Law Times

Law Times • February 13, 2017 Page 3 www.lawtimesnews.com Lawyer disbarred for role in investment scheme BY ALEX ROBINSON Law Times T he 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 An- derson-Clarke's licence, deem- ing she had engaged in profes- sional misconduct by knowingly assisting in "dishonest conduct." Five investors made com- plaints to the law society about their dealings with Anderson- Clarke. They individually en- tered investment agreements with a United States-based com- pany, 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 to- gether, they entrusted her with more than $8 million. Anderson-Clarke then re- leased those funds to A.I. and its representatives under the in- struction of the company, but without the consent of the inves- tors, according to the decision. "For each of the five particu- lars relating to each investor, we find that the Lawyer knew, was reckless or wilfully blind to the dishonest conduct that she as- sisted," bencher Anne Vespry wrote in the decision, Law Soci- ety of Upper Canada v. Ander- son-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 re- cover the funds at the time of the law society hearing. The investment agreements promised abnormally high re- turns without clarity on how they would be generated — some- thing Dennis Wiebe, a partner with Dentons Canada LLP, said should have been one of a num- ber of red f lags for the lawyer. Wiebe provided expert opinion in the tribunal proceedings. The investment agreements were also "vague, internally in- consistent and nonsensical in parts" and were clearly not in the interests of the investors, accord- ing to the decision. "Even to a lawyer inexperi- enced in such matters, it should have been clear that something was wrong," Vespry wrote in the decision. Other red f lags Wiebe iden- tified included the fact that the agreements gave granting power to A.I. as an "authorized agent." "While Mr. Wiebe's experi- enced opinion lists many factors that should alert a lawyer versed in financing matters, we rely on the common sense proposition that an offer of something for nothing, or high return for no risk, constitutes a red f lag that any reasonably competent law- yer would see as a cause for, at the very least, further investigation," Vespry said in the decision. The tribunal found that An- derson-Clarke did not engage in any investigation concerning the agreements and did not con- sult more experienced counsel about the obligations in holding an escrow account. When she received requests from investors asking for infor- mation 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 con- tinued 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 dishon- est conduct when she accepted money from some of the latter investors into escrow accounts. Anderson-Clarke did not respond to a Request to Admit detailing the allegations against her, which under the law soci- ety's rules, means she is "deemed to admit the facts it sets out." Anderson-Clarke, however, has since submitted that she does not accept the allegations, and said that she did not become aware of the fraud until after it was too late and the funds were lost. She also said that if she had contested the allegations, it would have been her position that her medical condition and stress in her life had impaired her ability to see the red f lags. "It is important to under- stand that Ms. Anderson-Clarke does not admit the allegations that she knowingly participated in the investment fraud. If not for her extenuating personal circumstances, she would have led evidence vigorously disput- ing those allegations," says John Dent, the lawyer who represent- ed Anderson-Clarke. "She understood that by not contesting the allegations, her licence would be revoked. She is focused now on her well-being, and the well-being of her family." In addition to disbarring An- derson-Clarke, the law society fined her $12,000, which she has to pay within five years. Anderson-Clarke's husband, Edmund Clarke, has also been disbarred. The Law Society of Upper Canada revoked his licence in 2010, after a disci- plinary tribunal found he had knowingly participated in mort- gage fraud to induce a lender to approve mortgage loans to An- derson-Clarke. In 2003, a law society hear- ing panel found that Clarke had misappropriated and misap- plied trust funds and had failed to maintain books and records. He was subsequently suspended for a month. LT NEWS A Richmond Hill lawyer has been disbarred after an LSUC tribunal found that she acted as an escrow agent in an illegitimate investment scheme. MATTER CREDENTIALS TORONTO I BARRIE I HAMILTON I KITCHENER 1-866-685-3311 I www.mcleishorlando.com A Noticeable Difference ™ Choosing a personal injury lawyer is one of the most important decisions an injured person will make. Help your client ask the right questions: Is the lawyer? Untitled-4 1 2015-02-17 10:59 AM

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