct was, for example, a negligent or reckless omission. The Committee was satisfied, on the balance of probabilities, that acting in this manner was dishonest by the standards of ordinary and honest members of the public and/or the accountancy profession and that it was more likely than not that Mr Ghadiri realised that what he was doing was by those standards dishonest.

14 CONTRARY TO FUNDAMENTAL PRINCIPLE OF INTEGRITY 33. The Committee was satisfied that Mr Ghadiri s conduct was dishonest and therefore was also contrary to the Fundamental Principle of Integrity. It noted that, amongst other indicative behaviours, the Fundamental Principle of Integrity requires members to behave honestly. As Mr Justice Stadlen s judgment in The Queen on the Application of Margaret May v The Chartered Institute of Management Accountants sets out, a breach of a Fundamental Principle of Integrity, which requires someone to act honestly, is synonymous with a finding of dishonesty. MISCONDUCT 34. The Committee then considered whether the proved Allegation 2 (a)(i) was sufficiently serious to render Mr Ghadiri guilty of misconduct pursuant to Bye-law 8(a)(i). The Committee had regard to the definition of misconduct in Bye-law 8(a)(i)(a) and the assistance provided by the case law on misconduct. It was satisfied that Mr Ghadiri s actions brought discredit on him, the Association and the accountancy profession. It was satisfied that dishonestly describing himself as an accountant and thereby holding himself out as being in public practice, when as an affiliate, he was not so entitled, was deplorable conduct and reached the threshold for a finding of misconduct. Therefore, the Committee did not consider the alternative of liability to disciplinary action in Allegation 2 (d)(ii). SANCTIONS AND REASONS 35. The Committee noted its powers on sanction were those set out in Regulation 13(4) of the Complaints and Disciplinary Regulations. It had regard to ACCA s Guidance for Disciplinary Sanctions and bore in mind that sanctions are not designed to be punitive and that any

15 sanction must be proportionate. It accepted the advice of the Legal Adviser. 36. The Committee considered Mr Ghadiri s dishonest conduct that led to the conviction and the dishonest holding himself out as being in public practice to be very serious. 37. It considered the following to be aggravating factors: a. Significant fraudulent conduct over a substantial period of time b. High culpability he played a leading role in the offending group c. Sophisticated nature of the fraud which required significant planning d. Abusing his position of responsibility as accountant e. Dishonesty f. No evidence of insight into the seriousness of the conduct and of the impact on the reputation and good standing of the Association and the profession g. Repeatedly seeking to blame others 38. The Committee considered the only mitigating factor to be the absence of any previous criminal convictions and disciplinary record although it took account of Mr Ghadiri engagement with the ACCA s disciplinary process. 39. The Committee had specific regard to the public interest and the necessity to declare and uphold proper standards of conduct and behaviour. Trust and honesty are fundamental requirements of any professional. Dishonesty by an ACCA affiliate undermines both the reputation of and public confidence in ACCA and in the wider accountancy profession.

16 40. The Committee noted that Mr Ghadiri has not apologised or expressed any remorse to ACCA. 41. Given the Committee's view of the seriousness of his conduct, it was satisfied that the sanctions of No Further Action, Admonishment, Reprimand and Severe Reprimand were insufficient to highlight to the profession and the public the gravity of the proven conduct. 42. The conduct involved dishonesty and there was no evidence before the Committee of any understanding and insight into the seriousness of such behaviour and the consequences of it for the reputation of the Association and the accountancy profession. The Committee determined that Mr Ghadiri s behaviour was fundamentally incompatible with him remaining on the affiliate register of ACCA and considered that the only appropriate and proportionate sanction was that he be removed from the affiliate register. The Committee further considered that the matters were so serious that it also directed that no application for re-admission should be considered until the expiry of five years after the effective date of the order. Any such application must be considered by the Admissions and Licensing Committee at an oral hearing. COSTS AND REASONS 43. ACCA claimed costs of 8, based on a standard assessment of what work this case had involved. The Committee decided that it was appropriate to award costs in this case, and that the sums claimed were reasonable for work reasonably undertaken. While it noted Mr Ghadiri asserted his means are limited, he has not submitted any detailed statement of means and it concluded that the sum of 8, was appropriate and proportionate. Accordingly, it ordered that Mr Ghadiri pay ACCA s costs in the amount of 8,750.90

17 EFFECTIVE DATE OF ORDER 44. This order shall take effect immediately. The Committee was persuaded that it was in the interests of the public under Regulation 20(1)(b) of the Complaints and Disciplinary Regulations to impose an immediate order, given the seriousness of the facts of this case and that the issue of public protection is primarily involved. HH Graham White Chairman 28 June 2017