Complaints, Lawyer Discipline and Public Hearings

Summary of Rule 3-7.1 Consent Agreement

Paul Christopher Doroshenko, QC

Vancouver

Called to the bar: May 19, 2000

Consent agreement accepted: April 28, 2021

FACTS

Paul C. Doroshenko, QC practises law through his law firm and is the responsible lawyer for the firm’ s pooled trust account. He hired an accountant to prepare the firm’ s trust accounting records. When there were problems with the accounting, the accountant would contact the firm’ s legal assistant, who then corrected it. Doroshenko did not have a formal schedule in place to meet with the accountant to discuss the trust reconciliations.

He became concerned about his firm’ s trust accounting and hired another accountant to audit the firm’ s accounting practices. The new accountant informed him she found irregularities in the trust accounting records. Soon after, the legal assistant resigned unexpectedly and the new accountant trained another assistant in bookkeeping. Together, they identified a number of errors the previous assistant had made and incidents of missing cash. The new accountant informed Doroshenko that she believed the previous accountant had not been reconciling the firm’ s trust account properly.

Doroshenko asked the new accountant to complete the trust reconciliations using the firm’ s accounting software. He asked his former accountant for an explanation, and he replied that he had performed the reconciliations on his own system. He also advised that he was suffering from significant personal health problems. Doroshenko ceased to retain him as an accountant.

At the time, Doreshenko was suffering from a concussion, and significant injuries related to a slip and fall accident.He was also preoccupied with a number of personnel issues. To work through the personnel issues, he began to regularly use the firm’ s accounting software and gained a clearer understanding of the extent of the bookkeeping issues. He then hired an accountant to conduct an in-house refresher course for staff about trust accounting principles and obligations.

In 2018, the Law Society conducted a compliance audit of the firm. Before the audit, Doroshenko found out that his previous accountant used a large deposit to cover trust shortages in the firm’ s accounting records without his knowledge. The deposit should have gone to the firm’ s general account. During the audit, he also learned that staff had written false receipts for cash payments for friends and deposits had not been posted to client files. The Law Society auditor noted a large number of trust shortages had not been corrected in a timely manner, and referred the matter to the Professional Conduct department.

The Law Society’ s forensic accountant reviewed the firm’ s financial records and released an investigative memo identifying 82 trust shortages totalling $44,353.19 where Doroshenko authorized the withdrawal of funds from trust when there were insufficient funds held to the client’ s credit, comingling of the lawyer’ s funds with trust funds, trust reconciliations that were likely not prepared on time, trust cheques made payable to other lawyers and employees to pay for reimbursements of disbursements on client matters and a general failure to maintain trust accounting records. The trust shortages occurred due to a number of reasons, including data entry errors made by staff, electronic retainers not properly processed by staff, trust funds deposited for amounts less than recorded on cash receipts, trust funds not deposited and client retainer cheques returned NSF after trust funds had already been withdrawn.

Doroshenko acknowledged he is personally responsible to ensure the accounting records are up to date and properly kept. He explained he relied on his accountant and staff, and due to his health issues, he failed to adequately supervise and verify that the accounting records were up to date and properly kept. The firm was solvent and in a responsible financial position and he did not intend to misuse trust funds for his or the firm’ s benefit. After he received the results of the compliance audit, he and his staff took a number of specific steps to address the accounting issues. He reimbursed the missing trust funds and no clients were harmed by his misconduct.

CONSENT AGREEMENT

Doroshenko admitted he committed professional misconduct by misappropriating or improperly withdrawing $44,353.19 in client trust funds; failing to identify a trust shortage, pay funds into the account to immediately eliminate the trust shortage, and report the trust shortage to the Law Society; failing to maintain sufficient funds on deposit to meet his obligations; failing to deposit trust funds totaling $25,095.93 to trust as soon as practicable; maintaining more than $300 of his own funds in trust; failing to maintain accounting records in compliance with the Law Society Rules; failing to adequately supervise his staff; and making false representations to the Law Society in his annual trust report.

Doroshenko agreed to be suspended from the practice of law for two months and provided an undertaking that he will complete five hours of continuing professional development credits related to trust accounting. In accepting the consent agreement, the Chair of the Discipline Committee considered the facts and that Doroshenko did not have a prior professional conduct record.

Rule 3-7.1 Consent Agreement