The latest disqualification, which runs concurrently with the first five-year ban which started in 2013, means Malcolm Stewart Graham, who ran SFM Legal Services, cannot be involved in the control or management of a limited company until 2025.
Graham received the second ban from Newcastle upon Tyne County Court after he misrepresented property transactions to a mortgage lender, which led to losses of £29m.
In October 2013, Graham, who had been struck off as a solicitor in 2009 and made bankrupt in October 2009, was banned from being a director after pleading guilty to seven counts of fraud over a stamp duty scheme operated by his firm.
SFM, based in Gateshead, went into voluntary liquidation in August 2009, disclosing liabilities of £266,368 to creditors (subsequently increased to £1,111,190) causing the Secretary of State for Business, Innovation and Skills to bring separate disqualification proceedings against Graham.
In addition to the losses of over £29m Graham inflicted on a mortgagee, the court heard SFM had acted for a borrower who purchased two hotels for a combined total of £11,150,000.
SFM advised the lender that the borrower was purchasing one of 78 separate apartments located in the hotel buildings rather than a hotel.
This enabled the borrower to receive funding totalling £16,799,124 and SFM’s files showed that the company received legal fees of £644,417.
In a separate allegation the court also heard that SFM operated a Stamp Duty Land Tax scheme devised by Graham as a means of reducing tax on property purchases.
SFM undertook that if the scheme was unsuccessful in avoiding SDLT fees paid by clients would be refunded.
But Graham failed to ensure that SFM made provision for repayments to clients and when HM Revenue & Customs adjudged the SDLT scheme to be ineffective SFM was left owing at least £571,495 to clients who had paid up-front fees.
SFM’s accounts show that between 22 February 2006 and 31 March 2008 Graham received remuneration of £1,499,445 and dividends of £330,000 from SFM.
Vicky Bagnall, director of Investigations at the Insolvency Service, said: “Although Mr Graham was disqualified as a director by the court after a fraud trial the Insolvency Service pursued a second disqualification in the public interest as the misconduct was so severe.
“SFM deceived mortgage companies as well as clients which ultimately funded Mr Graham’s lifestyle and further protection for the public for a significant period was needed. He has now had to face the consequences.”