Admitted Discipline Violations

David Jacob Siebenga

Surrey, BC

Called to the bar: June 12, 1987

Ceased membership: December 31, 2019

Admission and undertaking accepted: April 29, 2020

AGREED FACTS

David Jacob Siebenga and Sanda Ling King established the Siebenga & King Law Corporation with main areas of practice in real estate and conveyancing. They had a number of trust accounts and a general account. Siebenga and King were the only signatories to their trust accounts. They employed several administrative and conveyance staff to carry out their high volume real estate conveyance practice, under their supervision.

The ordinary practice of the firm for real estate conveyance matters was to confirm the statement of account in an Order to Pay that was approved by the client around the time of closing. In matters where the total anticipated liabilities and the firm’ s statement of account did not use all of the funds held in trust for a client, money was left over in the trust account. In some cases, the firm would then issue a cheque to the client for the residual balance. If the cheque was not cashed within six months of issue, the cheque would become stale-dated. In some cases, the firm would not issue a cheque to the client for the leftover funds and the residual balance was held in trust, unresolved, for extended periods of time.

Siebenga & King Law Corporation’ s bookkeeper prepared a trust liability report on a monthly basis, which she provided to Siebenga and King for their review with the monthly trust reconciliations. It provided the amounts and the aging of the firm’ s outstanding trust liabilities, including all stale-dated cheques and residual balances.

When the firm issued a statement of account to a client, the billed amount was not immediately withdrawn from trust and deposited into the firm’ s general account. It used a “ fee ledger” system and each trust account had a separate fee ledger. The amount in the statement of account would be transferred from the client ledger to the respective fee ledger in the firm’ s trust account. The bookkeeper would periodically review the fee ledgers and prepare a single cheque from each trust account into the firm’ s general account for the total amount of fees recorded as due from clients. Siebenga and King signed the cheques to authorize the transfer of funds from fee ledgers in the trust accounts to the general account. The cheques included amounts that had not been properly billed to the client and were not authorized for withdrawal.

In 2009, Siebenga and King completed their trust report and answered no to a question asking if the practice had outstanding stale-dated cheques during the reporting period. Siebenga answered no when he knew or ought to have known that his answer was incorrect.

The firm received notification that the Law Society’ s Trust Assurance department would be conducting a scheduled compliance audit. Under Siebenga’ s direction before the audit, he and King began a process of reversing stale-dated cheques and paying the reversed amounts into the firm’ s general account and paying unresolved residual balances held in trust into the firm’ s general account. In total $12,971.51 was wrongly transferred in 158 instances prior to the audit. The firm had no entitlement to the misappropriations. To create apparent justification for the misappropriations, Siebenga and King each participated in the creation of 197 false statements of account, either backdated or with no dates.

Siebenga and King exchanged email communications about the misappropriations and invoices before the audit. Siebenga sent instructions to King on how to create invoices for “ earlier dates” and warned to use the appropriate tax rate for the date of the invoice. There was ongoing exchange between them for several weeks about the preparation of client invoices. King emailed Siebenga documents that included draft invoices that were backdated and never delivered to the clients. The fees and disbursements in the invoices had not actually been incurred and were not properly charged to clients. The invoices were created to mislead the Law Society auditor. The misappropriations were not discovered during the audit.

After the 2009 audit concluded, the process of reversing stale-dated cheques and transferring those trust funds into the firm’ s general account continued, as well as transferring unresolved residual balances from trust accounts to the general account. Between 2009 and 2013, further misappropriations occurred in 257 instances for a total sum of $50,858.01.

In 2012, Siebenga and King completed the firm’ s trust report for the previous year and answered “ no” to the question asking whether the practice had outstanding stale-dated cheques issued from the trust account. Siebenga ought to have known his answer was incorrect.

The Law Society’ s Trust Assurance Department carried out another compliance audit of the firm’ s practice in 2012. The audit identified numerous concerns, including the issue of reversing stale-dated cheques and paying client trust funds into the firm’ s general account. Siebenga and King responded and provided 214 false statements of account to justify the further misappropriations. Siebenga knew or ought to have known that the later invoices were backdated to create the appearance they were prepared before their actual date of creation, were not delivered to the clients and included fees and disbursements which had not incurred or were not properly charged to clients.

The Law Society’ s Trust Assurance department referred the matter to the Professional Regulation department. The Chair of the Discipline Committee ordered an investigation of the books, records and accounts of the firm pursuant to Rule 4-43 [now Rule 4-55] of the Law Society Rules. A Law Society forensic auditor conducted the Rule 4-43 investigation and delivered a final report with the findings.

ADMISSION AND UNDERTAKING

Siebenga admits that he misappropriated a total of $63,829.52 on 415 occasions, created 197 false statements of account and gave incorrect answers in two trust reports when he knew or ought to have known the answer was not true. He admits that these actions constitute professional misconduct.

Siebenga agreed to undertake for 15 years, commencing on April 23, 2020:

• not to engage in the practice of law in British Columbia with or without the expectation of a fee, gain or reward, whether directly or indirectly;
• not to apply for re-instatement to the Law Society of British Columbia;
• not to apply for membership in any other law society (or like governing body regulating the practice of law) without first advising in writing the Law Society of British Columbia; and
• not to permit his name to appear on the letterhead of, or work in any capacity whatsoever, for any lawyer or law firm in British Columbia, without obtaining the prior written consent of the Discipline Committee of the Law Society.

Should Siebenga wish to apply for reinstatement to the Law Society when his undertaking expires in 2035, he will have to satisfy the Law Society’ s Credentials Committee that he is of sufficiently good character and repute to practise law in BC.

Rule 4-29 Admission of Misconduct and Undertaking to Discipline Committee