Saturday, March 04, 2017

Attorney Gets Bar Boot For Role In Bogus Investment Scheme By Disbursing Over $8 Million Of Investors' Funds Held In Trust In Violation Of Escrow Agreement; Court: "Lawyer Knew, Was Reckless Or Wilfully Blind To The Dishonest Conduct That She Assisted"

In Richmond Hill, Ontario, Law Times reports:
  • The Law Society of Upper Canada has disbarred a Richmond Hill, Ont. lawyer after finding she acted as an escrow agent in an illegitimate investment scheme worth $8-million.

    The law society’s disciplinary tribunal revoked Margaret Anderson-Clarke’s licence, deeming she had engaged in professional misconduct by knowingly assisting in “dishonest conduct.”

    Five investors made complaints to the law society about their dealings with Anderson-Clarke. They individually entered investment agreements with a United States-based company, called A.I. in the decision, which required them to deposit money into a trust account held in escrow by Anderson-Clarke between 2010 and 2011. All together, they entrusted her with more than $8 million.

    Anderson-Clarke then released those funds to A.I. and its representatives under the instruction of the company, but without the consent of the investors, according to the decision.

    “For each of the five particulars relating to each investor, we find that the Lawyer knew, was reckless or wilfully blind to the dishonest conduct that she assisted,” bencher Anne Vespry wrote in the decision, Law Society of Upper Canada v. Anderson-Clarke, on behalf of a panel.

    Those funds were meant to be collateral to let A.I. trade for the investors. At the end of a trading period, the deposit, as well as what was expected to be a high return, would be given back to the investors. But the investors received nothing back despite the fact that the escrow agreements held that the money would be returned to them.

    They had not been able to recover the funds at the time of the law society hearing.(1)
    ***
    The tribunal found that Anderson-Clarke did not engage in any investigation concerning the agreements and did not consult more experienced counsel about the obligations in holding an escrow account.

    When she received requests from investors asking for information of the funds, Anderson-Clarke forwarded the requests to A.I. and then used responses written by the company, which did not disclose the investors’ money was no longer in escrow, the decision said.

    Anderson-Clarke also continued to accept money from other investors even after the first investor complained about the unauthorized disbursal of his funds.

    The tribunal inferred that it is more than likely than not that Anderson-Clarke acted with knowledge of A.I.’s dishonest conduct when she accepted money from some of the latter investors into escrow accounts.
For more, see Lawyer disbarred for role in investment scheme.
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(1) The Law Society of Upper Canada has established a Compensation Fund that helps clients who have lost money because of the dishonesty of a lawyer or paralegal. It is paid for exclusively by the lawyers and paralegals of Ontario, Canada, out of their own pockets. If you've lost money due to a lawyer or paralegal's dishonesty, the fund can reimburse you for all or part of your loss. Typically, the fund will pay for losses involving money from estates, from trust funds held for real estate closings and from settlements in legal actions. The fund doesn't reimburse in cases dealing with negligence. A ripoff victim must notify the Law Society in writing about the loss within six months from the time he/she first learns of the loss. In some cases, the Law Society may decide to extend this six-month period to two years, but the granting of an extension is not guaranteed and should not be relied upon.

For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other Canadian provinces, and as well as lawyers licensed throughout the United States, see:
Maps available courtesy of The National Client Protection Organization, Inc.

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