A B.C. lawyer wired $2.6 million to a company in Dubai, through his trust account, on behalf of a client who was under investigation by the U.S. Securities and Exchange Commission — just one of several instances of professional misconduct as determined by a Law Society of BC tribunal Sep. 7.
Neal Burton Wang committed professional misconduct three times and violated the Legal Profession Act four times; enough to raise money laundering concerns from the tribunal, which will now proceed with a disciplinary hearing, barring any appeal.
Between August 2017 and June 2018, the society alleged Wang used his trust account to disburse close to $3.2 million without providing substantial legal services or making reasonable inquiries and records about his clients — important steps to lessen the risk of money laundering occurring.
Wang deposited $2.9 million from client “WW” by September 2017, without having provided legal services. He was then told of the securities investigation by another client and associate of WW. Wang moved various smaller sums of money for WW and their spouse NW, via his trust account, until NW instructed Wang to wire much of it to a company in Dubai, in June 2018.
The society audited Wang and took him to a tribunal after claiming Wang performed little to no work for clients. The tribunal panel agreed with that assessment and found Wang backdated documents to prove otherwise.
In one instance, the panel found Wang's "accounts were backdated, and that [Wang] manufactured the dates and the bills to satisfy a Law Society auditor."
Although Wang contested the allegations, “The Panel does not accept that experienced counsel would have virtually no records to document or substantiate a file if the Respondent’s contention were to be accepted as true.”
Canada's legal industry is self-regulated by provincial law societies. Distance from government intervention is important to maintain an independence in the judicial system and protect solicitor-client privilege.
As such, to protect that privilege, lawyers are under no obligation to report large and suspicious transactions to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the country’s financial intelligence and anti-money laundering analysis agency. And because Wang failed to undertake the legal profession’s safeguards, the tribunal raised the spectre of money laundering risks in this instance.
“The risk of non-compliance is the perception of, and potential for, money laundering,” wrote the tribunal, citing findings by the Commission of Inquiry into Money Laundering in B.C., which concluded “an enormous volume of illicit funds are laundered through British Columbia’s economy every year with significant negative impacts on the people living in this province.”
“In the layering stage,” the tribunal stated, “the launderer engages in a series of transactions to distance the funds from their source (for example, by creating trusts or shell companies, buying securities, or buying real estate).”
“One of the clear conclusions of the Cullen Commission is that, where money launderers gain a stronghold, democracy and the rule of law suffers,” the tribunal stated.
With democracy on the line, according to the tribunal, it will proceed to a disciplinary hearing against Wang.