The B.C. Court of Appeal has largely dismissed the claim of a Richmond lawyer who was found to have committed professional misconduct when facilitating his clients’ suspicious real estate transactions, alleged to be part of a money laundering arrangement via phony building liens.
Spencer Owen May disputed the Aug. 31, 2021 decision of a Law Society of BC hearing panel that found he had misled the court by failing to disclose material information, including the whereabouts of his clients’ associates, and was otherwise incompetent in handling transactions.
May’s clients had been placing phony builder’s liens on homes in an attempt to recoup loans as part of an alleged money laundering scheme, according to a February 2018 newspaper report, stated the hearing panel’s decision.
When the society caught wind of the newspaper report it launched an investigation into May’s practice and found problems that it eventually took to a hearing.
The panel stated that May’s clients were conducting transactions that were under “objectively suspicious circumstances” and “cried out” for inquiry.
For example, the hearing panel ruled how “information that an ‘unsophisticated’ builder has loaned US$200,000 to a client, through a third party, via an account at a hotel in Las Vegas, requires exploration.”
However, the panel found May “did not ask any questions about this remarkable transaction” and “his failure to inquire is incompatible with the critical and analytic faculties competent lawyers are expected to bring to their practices.”
May also “deliberately chose to shield the court from information that [May] thought was dubious,” the panel found.
May’s “omission was misleading to the court because it left the court with the impression that there was no question as to whether [his client’s client] might be located in British Columbia.”
With the ruling, however, the panel did not deem May acted with dishonesty and both judgments noted May relied on translations, including from his paralegal to communicate with the clients.
May described his reaction to the newspaper article as one of “shock” and he did not want to act for the clients anymore and wanted to “fire” them, according to the ruling.
Justice Mary Saunders ultimately found no errors on the part of the hearing panel with respect to much of the proven allegations but did set aside the determination of paragraph 2(c) of the citation, which the panel found May in contravention of — that being he relied on an affidavit he knew or ought to have known was false.
Likewise, the society successfully cross appealed the hearing panel’s decision to dismiss paragraph 1(c) of the citation, which claimed May relied on his paralegal’s affidavit “when you knew or ought to have known that the affidavit was false or misleading in relation to a purported contract document between” clients.
The panel made clear in its ruling the seriousness of the type of misconduct found in May’s case: “A lawyer should be alert to and avoid unwittingly becoming involved with a client engaged in criminal activities such as mortgage fraud or money laundering.
“Vigilance is required because the means for these, and other criminal activities, may be transactions for which lawyers commonly provide services such as: establishing, purchasing or selling business entities; arranging financing for the purchase or sale or operation of business entities; arranging financing for the purchase or sale of business assets; and purchasing and selling real estate.”
May was called to the bar and admitted as a member of the society in May 2007. Since October 2015, he has practised at Campbell Froh May and Rice LLP, as a partner.
May has not faced a sanctions hearing given the ongoing appeal.