The B.C. Law Society has taken over part of the practice of a Richmond real estate lawyer, Hong Guo, and continues to investigate after $7.5 million disappeared from her firm’s trust account.
Postmedia has reported a number of Chinese investors and B.C. real estate professionals are suing Guo, alleging $2.1 million in losses, after Guo says more than $7.5 million was stolen from her trust account in early 2016. The trust fund shortage affected property transactions and left a number of Chinese investors unable to pay tax bills on Canadian real estate transactions, legal filings say.
The Society has taken custody of the affected trust account, at CIBC, and has imposed conditions on Guo’s firm, documents filed in B.C. Supreme Court say. One of the conditions is that any client transactions made from the account must be signed by a second lawyer that is approved by the society.
“The Law Society’s investigation of Hong Guo’s conduct is ongoing and it would be premature to speculate as to the outcome of that investigation,” spokesman David Jordan stated in an email.
Meanwhile, several of the Chinese real estate investors affected by the trust shortage have obtained judgments against Guo, legal filings say.
In a letter to the lawyer of Zhaoyan Wang, one of the clients who has sued Guo, B.C. Law Society manager of custodianships Michael Rhodes says: “The powers of the custodian are limited … and the custodian has no power to pursue assets of Ms. Guo or the law practice.”
The letter says that, “at this point, the total shortage in the account is $5.5 million … if we receive funds, we intend to distribute them pro-rata among those who have suffered a loss.”
Rhodes also writes that, “at least two (clients) have obtained judgments and at least one has begun taking steps to execute on their judgment … if those parties are successful in obtaining funds from Ms. Guo … their actions may reduce options or opportunities for other parties wishing to recover from Ms. Guo.”