Lawyer accused of stealing $3m struck off

File photo / NZ Herald

A life ban for a lawyer accused of stealing $3 million from clients was "the only appropriate penalty", the Law Society says.

John Milne, a lawyer from Dunedin, is under investigation by the Serious Fraud Office over the long-term fraud allegations.

Today, a Lawyers and Conveyancers Disciplinary Tribunal decided to strike him off its roll of barristers and solicitors.

Milne appeared at the tribunal in Christchurch this morning after four professional misconduct charges were brought by the Otago Standards Committee, relating to receiving and dealing with clients' funds.

Milne's counsel submitted that the money was lent to him personally, but the tribunal was satisfied the loans were made to him in the course of his work as a solicitor.

Standards committee lawyers argued he was not a fit and proper person to be a lawyer and should be struck off.

The tribunal panel agreed, concluding after a short hearing that Milne had breached trust and fundamental obligations of a lawyer, causing substantial stress to clients.

Costs were reserved, and a full written decision will follow.

New Zealand Law Society President Chris Moore said said gross abuse of trust was "reprehensible".

"This offending is compounded by the fact that as a lawyer he has totally failed in his duties to his clients, to the justice system and to the rest of the legal profession," he said.

Mr Moore said the Law Society was keenly aware that the actions of Milne could harm the image of lawyers.

"I can assure all New Zealanders that they have a competent and diligent profession which takes its duties and responsibilities very seriously.

"As the organisation responsible for regulating the practice of law, the Law Society will not hesitate to take action against any lawyer who does not meet the obligations they have."

David More, convener of the standards committee of the Otago branch of the Law Society, said it was a "foregone conclusion" that Milne would be struck off.

"I am sorry for the people who trusted John Milne with their money, and have little chance of recovering any of it," he said.

Last year, Dunedin solicitor Alistair Paterson launched an "affected persons' register" to collate the names and extent of loans made to Milne.

Milne was adjudged bankrupt in the High Court at Christchurch last November.

Bankruptcy documents showed estimated claims stood at $2,960,224, with an estimated $137,497 owed to banks and sundry creditors and the balance of $2,768,727 funds given to Milne by clients over a long period.

He's accused of taking as much as $964,000 from one client, more than $100,000 on several occasions.

Milne had his own Dunedin legal practice for decades before it was bought out by another local law firm, Craig Paddon Law, about six years ago.

He then worked for them in their Christchurch office from 2008, but ceased employment in June last year.

The law firm said it had been unaware of claims Milne borrowed money from clients.