Immigration lawyer, former Liberal party president Hesse disbarred after $6.5-M fraud

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This article was published 06/10/2020 (1799 days ago), so information in it may no longer be current.

A Winnipeg immigration lawyer has been disbarred after he defrauded his clients out of $6.5 million and dashed their dreams of immigrating to Canada.

Paul Hesse was disbarred Monday and is no longer allowed to practise law in Manitoba after he was found guilty of 29 counts of professional misconduct for stealing from 27 different clients over the course of three years.

He convinced some to invest in a business owned by his then-romantic partner without disclosing the personal relationship, and put other clients’ money into sham investments, the Law Society of Manitoba found. Overall, Hesse outright stole $3.5 million from clients and obtained another $3 million by deceiving them. He lied and told them their immigration status depended on the investments, in some cases.

The law society made the decision after a Sept. 16 hearing Hesse did not attend. The disciplinary committee found him guilty in absentia because he was personally served with a 129-page document that laid out all of the allegations against him, and he didn’t respond. Anyone who doesn’t respond to such a notice within 20 days is considered to have admitted all of the allegations contained in it, according to Manitoba’s Court of Queen’s Bench rules.

“The evidence is overwhelming and shows a deliberate, multi-year scheme to steal from and defraud 27 different clients for the member’s own benefit and for the benefit of his close personal associate,” dating back to 2016, the law society’s decision states.

Most of those 27 clients had their immigration plans ruined by Hesse’s fraud and deceit, the disciplinary panel found. The Law Society has ordered him to pay $40,000 in costs from the disciplinary investigation.

Most of Hesse’s clients were from China and were particularly vulnerable because they didn’t speak English. Several of them are now suing him. Haokuang Tan launched a proposed class-action lawsuit against Hesse in August, alleging he stole $350,000 from Tan by telling him he was required to make an investment as part of his immigration application. Unbeknownst to Tan at the time, the numbered company he invested in was owned by Hesse and his former romantic partner, Patrick Maxwell. Those allegations haven’t been proven in court.

The Free Press first reported last year that Hesse, a partner at Pitblado Law at the time of his misconduct, was stripped of that title in June 2019 after the firm found out Hesse was encouraging clients to invest in businesses associated with Maxwell.

Maxwell was the owner of White Lotus Pet Spa in Osborne Village, which closed three weeks after Hesse was removed as a partner at Pitblado. Maxwell was also associated with a number of other businesses run out of the same Scott Street office, including a real estate firm.

Pitblado managing partner Benjamin Hecht released a statement following the disciplinary panel decision.

“In June 2019, our firm’s management was appalled to discover a pattern of irregular activity by Mr. Paul Hesse that did not live up to the standards we set for ourselves, or that our clients expect and deserve. We immediately removed Mr. Hesse from the firm and have fully cooperated with the Law Society of Manitoba in its investigation of the matter,” Hecht wrote.

“As we continue working to serve our clients with the highest standards of integrity, professionalism and compassion, we hope the Law Society’s decision is seen as an important step towards holding Mr. Hesse accountable.”

Kris Dangerfield, CEO of the Law Society, said Hesse’s misconduct was “absolutely egregious and very disturbing.”

The Law Society began investigating Hesse after Pitblado reported his behaviour in June 2019. Dangerfield said the law society “stepped in quickly to ensure the conduct couldn’t continue,” suspending Hesse shortly thereafter.

His former clients have been notified that they can claim reimbursements through a fund set up by the society, paid for by other lawyers.

Hesse is believed to be living out of province, and Dangerfield confirmed he was not in Manitoba when he was most recently served with the law society’s evidence against him. As to whether the law society has any hope of being repaid by Hesse — including the $40,000 he now owes and any costs incurred via the reimbursement fund — Dangerfield said that “remains to be seen.”

Hesse was a former president of the Manitoba Liberal party. He stepped down in 2016.

He did not respond to a Free Press request for comment Tuesday.

— Staff