A Bradford solicitor is being investigated by the Home Office after an undercover recording captured him offering to transfer a £45,000 illegal-working penalty into someone else’s name for a £4,500 fee.

Mohammad Alias Yousaf, also known as Alias, told a reporter posing as a mini-mart owner that he could avoid paying if someone overseas agreed to declare themselves the business’s owner. Yousaf denies advising anyone to transfer a penalty to someone who was not responsible for a business or to provide false information to the Home Office.

The Home Office will examine whether immigration rules were breached. The Solicitors Regulation Authority will consider whether the findings warrant further inquiries into possible misconduct by solicitors or law firms.

Yousaf said his work involved lawful challenges to penalties through routes provided by Parliament, usually on the grounds that the person found was not an employee. He said that, when the reporter proposed putting the business into another person’s name, he warned in writing that he could not advance an untruthful or dishonest case. He did not act for the reporter.

The allegations coincide with a wider problem of collecting penalties. Home Office figures show at least £150m remains owed in unpaid illegal-working fines. Home Secretary Shabana Mahmood has ordered a review of how penalties are issued and collected.

An anonymous law enforcement whistleblower described difficulty identifying the real owners of businesses employing illegal workers. She said she had seen fine notices, some worth £40,000, stuffed into a box on a mini-mart counter, and owners laughing off demands for payment while denying responsibility.

Her account illustrates a practical obstacle: issuing a penalty does not secure payment if responsibility for the business cannot be established. The wider investigation examined illegal working and criminality linked to some high street businesses, including mini-marts and barbershops, over 18 months.

Mahmood said illegal working undermined honest employers, undercut local wages and fuelled organised immigration crime. The government said arrests and raids were at their highest recorded levels and removals of illegal workers were up 50%.

Shadow home secretary Chris Philp argued that unpaid penalties exposed ineffective enforcement, calling it a “laughing stock”, and demanded that Yousaf be struck off. Shadow justice minister Nick Timothy wrote to the regulator seeking urgent action to stop him practising.

Those demands precede any regulatory finding. The immediate questions are whether Yousaf breached the rules and how the government can turn penalties issued into money collected; higher arrest and raid figures do not, by themselves, answer either.