B.C. lawyer suspended 2 months after helping client transfer US$6.4M against bank's wishes

A Vancouver lawyer has been suspended for two months after admitting misconduct involving his trust accounts to the Law Society of B.C.

The law society alleged in a citation that Justin G. Kates permitted nearly $9.5 million to be paid into and withdrawn from his firm's trust accounts without providing legal services directly related to the transactions, and without making reasonable inquiries about them or keeping a record of any inquiries that were made.

The society also alleged that Kates helped facilitate his client's circumvention of a bank's refusal to permit a US$6.4-million transfer to the United States.

In an agreed statement of facts, Kates made "substantial admissions" about his conduct and agreed to a two-month suspension, according to a news release issued Thursday by the law society.

Though the law society's hearing panel has not issued its written reasons for accepting the joint submission Kates and investigators made on discipline in the case, the news release indicates that the panel "determined that discipline violations had been made out in relation to all allegations of the citation."

The citation describes Kates' misconduct as stemming from his work with a client identified in the document as "C Inc., later known as B Inc."

The unidentified company made its roughly $9.5 million in deposits and withdrawals to Kates' trust funds between Aug. 9 and Sept. 27, 2019, according to the citation.

Between Aug. 9 and Aug. 13 of that year, the citation alleged, Kates helped the company change its name from C Inc. to B Inc. after the Bank of Montreal refused to permit the transfer of US$6.4 million to the United States from C Inc.'s account.

The citation alleged that Kates did not advise BMO of the company's name change, and allowed the company to transfer the funds through his firm's trust account, rather than through the BMO account.

Kates also provided responses to a law society auditor that he ought to have known could be misleading or incomplete, according to the citation.

The society's hearing panel accepted the joint submission on discipline and ordered Kates' two-month suspension to commence on Friday.