Kumari-Banga Solicitors is being investigated by the industry regulator, which says clients lost huge sums of money after selling their homes through speedyproperty.co.uk.
The Solicitors Regulation Authority (SRA) has so far made 12 payments to their clients totalling almost £875,000 as part of the investigation. It is claimed sellers lost out on tens of thousands of pounds through the scheme, as sale proceeds were funnelled elsewhere.
Meena Kumari and Teena Kumari Banga, partners at the firm which was based on Newhampton Road, Whitmore Reans, are facing a hearing of the Solicitors' Disciplinary Tribunal in June over allegations they acted in "conveyancing transactions they either knew, or should have known, were fraudulent" and failed to protect their clients. They could not be contacted for comment.
It comes as West Midlands Police continues to investigate separately Speedy Property, over which eight people have been arrested and released pending further inquiries.
The SRA was alerted after being approached by a number of Kumari-Banga clients. A pensioner claimed he received just £68,000 from the £165,000 sale of his home in Wales.
The allegations against the pair relate to a period between 2013 and 2017. It's alleged that they "knew or ought to have known" transactions bore "a number of suspicious features, the hallmarks of fraud and/or the hallmarks of money laundering" and that they "failed" to carry out proper inquiries, advise their clients and obtain their consent to make payments to third-party companies.
The SRA said the solicitors would have the chance to respond to the allegations at the tribunal, which would then "deliberate on whether or not misconduct has taken place, and if so, decide upon any relevant sanctions".
An SRA spokesman said: "Some of Kumari-Banga’s clients came to us having suffered financial hardship because of the firm’s failure to account for their money.
"In those circumstances, the public can apply to our Compensation Fund for grants to recoup their losses. So far, we have made 12 payments from our Compensation Fund totalling nearly £875,000. Not every application will be successful, there are certain criteria that need to be met. We cannot divulge details on who or who has not been given a grant; we don’t have their permission to do this.
"Because we have ongoing proceedings, we are unable to comment any further at this time. The matter now belongs to the SDT, and it will set the date for any hearing."