Struck-off lawyer charged with property loan fraud

by NZ Lawyer27 Apr 2016
A formerly struck-off and bankrupt lawyer is facing allegations he defrauded his bank.

Edward Errol Johnston appeared in the Auckland District Court yesterday on charges brought by the Serious Fraud Office of dishonestly taking or using a document, the National Business Review reported.

Johnston, who was struck off by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal back in 2013, was discharged from bankruptcy last month.

Johnston is alleged to have submitted false sale and purchase agreements to his bank when he fell into areas with his mortgage loans.  But the SFO said Johnston either sold the properties for a higher price or transferred them to another trust and refinanced the loan with another bank.

“There is no benefit to this type of deceit as it will be uncovered and charges will be laid,” director Julie Read said, adding the charges serve as a warning to banks and property owners.

“Unfortunately, manipulating the system can also hinder access for honest buyers who are looking to finance the property.”

Johnston was struck-off after obtaining payments from a client for the purchase of a property, which he then used for other purposes, including his own benefit and failed to repay them.  He has not yet entered a plea and will make another appearance next month.

In 2013, Johnston has referred to the SFO after his property investment company collapsed, one entity owing $1.54m to Westpac when it went into liquidation.