A Vancouver-area real estate and immigration lawyer who is running for mayor of Richmond, B.C., has been accused of professional misconduct by the province’s law society after the disappearance of millions of dollars from the law firm’s trust account.
In April, 2016, Richmond lawyer Hong Guo reported to the law society that $7.5-million she was holding in trust for clients was missing. She insisted the clients' money was stolen by two of her employees who then fled to China.
The Law Society of British Columbia started an investigation into the incident. But last month, the society notified Ms. Guo that she would be the subject of a disciplinary hearing on 30 allegations, including that she failed to maintain accounting records according to the law society’s rules, failed to properly supervise her employee, or improperly delegated her trust accounting responsibilities to him, and misappropriated or improperly withdrew client trust funds from her bank trust account.
David Jordan, communications officer for the law society, confirmed that the shortage in the trust account in question has been eliminated, in part by insurance and in part by Ms. Guo.
But Ms. Guo, who officially joined Richmond’s mayoral race on Sept. 13, said she is innocent and she is not afraid of the issue affecting her as a mayoral candidate.
“I risked my life and worked with Chinese police and put the two criminals in jail. It is protocol for Law Society, their job. I will talk to them and present [my side of the facts]. I am very confident that I will be exonerated,” she said in an interview at the end of September.
She once told The Globe and Mail that she is the top lawyer in the Chinese community with $600-million a year in transactions.
“If I had anything to hide, I wouldn’t have chosen to run in the election. I believe that people will find that I am an honest and transparent person.”
None of the allegations have been proven and a date for a discipline hearing has not yet been scheduled.
Mr. Jordan said the hearing will not take place before the Oct. 20 election. He added the date between a citation and a hearing can often be a year or longer and this case is particularly complex.
He noted if the society’s allegations are proven valid, the discipline Ms. Guo may face could range “anywhere from a fine to suspension to disbarment.”
Ms. Guo has been involved in some other legal disputes including a recent case in which she was sued by two Chinese investors after a $40-million development deal in Richmond fell apart. Ms. Guo says the suit has no merit.
Qing Yan and his wife Kaiming Yu filed a statement of claim in the Supreme Court of B.C. in June, suing Ms. Guo, two other investors and three companies. According to the statement of claim, Mr. Yan and his wife joined a high-density mixed-use commercial and residential development project in the area of Richmond’s Minoru Boulevard in 2013. To develop the land, the plaintiffs say they and their fellow investors formed a company called Vancouver Soho, where the plaintiffs owned 40 per cent of the shares.
After receiving $20-million in financing from a financial institution, Mr. Yan and his wife say they invested $12-million into the development. Mr. Yan said in an interview in July that the project made little progress over two years, so he and his wife decided to sell their shares.
He said Ms. Guo then located a third-party purchaser, a numbered company that was willing to purchase his shares for $14-million. The statement of claim alleges that the plaintiffs were entitled to reclaim their shares if the purchaser failed to pay.
However, Mr. Yan said he only received about $1-million and their shares were transferred by Ms. Guo to the numbered company. Mr. Yan and Ms. Yu’s lawyer, Glen Forrester, said his clients allege that they have suffered damages as a result of Ms. Guo’s negligence and breach of fiduciary duty.
“Among other things, Ms. Guo is alleged to have acted for a number of parties at once, all of whom had divergent or even conflicting interests, without advising them in a timely manner to seek independent representation. That is not in accordance with accepted standards of legal practice in British Columbia,” Mr. Forrester said in an e-mail.
None of the allegations have been proven in court and a hearing in the case is scheduled for the end of October.
Ms. Guo called the allegations “slander” in an interview in August, where she denied she was retained as counsel for either party.
“I am just a lawyer who helped them buy that piece of land. I just did a title transfer for them,” she said. “The shareholders are fighting, and I have nothing to do with it.”
She said she is running for mayor to give back to society.
Sutton Realty agent Peter Schellenberg, who nominated Ms. Guo for her candidacy, said Ms. Guo is a friend and he would absolutely support her in the election and believes she is a very “caring and honest” person.
“She is a very, very smart woman, very organized. She is an I-get-that-job-done that sort of person,” he said in an interview. “She has the ability to make [the city] run more efficiently.”
Her platform includes seeking provincial and federal support to extend the SkyTrain, replacing the Massey Tunnel and increasing housing supply.
But after an all-candidates meeting last week, Ms. Guo once again sparked controversy. In remarks circulated on social media, Ms. Guo told journalist and blogger Bob Mackin there are no human-rights abuses in China.
Mr. Mackin reported that Ms. Guo said China has lots of freedom of speech and she is not aware that China has jailed journalists and mistreated some human-rights defenders.
“The Chinese media in China, they have very much freedom, to talk and to criticize and to make suggestions,” she told Mr. Mackin. “There is no human-rights abuse in China, okay?”
Multiple phone calls and e-mails from The Globe to Ms. Guo for her comments on this matter were not returned.