A West Vancouver lawyer has been suspended for two weeks for professional misconduct for allowing corporate clients to move US$473,000 through his trust accounts without asking questions about it or providing legal services.
Douglas Joseph William Hammond’s suspension began July 2 following a decision by a disciplinary panel of the B.C. Law Society.
Hammond admitted that he committed professional misconduct when he allowed an investor to use his trust account in 2016 to make payments to a corporation “without providing any related legal services and (failing) to make and record inquiries about the circumstances of the matter,” according to the law society decision.
The law society submitted Hammond’s conduct relates to areas of “vital importance ... ensuring the appropriate use of trust accounts and combatting money laundering.”
Several red flags should have prompted Hammond to refuse to allow his trust account to be used before asking further questions, according to the law society, including the fact he didn’t meet the investor in person or verify his identity, that multiple corporate entities were involved and that no legal services were requested.
Hammond’s failure to ask questions “created an unacceptable risk of inadvertently allowing the trust account to be utilized in money laundering or other nefarious dealings,” according to the written decision.
Lawyers, wrote the panel, “are required to act as gatekeepers of their trust accounts” to make sure their accounts “are not conscripted into money laundering activities.”
Mitigating factors included the fact Hammond only became involved through a trusted legal acquaintance of many years, had some familiarity with one corporation involved and that the funds were being transferred between Canadian banks.
Hammond agreed to the two-week suspension, telling the panel he now has a heightened sensitivity to the issue. He also agreed to pay $1,000 in costs to the law society.