Pair jailed after solicitor helped property developer ‘bend rules’

Franco Campagna and David Kitching were both jailed yesterday after Leeds Crown Court heard the latter initially decided to “bend the rules” in his conveyancing job at Grahame Stowe Bateson out of misguided loyalty towards Campagna, a valued client facing difficulties with the collapse of the property market.

Both hoped it would only be a short-term arrangement but when Campagna could not come up with the necessary funds their activities turned dishonest as he stalled for time, said Jonathan Sharp, prosecuting.

By the time the fraud came to light in 2009 they had misapplied funds for eight properties totalling £537,655 with a “potentially catastrophic” impact on the solicitor’s firm which is now facing, at the very least, increased insurance premiums to cover the financial liabilities, the judge heard.

Campagna, 34 of Armroyd Lane, Elsecar, Barnsley, was jailed for two years four months and Kitching, 64 of Queens Close, Leeds, for 12 months after each admitted eight charges of fraud involving properties in South Yorkshire including Mexborough and Barnsley.

Sentencing them Judge Guy Kearl QC said he accepted it had not started dishonestly but grew from Campagna having financing problems on the downturn of the property market and putting Kitchen up to what followed.

In 2007 and 2008 after Campagna had difficulties meeting some financial obligations he took out some short-term bridging finance on the buy-to-let properties he was selling on to clients.

They were receiving funds to purchase the properties from financial institutions and when the money arrived Kitching should have used it to discharge the bridging loans but instead of doing so was asked by Campagna to discharge loans on other properties belonging to him.

“This was completely dishonest and that was known to both of you,” said the Judge.

“You Campagna directed where the money went and you Kitching did as requested in this enterprise.”

Kitching covered their tracks by preparing certificates of title for the finance company concerned knowing they were false but which would fool them into releasing the money.

Judge Kearl said although he accepted Kitching had not benefited financially and had lost his home, job and reputation, such behaviour was a gross breach of trust against his then employers and eroded public confidence in the legal profession as a whole.

Mr Sharp said Campagna would find properties for some people who were building up buy-to-let portfolios with him initially paying the deposits.

Kitching was employed as a conveyancer at Grahame Stowe Bateson in Leeds and because he was both trusted and a friend of the partners worked largely to his own arrangements.

He became a regular conveyancer for Campagna handling some 250-300 of his transactions and was introduced to some of those he would find properties for, and began doing their conveyancing as well.

Initially the system acted normally but it gradually became a habit for Campagna to give instructions on both his and their behalf instead of them being separately represented when he was selling property to them.

After the money was misapplied, rather than admit what had happened, Kitching stalled hoping Campagna would come up with the finances until eventually the finance company wrote to his employers and their investigation began.

Richard Wright, for Kitching, said there was no greed or personal gain involved on his part he had naively “bent the rules” for a trusted client and then found Campagna’s promise to repay was hollow. He knew he had let many people down.

Solicitor Grahame Stowe said afterwards: “The firm and his work colleagues are stunned by his conduct, disloyalty and betrayal.”