SDT expels Selcuk Karatas for £148k client shortage and forged £5,000 transfer

SDT finds dishonesty, forged authority and £148k client shortfall; £33,099.95 costs ordered

The Solicitors Disciplinary Tribunal (SDT) has struck off solicitor Selcuk Karatas after finding him guilty of dishonesty, multiple breaches of the Solicitors Accounts Rules, and using a forged authority to transfer client funds. He was also ordered to pay £33,099.95 in costs.

Karatas, admitted in 2004, was a partner at Stuart Karatas in Hackney, London. The case, heard on 23 and 24 April 2015, centred on systemic misuse of client money, overbilling and concealment of transactions that left a minimum shortfall of £148,475 across client ledgers. The Tribunal concluded that his actions were deliberate, repeated and dishonest.

The Tribunal heard that in January 2013 an SRA investigation officer attended the firm’s offices and requested a client file in Karatas’s care. The file could not be located and Karatas travelled to Turkey shortly afterwards, severing contact with the firm. The inspection later revealed widespread “teeming and lading” in the accounts—using funds from one client to cover shortfalls for another—together with unauthorised withdrawals and false billing.

One client, Mr MB, transferred £6,009 for stamp duty which Karatas directed into his personal bank account. The money remained there for a year and was never paid into client account. In another case, £5,000 was moved from BC Limited’s ledger to cover a shortfall on another client’s account. The authority letter for this transfer bore the name of a director, Inan Kiral, who denied signing it or giving any instruction. The Tribunal concluded that Karatas had used a forged instrument to facilitate the transfer.

Evidence showed repeated overbilling, including invoices raised without genuine costs and debits applied to the wrong client ledgers. In total, the SRA’s investigation identified £47,534.58 of overbilling and numerous unauthorised transfers. The Tribunal said concealment was a central feature of his conduct, with reconciliations made to give the impression accounts balanced.

Karatas denied dishonesty, claiming he had been distracted by family problems and that the SRA had mishandled the investigation. He argued he had not been given proper opportunity to defend himself and suggested that errors may have been caused by complex client arrangements. The Tribunal rejected these explanations as implausible and noted he had chosen not to attend the hearing despite filing a certificate of readiness.

In its ruling, the panel applied the Twinsectra dishonesty test and said: “The very quantity of unauthorised transfers and overbilling necessary to cover the Respondent’s tracks was substantial. His conduct would be regarded as dishonest by the standards of reasonable and honest people, and he must have known it was dishonest.”

The Tribunal concluded that Karatas had failed to act with integrity, breached multiple rules under the 1996 and 2007 Accounts Rules, and had engaged in deliberate acts of deception against clients, partners and third parties.

In sanction, the Tribunal referred to Bolton v Law Society and SRA v Sharma, stating that dishonesty involving client funds almost invariably results in striking off. It found no mitigating circumstances, noting the deliberate nature of the conduct, the number of clients affected, and the reputational damage caused.

Karatas was struck off the roll of solicitors and ordered to pay £33,099.95 in costs. The Tribunal emphasised that public confidence required nothing less than permanent removal from the profession.