A police investigation into a solicitor accused of mortgage fraud in property deals involving an SNP MP could be widened out to include anyone suspected of criminality during the transactions, Scotland’s top prosecutor has confirmed.
Lord Advocate Frank Mulholland was called to Holyrood today to answer questions about “allegations of mortgage fraud against Christopher Hales”, the lawyer who acted for property dealer Michelle Thomson before she was elected an SNP MP.
Ms Thomson has denied any wrongdoing and withdrawn herself from the party whip, a move which also means her membership of the SNP is suspended.
Mr Mulholland said police have a duty to investigate anyone suspected of criminality and will “follow the evidence and where that takes them”.
Conservative MSP Murdo Fraser asked: “In what circumstances would the Crown Office ask Police Scotland to investigate any other person connected with the solicitor subject to the Law Society’s judgement?”
Mr Mulholland said: “I gave some consideration to that because I think it is a highly relevant question.
“The referral to Police Scotland is in relation to the solicitor who is the subject of SSDT finding.
“The police have been instructed to investigate the property transactions related to that finding resulting in the solicitor being struck off.
“Police Scotland have a duty in any criminal investigation to follow the evidence and where that takes them.
“So, if during a police investigation evidence arises that other persons have been involved in criminality and fraud, or whatever crime the police have uncovered evidence of, then Police Scotland, I have complete faith in them, they will act and do the right thing as will the Crown.”
Ms Thomson is linked to 13 transactions Hales conducted in 2010-11 where properties were bought cheaply from clients looking for a quick sale and sold at a huge mark-up the same day and where complicated “cashback” deals were used to artificially inflate property prices to secure bigger loans from lenders.
Hales was struck off by the Law Society following a tribunal which concluded that he “must have been aware that there was a possibility that he was facilitating mortgage fraud”.
The Lord Advocate stressed the first time the Crown Office was made aware ofthe identity of Hales’ clients was when the case was formally referred by theLaw Society on July 3 2015.
However, he confirmed that concerns were raised about Hales during an informal meeting between the Crown and the Law Society on April 28 2015 – eight days before Hales’ client Ms Thomson was elected SNP MP for Edinburgh West.
Last week, Law Society chief executive Lorna Jack gave an “absolute and categorical assurance” that the election played no part in the protracted referral to the Crown.
The Lord Advocate today dismissed calls from Labour MSP Jackie Baillie for an investigation into the process of communication between the Law Society and the Crown Office.
He said: “I don’t think there should be an inquiry.”
He confirmed the Crown Office were advised that the Hales case was “under consideration of a referral to the Crown” during a scheduled quarterly meeting December 18 2014.
He stressed that at that time “neither the clients nor the properties involved were named at the meeting”.
He confirmed that it was raised again at the next quarterly meeting on April 28 2015, where it was noted that a referral “was still under consideration” and “again neither clients nor the properties were intimated at that time”.
He added: “Preparatory work was undertaken with the Law Society to deal with the matter if and when there was a formal referral.
“The referral was made on July 3 2015. We were advised on July 1 2015 by the Law Society that they were required to get authorisation from the Guarantee Fund Sub-Committee (GFSC) to formally refer the case to the Crown Office. That is a Law Society procedure.”
Last week, the Law Society confirmed that Sheila Kirkwood, secretary to the GFSC, is a personal acquaintance of Mr Thomson with close links to the SNP.
The Law Society said she is entitled to her political views but has pledged to look more deeply into her knowledge of Ms Thomson’s links to the Hales case.
Mr Mulholland added: “We are dealing with a criminal investigation in which a person’s liberty could be in jeopardym so these things cannot be dealt with quickly or by word of mouth.
“There is a process and that process was carried out by the Law Society, and authorisation was given for a referral by the GFSC to refer the case.
“Once that authorisation was given the referral was made on July 3 2015.”
He added: “The first time that the Crown was made aware of the clients and the properties was July 3 2015.
“The Crown was not aware of the clients and the properties prior to that.
“There would be issues of client confidentiality and data protection, but of course that is not my problem, that is not my issue, that is a matter for the Law Society in their dealings with the matter.”