Friday, August 19, 2022

Red Flags

An attorney's involvement in real estate transactions with "red flags" led to misconduct findings from the a hearing panel of the British Columbia Law Society.

The attorney was admitted in 1963.

We find the main objectively suspicious circumstances of the Transactions, or the key “red flags”, to be as follows:

(a)        information regarding MK’s criminal conviction for conspiracy to traffic cocaine in the United States, coupled with the Respondent’s exposure to the nature and implications of a drug conspiracy conviction in Dillon;

(b)        allegations of criminal activity made about EA in the course of the OR Estate Litigation, along with the source of the funds for the Drake Street Property purchase, and discoverable online information linking EA to a transnational drug trafficking organization tied to money laundering;

(c)        obviously close relationships and business connections between many of the Respondent’s repeat clients and other parties to the Transactions, despite their portrayal to banks and mortgage companies as arm’s-length interests;

(d)        changing employment information and addresses for the Respondent’s clients, and in particular, EA;

(e)        payments owing to MK and EA for the Transactions where they were not

parties;

(f)         deposits being paid directly to the vendor without verifiable record of the deposits actually being made;

(g)        limited or no direct contact between the Respondent and his clients;

(h)        quick closing dates after initial file instructions from MK;

(i)         rapid increase in the Howe Street Property’s selling price between its February 2012 purchase and its April 2012 sale; and (j)    high ratio mortgages with very low commissions.

By his own admission, the Respondent did not make any inquiries prior to acting, or continuing to act, in these objectively suspicious circumstances.  There is not enough evidence to determine if he ignored them as suspicious, or if he simply did not perceive them as suspicious.  In any case, it follows that he also did not make any records of inquiries, nor did he decline to act or continue to act in the Transactions, until there was a reasonable basis for believing that they were legitimate.

We find that the Law Society has established, on a balance of probabilities, the facts underlying the Allegation of Failure to Make Reasonable Inquiries.  In summary, we find that the Respondent failed as a lawyer to ensure that he was not becoming the tool of possibly unscrupulous persons.

The panel also found a misappropriation. (Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2022/08/an-attorneys-involvement-in-real-estate-transactions-with-red-flags-drew-x-from-the-a-hearing-tribunal-of-the-british-columbi.html

Bar Discipline & Process | Permalink

Comments

Post a comment