Thursday, July 11, 2019

Suspicious Transaction

The Law Society of British Columbia dismissed a request for review of a sanctioned attorney

The Respondent, Donald Franklin Gurney, was found to have committed professional misconduct following a hearing that took place over four days between November 2016 and January 2017.  The finding of professional misconduct was based on the Respondent using his trust account to receive and disburse almost 26 million dollars on behalf of a client without making reasonable inquiries about the circumstances of the transaction, including the purpose of his retainer, and without providing any substantial legal services.  He received the funds in trust via wire transfers from offshore accounts between May and November 2013.  He then purchased bank drafts made payable to the client.  His fees were calculated at 0.1 per cent of the value of the funds that passed through his trust account. 

The hearing panel found that there were grounds to suspect that the transactions were suspicious, and that the Respondent did not make reasonable inquiries into the source and purpose of the funds:  Law Society of BC v. Gurney2017 LSBC 15 (CanLII)

The decision on disciplinary action was rendered on September 1, 2017.  The hearing panel ordered that the Respondent be suspended from practice for a period of six months, pay $25,845 as disgorgement of the legal fees that he had received, and comply with certain trust accounting conditions upon his return to practice: Law Society of BC v. Gurney2017 LSBC 32 (CanLII)

On September 26, 2017, the Respondent filed an application for a s. 47 review of both the Decision on Facts and Determination and the Disciplinary Action Decision.

On January 1, 2018, the Respondent ceased membership with the Law Society.

The Respondent has not taken any steps to advance the s. 47 review.  The Respondent’s former counsel, who filed the review on the Respondent’s behalf, advised in February 2018 that he no longer represents the Respondent in this matter.  Subsequently, the Law Society communicated directly with the Respondent, who has not responded to any of the communications from counsel for the Law Society with respect to the s. 47 review. 

Decision

There is a public interest in the timely resolution of disciplinary proceedings.  The Respondent has had a significant period of time to move the review forward but has not done so, and there is no indication that he intends to proceed with the review.  I find that there is no unfairness to the Respondent arising from the dismissal of the review.

The application is granted, and the review is dismissed. 

CBC News reported on the bar case

A B.C. lawyer with nearly 50 years experience has been suspended for six months after allowing more than $25 million in offshore money into Canada through his own trust account.

Donald Gurney, 74, received and disbursed the money on behalf of several clients over a six-month period in 2013, without providing any legal services related to that cash.

A decision from the Law Society of B.C. said he failed to ask the clients where the cash was coming from, who the lenders were or why the clients were using the money in the first place — all "red flags" he should have addressed.

In processing the transactions, the West Vancouver lawyer "breached his duty as gatekeeper of his trust account" and posed a "serious risk" to the public interest, according to the society's panel.

"Given the fact that a lawyer's trust account is subject to solicitor-client privilege, a lawyer has an obligation to ensure that it is not misused," read the ruling posted last week. 

All in all, $25,845,489.87 was disbursed. Clients paid Gurney a total of $25,845 as a "service charge" for the transactions.

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2019/07/the-law-society-of-british-columbia-dismissed-a-request-for-review-of-a-sanctioned-attorney-the-respondent-donald-franklin.html

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