Sanda Ling King
Surrey, BC
Called to the bar: February 20, 1998
Ceased membership: December 31, 2019
Admission and undertaking accepted: April 29, 2020
AGREED FACTS
Sanda Ling King and David Jacob Siebenga 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. King and Siebenga 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 amount of the firm’ s 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 money 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.
Siebenga & King Law Corporation’ s bookkeeper prepared a trust liability report on a monthly basis, which she provided to King and Siebenga 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When the firm issued a statement of account to a client, the billed amount was not immediately withdrawn from trust and deposited into the firm’ s general account.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. King and Siebenga 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. King answered no when she knew or ought to have known that her 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, King and Siebenga 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.
King and Siebenga 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, King and Siebenga 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. King ought to have known her 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. King and Siebenga responded and provided 214 false statements of account to justify the further misappropriations. King 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 been incurred or were not properly charged to clients.
The Law Society’ s Trust Assurance department referred the matter to the Professional Regulation Department. A Law Society forensic auditor conducted an investigation pursuant to Rule 4-43 [now Rule 4-55] of the Law Society Rules.
ADMISSION AND UNDERTAKING
King admits that she 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 she knew or ought to have known the answer was not true. She admits that these actions constitute professional misconduct.
King wrote a letter to the Law Society’ s investigator and acknowledged her wrongdoing. She wrote that she did not dispute what happened, though she does not recall inserting the dates and other details. She said after she merged her practice with Siebenga, she had a basic understanding of accounting and deferred to Siebenga, who was her senior. She remembers “ just trying to keep above water” with a busy practice and acknowledged she turned a blind eye to what was occurring.
In making its decision, the Discipline Committee considered a letter to the Chair of the Discipline Committee in which King admitted the disciplinary violation and gave her undertaking not to practise law, her prior professional conduct record, and her former member status.
King agreed to undertake for 10 years, commencing on April 23, 2020:
Should King wish to apply for reinstatement to the Law Society when her undertaking expires in 2030, she will have to satisfy the Law Society’ s Credentials Committee that she is of sufficiently good character and repute to practise law in BC.
Rule 4-29 Admission of Misconduct and Undertaking to Discipline Committee