Two Disbarred In British Columbia
The Law Society of British Columbia has disbarred two attorneys for misappropriation of entrusted funds in unrelated matters.
One matter involved a fee for the administration of the estate of a deceased whose relatives were in Italy.
In May 2009, the Respondent was introduced to the Deceased to assist in addressing potential elder fraud on the part of an Attorney appointed under a Power of Attorney. The Respondent prepared a new will and a revocation of the Power of Attorney, which the Deceased executed. The new will appointed the Respondent and a friend of the Deceased as co-executors of the will.
On November 9, 2010, the Deceased passed away. The Deceased’s elderly friend who had been appointed as co-executor under the will renounced her appointment as co-executrix of the Deceased’s estate (the “Estate”), leaving the Respondent as the sole executor of the Estate.
The Deceased’s brother, LG was the sole beneficiary of the Estate. LG and his family, including his daughter, lived in a small town in Italy. As LG was unfamiliar with legal documents and email, LG’s daughter often communicated with the Respondent on LG’s behalf.
The attorney took $50,000 more than the statutory fee.
When a compliance audit caught the issue, she explained
The family was extremely appreciative and grateful to me for the assistance provided to [the Deceased] prior to his passing and for attending to the administration of the Estate. They had been so worried for him over the involvement of the former Attorney and felt helpless to be of assistance from such a distance. Without me, they felt, much if not all would have been lost and [the Deceased] would have suffered in his last years, rather than be at peace knowing that all was well and he was not being taken advantage of. For this, [the Deceased’s] family was adamant that I be compensated in a measure that to them was reflective of their appreciation of my personal attendances upon [the Deceased] and my professional assistance before and after his passing, as well as the peace of mind that I brought to [the Deceased] and [his] family, following the terrible experience he had with his former appointed Attorney.
There is a cultural element to this as well … Their generosity towards me was their way of repaying a social debt towards me, and showing in a fashion they deemed appropriate their gratitude and appreciation that a trusted person was found to support [the Deceased] to attend to his affairs before and after his passing.
… LG made it clear that he wished to confer a benefit on me as an expression of his gratitude for my role in handling matters on behalf of his brother, as outlined above, in addition to payment of my firms’ legal fees.
… I cannot now recite word for word how the figure of $100,000 was arrived at. I do recall, however, specifically advising LG that he was under no legal obligation to compensate me beyond payment of my firm’s legal fees.
Not true, it turned out
The Respondent admits that she altered the figures in Interim Summary Version #2 and Final Summary Version #2 to conceal from LG and LG’s daughter that she had taken $110,000 rather than $60,000 in executrix fees. In particular, the Respondent admitted that, under the Estate Income columns, she had changed two deposits of Estate funds to reduce the total income by $40,000, and the last income tax refund had been omitted. The Respondent admitted that, under the Estate Disbursement columns, she changed the executrix fees to be $50,000 less; the income tax refund of $5,945.92 was reflected as tax owing; there was an additional debit for accounting and she altered her last invoice.
Disbarment was imposed notwithstanding the attorney’s serious medical problems.
One effect of disbarment is a declaration that the Respondent is not suitable to practise law. Disbarment is not immediately necessary to protect the public in this case, as the Respondent is a former member and not able to practise law. However, that penalty serves to ensure that, should the Respondent apply in the future for reinstatement in the Law Society, a credentials hearing on that application for reinstatement must be held: Rule 2-85(11). Moreover, a lawyer who has been disbarred may not perform legal services for anyone, even for free: Legal Profession Act, section 15(3)Law Society of BC v. Power, 2009 LSBC 23 (CanLII)
The second case had superficially similar facts
In summary, the Respondent admits that she:
(a) intentionally misappropriated from trust the sum of $50,516.80 received on behalf of the estate she was representing;
(b) created 27 false bills for the estate and delivered them to her bookkeeper for the purpose of reconciling her trust account and concealing a trust shortage totalling $50,516.80; and
(c) misappropriated the sum of $4,312.91 and improperly withdrew the balance of $13,567.50 withdrawn from trust with respect to another estate.
In addition, the Respondent consented to an order that she be disbarred.
(Mike Frisch)