Law Times

Law Times • OcTOber 24, 2011 NEWS PAGE 3 61-year-old former law- yer in Peel region ac- cused of defrauding six victims of $4.8 million between 2003 and 2010 was before the Ontario Court of Justice last week following a major inves- tigation by the Peel Regional Police fraud bureau. "I think the whole thing is surprising, to be honest," says a Peel-area lawyer who knew the accused but asked to remain anonymous. "In fairness to him, I've known him for a long time, and he never seemed like someone who would have these sorts of problems." Investigators arrested Rich- ard Chojnacki on Oct. 7 and charged him with defraud- ing the public. According to a statement issued by Peel po- lice, investigators allege Cho- jnacki accepted personal funds entrusted to him by his clients either to be held in trust or as short-term personal loans known as promissory notes. Later, the victims allegedly dis- covered their promissory notes were worthless and the money had disappeared. "It looks as though it was a case of the victims trusting that he would hold onto their money, and the suspect ended up defrauding his customers into the millions of dollars," says Peel police Const. George Tudos. "It looks like this was just another instance where someone used their role within the community to take advan- tage of the victims just to try and better himself and he end- ing up getting caught." Th e criminal allegations against Chojnacki haven't been proven in court, however, and it isn't clear whether the six vic- tims in the case launched by Peel police are the same ones involved in the matter that led to Chojnacki's disbarment last year. "Within the limits permitted by the Law Society Act, the law society co-operates thoroughly with law enforce- ment. We cannot discuss our handling of specifi c investiga- tions," says Law Society of Up- per Canada communications adviser Susan Tonkin. Th e law society revoked Chojnacki's licence in October 2010 after a panel found he had misappropriated roughly $3 million from funds he held in trust for toy companies RP Toys Ltd. and Patch Products Inc. Th is was in addition to almost $500,000 taken from funds held in trust for two other clients. Th e panel found Chojnacki had deposited the funds into his general and per- sonal accounts, as well as those of unrelated third parties. Besides disbarring him, the LSUC panel ordered Chojnacki to pay $277,205 in costs. It's not clear whether Chojnacki has since made the payments. At the same time, the Supe- rior Court appointed the law society trustee of Chojnacki's Disbarred lawyer now facing criminal charges A BY KENDYL SEBESTA Law Times practice early in 2010 after he abandoned it. Chojnacki's case isn't unique, however, as several other On- tario lawyers have faced accusa- tions of misappropriating mon- ey held in trust. According to a 2010 LSUC report, roughly 29 per cent of discipline matters that year related to mishandling of trust accounts, misappropria- tion, and real estate or mortgage schemes. In Chojnacki's case, it isn't clear what will happen to the six victims' money should the court fi nd him guilty. "In some cases, people's money is insured, but I don't know if it is in this circumstance," says Tudos. "I would hope so. Th at's really a large sum of money to be miss- ing, especially since money isn't easy to come by these days. I mean, $20 is a lot these days, let alone millions." At the same time, the LSUC runs a compensation fund for members of the pub- lic who are victims of lawyer dishonesty and have suff ered a fi nancial loss. If Chojnacki is found guilty of defrauding the public, the six victims in this case could apply to the fund and potentially receive a maxi- mum of $150,000 per per- son, according to the LSUC's guidelines. Chojnacki was called to the bar in 1985. At the time of his hearing, he practised at a law fi rm vari- ously named Chojnacki O'Neil & Associates and Chojnacki Ford O'Neil. Despite the fi rm LSUC DISCIPLINE MATTERS BY TYPE OF CASE IN 2010 FINANCIAL (Mishandling trust accounts, misappropriation, real estate/mortgage schemes) ......... 29% GOVERNANCE (Failure to co-operate with LSUC, unauthorized practice) .............................................. 42% INTEGRITY (Civility, counselling/behaving dishonourably) ................................................................44% CLIENT SERVICE ISSUES (Fail to account, fail to communicate, fail to serve client) ............................................... 45% SPECIAL APPLICATIONS (Capacity, good character) ..............................................................................................5% Source: Law Society of Upper Canada. Figures are greater than 100 per cent because some fi les raise more than one issue. PERCENTAGE OF TOTAL CASES CONFLICTS (Lawyer in position of confl ict, business/fi nancial relations with client)........................... 5% names, Chojnacki held clients and his trust and general ac- counts independently. According to the Criminal Code, if Chojnacki is convict- ed of defrauding the public, he could face up to 10 years in prison. If you don't oppose the omnibus crime bill, who will? Untitled-1 1 www.lawtimesnews.com 11-10-17 10:04 AM

• Cover
• Extreme Delay
• Polite Affair
• Focus On Trusts & Estates Law