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Money-laundering red flags raised in lawyer case

Lawyer suspended after millions from Hong Kong, Panama, Singapore went through trust account
Florence Esther Louie Yen has been suspended after millions from Hong Kong, Panama, Singapore went through trust account

A finding that a Vancouver lawyer let a client use her trust account as a personal bank has led to a three-month suspension after the profession’s regulator found Florence Esther Louie Yen committed professional misconduct for permitting deposits of about US$10 million and C$1.27 million.

“We find the respondent’s wilful blindness in allowing her firm’s trust accounts to be used by PL [the lawyer’s client] effectively as his private bank account warrants significant rebuke and attracts a lengthy suspension,” a Law Society of B.C. July decision released Sept. 7 said.

A society hearing panel found Yen dispersed the funds without providing substantial legal services about transactions, and without making necessary inquiries, recording inquiries’ results or recording the source of the funds starting in 2015.

Yen argued that a 2019 rule that funds paid in and out of trust accounts must be related to legal work was a significant change.

The society disagreed.

“The law society put in evidence publications dating back as far as the late 1990’s warning lawyers against getting unknowingly involved in illegal activities such as money laundering, and warning against becoming, in effect, a banker for the client,” a September 2020 decision said.

“She utterly failed in fulfilling her duty as gatekeeper of her firm’s trust accounts, the panel found.

The situation had a number of red flags that should have troubled Yen, the society said.

The July penalty decision released Sept. 7 also ordered Yen to pay $35,209 in costs.

However, the society is seeking a review of the penalty and will be asking the review board for greater discipline measures.

Yen is also seeking a review of the findings of professional misconduct and characterization that she was wilfully blind.

A society decision shows the Royal Bank had concerns about transactions, which were coming from Hong Kong, Panama, Singapore and a Singapore bank via Luxembourg. The bank said that denoting the deposits as gifts or as being for failed real estate transactions was suspect.

An unexplained note from a meeting also mentions ‘laundering’ although it remains unknown if the reference is to money laundering.

PL had been Yen’s client since 2007, mainly dealing with business ventures in Vancouver and Burnaby.

The transactions in question began after PL contacted Yen from Hong Kong saying his uncle’s foundation wanted to invest in Canada, that there was a property that he was looking at purchasing and that he would be receiving funds from his uncle as a gift or loan.

The society said the funds were for a real estate transaction. On the day the money arrived, PL said the deal had fallen through and that he wanted to access the money.

Yen had never seen the offer on the property, despite asking for the contract of purchase and sale. 

Funds continued to arrive and bank drafts were made to PL’s companies.

“Over the next two years, funds continued to be deposited to the trust account, and in similar fashion, these monies were disbursed to a variety of other law firms, to
investment entities, to currency exchange companies, to companies controlled by PL and to PL personally,” the decision said.

It further said Yen asked no further questions of PL as to why the trust fund was being used to receive and disburse funds where the firm was doing legal work in only four of 30 instances in connection with the disbursed funds.

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