The real estate and immigration lawyer who failed in a 2018 bid for the Richmond mayoralty is guilty of professional misconduct, according to a Law Society of British Columbia tribunal.
In a Nov. 4 decision, the tribunal found Hong Guo failed to supervise a bookkeeper, improperly delegated trust accounting to him, misappropriated funds and breached law society undertakings and orders.
Guo had alleged that bookkeeper Zixin “Jeff” Li took $7.5 million from her firm’s trust accounts for 100 clients in 2016, laundered the cash at a casino and fled to China.
A disciplinary hearing is scheduled for two days in March 2021. Guo could face reprimand, a maximum $50,000 fine, conditions or restrictions on her practice, a suspension, or even expulsion from the legal profession.
“Although the theft amount was $7.5 million, in fact only $6.7 million was actually paid out by the banks because the last cheque was caught by the bank before it cleared,” said the Law Society’s ruling. “The panel found that the sheer volume of her practice made it improbable Guo could properly supervise the accounting department and employees.”
Guo had signed blank trust cheques and left them with Li before departing on a two-week vacation in March 2016. She claimed some of the blank cheques were forged, but did not provide evidence at the hearings, which ran 10 days in February and June.
“The bookkeeper was able to orchestrate the theft by crediting fake deposits to a trust account ledger he had set up in a former conveyancing assistant’s name, thereby inflating the apparent balance available for withdrawal,” the ruling said. “From late February to March 31, 2016, $7.5 million in trust funds were provided to the former conveyancing assistant using the pre-signed blank trust cheques. On April 1, 2016, Guo discovered the theft when she could not find her bookkeeper to review her monthly trust reconciliation statements.”
By early 2018, Guo had deposited $2.6 million of family money and $4 million from an insurance policy to repay the trust account. The Law Society issued the citation against Guo in September 2018.
The panel also found that after Guo discovered the theft, “she misappropriated or improperly withdrew three separate clients’ trust funds [worth more than $649,000] when there were insufficient funds on deposit to the credit of other clients.”
Guo also manipulated trust account records to allow her to use other clients’ funds to complete transactions.
“While Guo deposited $1.69 million in family funds, the funds were not allocated to particular clients or client files, making it difficult to determine the amount of funds actually on deposit, and most of the funds had been paid to close other transactions,” the ruling said. “In one instance, Guo delayed paying half of the real estate commission, some unpaid strata fees and her legal account for fees, disbursements and taxes to reduce the impact of the theft.”
The tribunal’s decision also said Guo deposited almost $197 million into a trust account, but withdrew $7.27 million via cheques that had not been signed by a second signatory.
Guo originally came to Canada in 1993 and studied law at the University of Windsor. She worked in the State Council in China’s central government and was called to the B.C. bar in 2009.
Guo finished fourth in the mayoral election in 2018 after an interview with theBreaker.news in which she denied the existence of China’s well-documented human rights abuses.
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