Law Times

Law timeS • September 7, 2010 NEWS PAGE 3 BY MICHAEL McKIERNAN Law Times Toronto lawyer has had his licence revoked for his role in a set of mort- gage scams that began shortly after he entered the profession. A disciplinary panel of the Disbarred lawyer's scams began within months of call A despite shortfalls in the closing funds that ranged from $8,000 to as much as $316,000. Senjule repeatedly disbursed Law Society of Upper Canada found Dunstan Dan Senjule was a knowing participant in 23 fraudulent transactions over a period of 2 1/2 years, the fi rst of which occurred within months of his call to the bar in April 2002. Th e 23 suspi- cious mortgages on 15 diff er- ent properties were worth a combined total of $5.9 mil- lion. While he later attempted to make amends, the money to do so came from other clients, the ruling noted. "Th e evidence of fraudulent activity on the part of Mr. Sen- jule is clear and cogent," Bench- er Ross Murray wrote on behalf of the three-person panel in a decision earlier this year. After a further hearing on penalty, the panel issued its fi ndings late last month disbarring Senjule and ordering him to pay $85,000 in costs. Murray, again writing for the panel, acknowledged Sen- jule had made partial restitution but said that wasn't a mitigating factor in this case. "Unfortunately, Mr. Sen- jule actually took money from other clients in order to make his restitution," Murray wrote. "Furthermore, he made resti- tution only after the law soci- ety notifi ed him that they were investigating." Th e LSUC's costs amount- ed to $170,000, double the amount Senjule must pay. About $90,000 went to ex- pert fees, including a forensic auditor's report that identifi ed serious concerns with Senjule's conduct. "A reasonably competent lawyer would have either known or suspected that the lending transaction on the 15 proper- ties were artifi cial and either would not have participated in the transaction or would have informed the lenders of the ar- tifi ciality or suspected artifi cial- ity," the report states. According to a law society factum fi led in November, the transactions bore several hall- marks of fraud, including price escalations, unpaid deposits, and payments to and from non- parties to the mortgage. Senjule closed his fi rst sus- picious transaction in October 2002, just six months after his call to the bar. Th e fi nal one came in June 2005 shortly be- fore the law society stepped in. Th e obviousness and rep- etition of the red fl ags consti- tuted evidence of fraud that was "impossible to ignore," ac- cording to the factum. At the very least, the law society said, Senjule had been wilfully blind in failing to ask simple and reasonable questions about the transactions, such as why ven- dors were still willing to close mortgage funds in the days, weeks, and months before reg- istering a transfer and charge or searching title. In fi ve cases, he failed to register a charge or transfer at all, leaving the lender completely exposed without any security for the loan. In some cases, Senjule acted for the vendor, purchaser, and lender without the latter's con- sent, according to the factum. Th e law society also said several properties were resold within short time periods for much higher prices. In two cases, the Royal Bank expressly asked Sen- jule to check for signifi cant es- calations, but he failed to report them. One property increased 79 per cent in fi ve months, while the other went up by 16 per cent over four months. In 11 of the transactions, Senjule paid all or most of the mortgage funds or sale proceeds to non-parties, including one recipient who was a witness at his wedding. In addition, the law society factum pointed out that the lawyer would have received numerous publications from the LSUC and LawPRO about fraud prevention and red fl ags to watch for during the period in question. But it also revealed that Senjule would have had more experience with the issue than the average lawyer. In June 2002, before any of the fraudu- lent mortgage transactions took place, he was present when law society investigators paid a visit to the offi ce he shared with his SEEKING TOP PROFESSIONALS DAMAGES QUANTIFICATION AND BUSINESS VALUATION FTI Consulting Canada requires entry and mid level professionals for its growing domestic and international business valuation and damage quantifi cation practices. Our Toronto based group works on some of the largest and most complex cases in Canada and around the world. There are also positions available for our London UK offi ce. We are looking for independent thinking professionals with a background in accounting and/or economics who are interested in furthering their education through the Canadian Institute of Chartered Business Valuators (leading to a CBV designation). A Masters in Accounting, Finance, Economics; or a professional accounting designation is required. Candidates must have problem solving skills, the ability to communicate clearly, and be able to work effectively in teams within a creative environment. If you are interested in pursuing this opportunity, please reply in confi dence with your CV to: Anna McGrath anna.mcgrath@fticonsulting.com FTI_LT_Aug23_10.indd 1 8/18/10 9:57:27 AM wife, who is also a lawyer, to investigate complaints about her involvement in suspicious mortgages. Regina Senjule would eventually receive a fi ve- month suspension in 2007 for her actions. Senjule couldn't be reached for comment. 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