A pair of Toronto lawyers accused of embezzling nearly $7 million from real estate clients has been found in contempt of court for failing to hand over financial records and answer questions about where the money went.
Singa Bui and her husband Nicholas Cartel face penalties that could include fines or even imprisonment, and will likely also draw misconduct charges from Ontario’s professional regulatory body for lawyers, two experts in professional legal discipline said.
“Although they must know what happened to the funds, they have refused to provide this information,” Ontario Superior Court Justice William Chalmers ruled in late August.
“Instead of attempting to comply with the orders to the best of their ability, I find that the defendants have taken active steps to hide their finances and to frustrate the court’s efforts to determine what happened.”
It’s the latest development in a case that has underscored how anyone buying or selling a home — typically the most expensive transaction of one’s life — can be vulnerable to fraud by the very lawyers who are required by law in some provinces to handle the transaction, with scant guarantee of any protection from the legal profession itself.
In a phone call last week, Cartel told CBC News he thinks the judge’s decision is mistaken and he intends to challenge it.
“He ignored the facts,” Cartel said. “I’ve delivered all documents in my possession, delivered thousands of pages of real estate files… I will be bringing a motion to either address this, to have it set aside or varied in some regard.”
Trust account deficits
Bui and Cartel were the only partners at the now-defunct firm Cartel & Bui LLP, based in a smartly decorated loft space in Toronto’s Liberty Village neighbourhood.
Bui mostly handled home sales, while Cartel dealt with class actions and litigation.
At some point by 2022, cash started to go missing from the firm’s trust account, a forensic audit filed in court shows.
Lawyers’ trust accounts are tightly regulated by provincial law societies because the money in them doesn’t belong to the firm but to its clients.
The court-ordered forensic audit of that account found “possible inappropriate” payments such as $2,190 a month for child care and more than a million dollars in transfers to American Express cards, which were used for purchases at Christian Dior and Hermes, among other things.
Initially, the shortfalls were covered by new money coming in, but starting in February 2023, payouts to clients of their proceeds from real estate deals began to stall.
Cartel took out a $1.2 million mortgage on his and Bui’s family home. While he later testified under oath that the loan was to pay for repairs after “massive pipes blew up spewing a street’s worth of sewage into…
Read More: Lawyer couple found in contempt of court amid evidence they stole millions
