A lawyer who allegedly facilitated a couple of investment fraud schemes involving fake GICs has been sanctioned by the Law Society of Ontario, which ordered him to pay over $3.5 million in restitution to former clients, and revoked his licence to practice law.
Following a hearing, the Law Society Tribunal sanctioned Patrick Glemaud, who didn’t participate in the hearing. Given the lack of defence, the tribunal accepted the Law Society’s evidence and concluded that Glemaud engaged in professional misconduct — including misappropriating client money that was being held in trust for crypto transactions, and for using his trust account to facilitate fraudulent investment schemes.
According to the tribunal’s decision, in 2022, after searching various financial firms’ platforms online looking for GICs, an investor received a call from a man apparently posing as an advisor with Manulife, which led to the investor agreeing to deposit $2.7 million into a one-year GIC.
At the direction of emails from the purported advisor, the investor wired $2.7 million to Glemaud’s trust account in late October 2022. But, in early November, she discovered that she’d apparently fallen victim to a fraudulent GIC scam, after seeing a warning about these types of scams on Manulife’s website.
The investor reported the apparent fraud to police and sued the lawyer and his firm, who denied liability. In his statement of defence, Glemaud said that he was acting on behalf of an unverified offshore client (Blackstone Dragon Inc.), who claimed to be working on a transaction with the victim, and directed Glemaud to convert the $2.7-million deposit into cryptocurrency (Ethereum) and deposit it into a crypto wallet controlled by Blackstone.
According to the Law Society, Glemaud didn’t independently verify the identity of the corporate client, or the source of the funds deposited into his trust account, and didn’t directly communicate with the client or the victim during the transaction.
Additionally, another investor, an 86-year old retiree, also fell victim to the same fake GIC scam in late 2022. In that case, he deposited $600,000 into Glemaud’s trust account, believing that he was buying a GIC from Manulife that paid 9%.
That investor apparently discovered that the GIC was fake after discussing the investment with his son-in-law, who was an investment advisor.
“His son-in-law advised that a 9% return is excessive when compared to market rates and contacted an acquaintance at Manulife to confirm the GIC product offered. The acquaintance advised that Manulife had no such offering,” it said.
That investor also ended up calling the police, but after an initial contact, the lawyer “did not respond to further inquiries from the police,” the tribunal said. After that, police were unable to locate Glemaud and his “current whereabouts are unknown,” the tribunal said.
“Based upon the Law Society’s evidence, which included material from the police investigation, neither GIC investment existed and both [investors] were the victims of fraud,” the tribunal said. It concluded that the lawyer was “at least reckless and/or wilfully blind to fraud.”
Additionally, the panel found that Glemaud misappropriated funds from several other clients that were deposited in trust for crypto transactions.
Based on its findings, the tribunal revoked Glemaud’s licence and ordered him to pay $3.3 million in restitution to the victims of the GIC fraud (including $600,000 to the estate of the elderly victim who died in early 2023), and another US$152,035 and $123,156 to the clients whose money was misappropriated from the trust account — plus 4% interest on these balances and costs of $14,381.52 to the Law Society.