Citation issued: November 13, 2012

douglas warren welder 

Citations are issued by the Law Society of BC's Discipline Committee and list allegations against a lawyer which will be considered at a discipline hearing. Please note that allegations in a citation are unproven until a discipline hearing panel has determined their validity.

Nature of conduct to be inquired into:

1. In or about November 2006, you received funds into your trust account from a number of persons and disbursed them by wire transfer to U.S. bank accounts controlled by International Fiduciary Corporation, S.A. (“IFC”) contrary to a Temporary Order and Notice of Hearing dated November 1, 2006 (the “Cease Trade Order”), when you knew that the BC Securities Commission had commenced proceedings alleging that the investment scheme operated through IFC was fraudulent and had issued the Cease Trade Order. The particulars of the funds received and disbursed (in US Dollars) are:

a) On November 20, 2006, you received $200,075 from or on behalf of SS and AS, $200,071.12 of which you disbursed on November 27, 2006 by sending $200,000 by wire transfer to bank account number [number] and paying a wire transfer fee of $71.12.

b) On November 21, 2006, you received $120,090 from or on behalf of RF, $120,071.24 of which you disbursed on November 28, 2006 by sending $120,000 by wire transfer to bank account number [number] and paying a wire transfer fee of $71.24.

c) On November 21, 2006, you received $100,100 from or on behalf of RJ, $100,071.24 of which you disbursed on November 28, 2006 by sending $100,000 by wire transfer to bank account number [number] and paying a wire transfer fee of $71.24.

d) On November 23, 2006, you received $600,100 from or on behalf of BK, $600,071.24 of which you disbursed on November 28, 2006 by sending $600,000 by wire transfer to bank account number [number] and paying a wire transfer fee of $71.24.

e) On November 21, 2006 and November 24, 2006, you received funds totaling $229,970 from the following persons purportedly as shareholders or subscribers of a company called K Corporation and you disbursed those funds on the company’s behalf on November 28, 2006 by sending $100,000 by wire transfer to bank account number [number], sending $129,898.76 by wire transfer to bank account number [number] and paying a wire transfer fee of $71.24:

i) $100,000 received on November 21, 2006 from JB and MB ,

ii) $59,990 received on November 24, 2006 from ML and SL,

iii) $39,990 received on November 24, 2006 on behalf of DA, and

iv) $29,990 received on November 24, 2006 from BS and LS.

f) On November 22, 2006, you received $299,990 on behalf of M Corp. which you disbursed on November 28, 2006 by sending $299,918.76 by wire transfer to bank account number [number] and paying a wire transfer fee of $71.24.

g) On November 28, 2006, you received $103,100 from HS and CS, $100,071.24 of which you disbursed on the same day by sending $100,000 by wire transfer to bank account number [number] and paying a wire transfer fee of $71.24.

This conduct constitutes professional misconduct, pursuant to section 38(4) of the Legal Profession Act.

2. On November 21, 2006, you received into your trust account $100,100 USD from or on behalf of RI when you knew or ought to have known that the funds were intended for investment in IFC contrary to the Cease Trade Order and you

a) did not return these funds to RI but held them in your trust account until March 12, 2007, when you disbursed them by wire transfer to another lawyer, and

b) did not account in writing to RI for the funds received, contrary to Rule 3-48(1).

This conduct constitutes professional misconduct or breach of the Act or rules, pursuant to section 38(4) of the Legal Profession Act.

3. On December 1, 2006, you received into your trust account $173,783.45 USD from C Ventures when you knew or ought to have known that the funds were intended for investment in IFC contrary to the Cease Trade Order. You did not return these funds to C Ventures but held them in your trust account and then disbursed the funds (except $1.00 USD) without authorization from C Ventures:

a) On January 31, 2007, you disbursed $12,543.18 by sending $12,500 by wire transfer to an account controlled by [number] Canada Inc. and paying a wire transfer fee of $43.18.

b) On January 31, 2007, you disbursed $50,068.78 by sending $50,000 by wire transfer to an account controlled by [number] Alberta Ltd. and paying a wire transfer fee of $68.78.

c) On February 1, 2007, you disbursed $100,068.54 by sending $100,000 by wire transfer to an account controlled by K Inc. and paying a wire transfer fee of $68.54.

d) On March 12, 2007, you disbursed $838.28 by issuing a trust cheque payable to yourself in partial payment of a statement of account rendered to K Capital Corporation.

e) On March 12, 2007, you transferred $10,263.67 to the credit of another client, S Inc. and then, on the same day, disbursed the funds by sending them by wire transfer to an account controlled by [number]  Alberta Ltd.

This conduct constitutes professional misconduct, or is contrary to Rule 3-56 and constitutes a breach of the Act or rules, pursuant to section 38(4) of the Legal Profession Act.

4. Further, or in the alternative to paragraph 1, in November 2006, in the course of acting for IFC, you received funds into your trust account from the following persons and then disbursed them to U.S. bank accounts controlled by IFC without advising some or all of these persons that you were not protecting their interests, contrary to Chapter 4, Rule 1 of the Professional Conduct Handbook:

a) SS and AS, from whom or on whose behalf you received $200,075 on November 20, 2006, $200,071.12 of which you disbursed on November 27, 2006.

b) RF, from whom or on whose behalf you received $120,090 on November 21, 2006, $120,071.24 of which you disbursed on November 28, 2006.

c) RJ, from whom or on whose behalf you received $100,100 on November 21, 2006, $100,071.24 of which you disbursed on November 28, 2006.

d) BK, from whom or on whose behalf you received $600,100 on November 23, 2006, $600,071.24 of which you disbursed on November 28, 2006.

e) the following persons from whom or on whose behalf you received funds purportedly as shareholders or subscribers of a company called K Capital Corporation, which funds you disbursed on November 28, 2006:

i) JB and MB, from whom you received $100,000 on November 21, 2006,

ii) ML and SL, from whom you received $59,990 on November 24, 2006,

iii) DA, from whom or on whose behalf you received $39,990 on November 24, 2006, and

iv) BS and LS, from whom you received $29,990 on November 24, 2006.

f) M Corp., from whom or on whose behalf you received $299,990 on November 22, 2006 and disbursed on November 28, 2006.

g) HS and CS, from whom you received $103,100 on November 28, 2006, $100,071.24 of which you disbursed on November 28, 2006.

This conduct constitutes professional misconduct, pursuant to section 38(4) of the Legal Profession Act