VANCOUVER — British Columbia lawyers have dug into their own pockets to compensate victims of a complex real estate scheme that a B.C. Supreme Court judge says has shamed the entire legal profession.
Former Vancouver lawyer Martin Wirick, 54, was sentenced Tuesday to seven years in prison for one of the largest legal frauds in Canadian history.
He pleaded guilty to two counts each of fraud and forgery in connection with more than 100 transactions that left property owners, organizations and financial institutions on the hook for millions of dollars.
According to court documents, the total value of the fraud is estimated to be $40 million. Wirick, who has since been disbarred, was ordered to pay $2 million in restitution.
“You have brought shame upon your former profession,” Judge Patrick Dohm told Wirick as he handed down the sentence.
“You breached the trust placed in you by your former profession and you breached the trust placed in you by the persons who retained you to do what they were unable to.”
Wirick said nothing as he was sentenced.
Details of his crimes are contained in an agreed statement of facts presented in court.
The documents say he and a co-accused spent nearly three years selling and refinancing properties without using the money from those transactions to pay off existing mortgages, leaving victims with debt they believed had already been paid off.
When Wirick confessed in a letter to the Law Society of B.C. in 2002, the group launched its own investigation, took over Wirick’s practice and dipped into a special lawyer-financed fund designed to help victims of legal fraud.
So far, nearly $40 million has been paid out to victims who’ve made claims to the society, including cases that aren’t included in Wirick’s guilty plea. Some of the victims were facing foreclosures on their homes.
“We recognized as soon as the Wirick matter come to our attention that we had to restore public confidence,” Gordon Turriff, president of the law society, said in an interview Tuesday.
“And the only sure way of doing that was to make these people whole again, and we did it.”
The fund, which is similar to other programs in jurisdictions across North America, is mandated by the provincial government and administered by the law society.
With just $7 million in the fund and only $15 million from insurance, Turriff said it fell to B.C.’s 10,000 lawyers to pick up the rest.
The lawyers’ annual fees for the fund jumped from about $250 to $600 in 2003, and have remained higher than normal for the past six years. The society also removed a yearly cap on payouts specifically for this case.
“It was the right thing to do, and as a result some people who were put through a lot of anxiety by Mr. Wirick were recompensed as much as we could,” said Turriff.
The law society also introduced new rules designed to prevent such fraud from happening again, specifically requiring stricter reporting of trust accounts and mortgage discharges.
Wirick, who has since filed for bankruptcy, claims he never benefited financially and that most of the money went to his co-accused, Tarsem Singh Gill.
Gill hasn’t yet entered a plea, but has elected for a jury trial in B.C. Supreme Court. He’s scheduled for a preliminary hearing in March of next year.