An indebted mortgage and insurance broker has been ordered to pay back nearly £1.5 million of client money, after being found to have breached fiduciary duty and acted dishonestly.
Rienze Albert Joseph Asoke Silva, known as Joe Silva, owns a Croydon-based brokerage, Abbey Brokers Ltd. During a High Court Chancery Division ruling it was heard how he took the large sum from clients to pay off his own debts.
According to a report on FTAdviser.com, Mr Silva took nearly £1.5 million from his clients, Abdul Sattar Muhi Al Khudairi and Fathia Dawood Salman, a married couple from Iraq who cannot read or write English, in order for them to take out a mortgage on their home.
He advised them to take out a mortgage with Northern Rock on their London property, which is converted into five flats, so that they could transfer their properties into their four children’s names in a tax efficient way.
However, having taken out the mortgage and handed Mr Silva £1.35 million after fees, the couple were told that their money was being held offshore in a 90-day notice Jersey bank account. In reality, the mortgage broker had paid it into a friend’s bank account, and was receiving signed, blank cheques for which he used to withdraw the money.
Mr Silva reportedly told his clients that the £1.35 million would be used to effectively buy each of the five flats in their children’s names, predicting that the process would take a few months.
Yet, more than three years after taking out the mortgage, none of the flats had been transferred and the funds had vanished. During this period, the couple were apparently left with sky-high interest payments on the loan, which stood at over £9,000 a month in December 2007.
The broker, who at one point spent £400,000 of the money within a three week period, argued during the case that his clients had given him the money to use for five years as he saw fit and had agreed to pay interest on the amount.
However, the judge ruled that this had never been agreed, saying that Mr Silva was liable for “deceit and dishonest advice”.
Before the hearing Mrs Salman said that her family had been “shattered because of this matter”.
When Debt Management Today called Mr Silva, who still owns Abbey Brokers Ltd, he said that he planned to appeal the judge’s decision and so was unable to comment further.
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