Citation issued: September 4, 2018
Hong Guo
Citations are authorized by the Law Society of BC's Discipline Committee and list allegations against a lawyer that will be considered at a discipline hearing. Please note that allegations in a citation are unproven until a discipline hearing panel has determined their validity.
Nature of conduct to be inquired into:
Breach of Accounting Rules
1. Between approximately January 2014 and October 2016, you failed to maintain accounting records in compliance with the provisions of Part 3, Division 7 of the Law Society Rules and in particular you did or failed to do one or more of the following:
(a) between January 2014 and March 2016, you did not prepare monthly trust reconciliations of your pooled trust accounts, within 30 days of the effective date of the reconciliation or at all, in one or more of the eighty-five (85) instances set out in Schedule “A” to this citation, contrary to Rule 3-73;
(b) between January 2014 and April 2016, you failed to retain all supporting documentation for your trust accounts including bank statements, cancelled cheques, and bank deposit slips, contrary to Rule 3-67, including some or all of:
(i) [Bank 1] Trust Account No. [number] cancelled cheques for January 2014 to April 2014, August 2014 to December 2014 and December 2015 (1,039 missing cheques);
(ii) [Bank 1] Trust Account No. [number] deposit slips for January 2014 to January 2015, and March 2015 to April 2016 (153 missing deposit slips);
(iii) [Bank 2] Trust Account No. [number] (“[Bank 2] Trust Account”) deposit slips for June 2015 to December 2015 (47 missing deposit slips);
(iv) [Bank 3] Trust Account No. [number] (later renamed [Bank 3] Trust Account No. [number]) cancelled cheques for June 2014 and August 2014;
(v) [Bank 3] USD Trust Account No. [number] (later renamed [Bank 3] Trust Account No. [number]) deposit slips for June 2014, April 2015 and June 2015;
(vi) [Bank 4] Trust Account No. [number] cancelled cheques for March 2014 to May 2014 and November 2015;
(vii) [Bank 4] Trust Account No. [number] deposit slips for February 2014, November 2014 and December 2014;
(viii) [Bank 1] Trust Account No. [number] (“Old [Bank 1] Trust Account”) cancelled cheques for January 2014 to April 2014, December 2014 and December 2015;
(ix) [Bank 1] Trust USD Account No. [number] cancelled cheques for August 2014 to December 2014 and July 2015;
(x) [Bank 1] Trust USD Account No. [number] deposit slips for February 2014 to December 2014;
(xi) [Bank 3] General Account No. [number] (later renamed [Bank 3] Trust Account No. [number]) deposit slips for August 2014 to March 2015, June 2015 and December 2015;
(xii) [Bank 2] General Account No. [number] deposit slips for September 2014 to August 2016;
(xiii) [Bank 1] General Account No. [number] deposit slips for July 2014; and
(xiv) [Bank 1] General Account No. [number] deposit slips for April 2016.
(c) in one or more of thirty-nine (39) instances set out in Schedule “B”, you withdrew trust funds from your [Bank 2] Trust Account when there were insufficient funds held to the credit of the client, contrary to Rule 3-64(3)(b);
(d) you failed to report to the Executive Director a trust shortage greater than $2,500.00 in one or more of thirty-four (34) of the thirty-nine (39) instances set out in Schedule “B”, contrary to Rule 3-74;
(e) in one or more of four instances between July 10, 2015 and March 31, 2016, you failed to report to the Executive Director that your [Bank 2] Trust Account was overdrawn by more than $2,500.00, contrary to Rules 3-63 and 3-74;
(f) in one or more of seventeen (17) instances set out in Schedule “C”, you withdrew trust funds from your Old [Bank 1] Trust Account when there were insufficient funds held to the credit of the client, contrary to Rule 3-64(3)(b);
(g) you failed to report to the Executive Director a trust shortage greater than $2,500.00 in one or more of fourteen (14) of the seventeen (17) instances set out in Schedule “C”, contrary to Rule 3-74;
(h) between April 4, 2016 and April 11, 2016, in one or more of in ten (10) instances set out in Schedule “D”, you withdrew or authorized the withdrawal of a total of $1,870,123.08 in trust funds from your [Bank 2] Trust Account by way of debit memo, contrary to Rules 3-64(4) and (7);
(i) between approximately February 2016 and March 2016, you gave a non-lawyer one or more of 112 pre-signed blank trust cheques for your [Bank 2] Trust Account, contrary to Rule 3-64 and rule 6.1-3 of the Code of Professional Conduct for British Columbia (the “BC Code”);
(j) between March 11, 2016 and March 30, 2016, you permitted a non-lawyer to issue one or more of ninety (90) trust cheques drawn on the [Bank 2] Trust Account totaling $44,731,730.65 without proper supervision, contrary to contrary to Rule 3-64 and rule 6.1-3 of the BC Code;
(k) on or about March 11, 2016, you gave a non-lawyer one or more of five pre-signed blank trust cheques for your Old [Bank 1] Trust Account, contrary to Rule 3-64 and rule 6.1-3 of the BC Code;
(l) between March 15, 2016 and March 30, 2016, you permitted a non-lawyer to issue one or more of five trust cheques drawn on the Old [Bank 1] Trust Account totaling $8,426,333.41 without proper supervision, contrary to Rule 3-64 and rule 6.1-3 of the BC Code;
(m) in or about March, 2016, you gave a non-lawyer one or more of three pre-signed blank trust cheques for your [Bank 3] Account No. [number] and [Bank 1] Trust USD Account No. [number], contrary to Rule 3-64 and rule 6.1-3 of the BC Code; and
(n) commencing January 2016 onwards, you failed to maintain sufficient funds on deposit in your [Bank 2] Trust Account and Old [Bank 1] Trust Account to meet your obligations with respect to funds held in trust for your clients, contrary to Rule 3-63.
This conduct constitutes professional misconduct or a breach of the Act or Rules, pursuant to section 38 of the Legal Profession Act.
Failure to Supervise/Improper Delegation
2. Between approximately January 2016 and March 2016, you failed to properly supervise your bookkeeper JL or improperly delegated your trust accounting responsibilities to him, or both, thereby facilitating the misappropriation of a total of $7,506,818.00 from [Bank 2] Trust Account No. [number] (“[Bank 2] Trust Account”), contrary to Rule 3-64 of the Law Society Rules or rule 6.1-3 of the Code of Professional Conduct for British Columbia, or both.
This conduct constitutes professional misconduct or breach of the Act or rules, pursuant to s. 38(4) of the Legal Profession Act.
Misappropriation/Improper Withdrawal
3. Commencing in April 2016, you misappropriated, or improperly withdrew client trust funds from your [Bank 1] Trust Account No. [number] when your trust accounting records were not current and there were insufficient funds on deposit to the credit of the clients on whose behalf you made the withdrawals, contrary to one or both of Rule 3-63 or Rule 3-64 (3) of the Law Society Rules, on one or more of the following occasions:
(a) between April 11, 2016 and July 26, 2016, you withdrew trust funds totaling $1,909,198.02 on behalf of your client TZ (Matter #160406 and #160353) when you held only $1,270,508.59 to the credit of that client resulting in a trust shortage of $638,689.43;
(b) on or about June 8, 2016, you withdrew trust funds of $5,250.00 on behalf of your client YS (Matter #160354) when you held no funds to the credit of that client resulting in a trust shortage of $5,250.00; and
(c) between approximately April 8, 2016 and April 11, 2016, you withdrew trust funds totaling $744,454.40 on behalf of your client HL (Matter #160402) when you held only $738,970.59 to the credit of that client resulting in a trust shortage of $5,483.81.
This conduct constitutes professional misconduct or breach of the Act or rules, pursuant to s. 38(4) of the Legal Profession Act.
Breach of Undertaking to Law Society
4. Between approximately April 20, 2016 and August 17, 2016, you breached your undertaking dated April 19, 2016 to the Law Society of British Columbia (the “Undertaking”), contrary to rules 7.1-1(f) and 7.2-11 of the Code of Professional Conduct for British Columbia, by doing one or more of the following:
(a) failing to immediately open a new trust account for new client matters, contrary to paragraph 1(d) of the Undertaking;
(b) depositing trust funds totaling $196,613,345.22 into [Bank 1] Trust Account No. [number] in connection with one or more of 165 new client matters, contrary to paragraph 1(d) of the Undertaking; and
(c) between June 8, 2016 and July 12, 2016, withdrawing trust funds totaling $7,269,159,28 by way of one or more of thirty (30) cheques that had not been signed by a second signatory, contrary to paragraph 1(e) of the Undertaking.
This conduct constitutes professional misconduct, pursuant to s. 38(4) of the Legal Profession Act.
Breach of Law Society Order
5. You failed to comply with an interim Order made by Three Benchers on August 17, 2016 (the “August Order”), contrary to rule 7.1-1(e) of the Code of Professional Conduct for British Columbia, by doing one or both of the following:
(a) between August 18, 2016 and September 20, 2016, depositing trust funds totaling $24,446,106.29 into [Bank 1] Trust Account No. [number] in connection with one or more of twenty-eight (28) new client matters, contrary to paragraph 1(l) of the August Order; and
(b) on or about December 14, 2916, making a $80,000.00 payment to M. Inc., a client affected by a shortage in your [Bank 2] Trust Account No. [number], without the knowledge or consent of the custodian, contrary to paragraph 1(d) of the August Order.
This conduct constitutes professional misconduct pursuant to s. 38(4) of the Legal Profession Act.