Complaints, Lawyer Discipline and Public Hearings

Summary of Decision on Disciplinary Action

Hong Guo

Richmond, BC

Called to the bar: May 4, 2009

Hearing dates: May 12 and 13, 2021

Written submissions: June 1, 2021

Panel: Jennifer Chow, QC (chair), Ralston Alexander, QC and John Lane

Decision issued: October 26, 2021 (2021 LSBC 43)

Counsel: Alison L. Kirby for the Law Society; Gerald A. Cutler, QC and Lucy X. Zhao for Hong Guo

BACKGROUND

A hearing panel determined that Hong Guo committed professional misconduct by failing to supervise her employees, failing to comply with trust accounting rules, and leaving a series of blank signed trust cheques with her bookkeeper that facilitated the bookkeeper’s theft of $7.5 million of client trust funds. The panel also found Guo misappropriated trust funds from some clients in order to replace funds missing from other clients’ trust accounts that were needed to complete real estate transactions (2020 LSBC 52).

DISCIPLINARY ACTION

The Law Society took the position that Guo’s steps to “borrow” trust funds from her clients to cover her losses do not justify her misappropriations and emphasized that she disregarded an undertaking she made to the Law Society and an order from Benchers. The Law Society submitted that Guo should be disbarred.

Guo submitted that she was dealing with a theft of unprecedented magnitude and her actions were focused on protecting her clients. She also deposited $2.6 million of her own money to ameliorate some of the short-term consequences of the theft.

The panel considered the seriousness of Guo’s misconduct that allowed the theft to take place, the volume of work being performed by unsupervised staff at Guo’s firm and the panel’s finding that, if Guo had followed trust accounting rules, she would have discovered the fraudulently inflated trust account balance two months prior to the theft. The panel found that Guo’s explanation that she was overwhelmed by the circumstances did not excuse her failure to comply with her undertaking or the order.

The panel accepted that Guo had experienced exceptional circumstances that mitigate her misconduct and that she believed that, by manipulating her trust funds, she could minimize the impact of the theft on her clients. The panel considered that most clients were eventually made whole. The panel found that disbarment was not required and reviewed other disciplinary cases involving findings of misappropriation, lack of supervision over clients’ trust accounts and breaches of undertaking that did not result in disbarment.

The panel ordered that Guo:

  1. be suspended for one year; and
  2. pay costs of $47,329.44.

 

2021 LSBC 43 Decision on Disciplinary Action