Court finds disbarred immigration lawyer liable for $2.4M

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This article was published 14/02/2023 (938 days ago), so information in it may no longer be current.

A disbarred Winnipeg immigration lawyer has been found liable for more than $2.4 million the Law Society of Manitoba paid to clients he swindled.

Paul Hesse, a former president of the provincial Liberal party, was disbarred in October 2020, after a law society disciplinary panel found he had defrauded 27 clients out of $6.5 million over the course of three years, beginning in 2016.

The law society filed a lawsuit against Hesse in 2021, seeking to recover $2.4 million it had paid out to cover the losses of 15 of Hesse’s clients.

The law society repaid the money from a reimbursement fund it maintains to compensate clients who have suffered “misappropriation or conversion” of their money by a law society member.

Hesse did not defend himself against the lawsuit and was not present in court Tuesday, when King’s Bench Associate Chief Justice Shane Perlmutter ordered a default judgment against him in the full amount sought by the law society, plus an additional $250,000 in punitive damages.

“Hesse stole trust property from his clients and in doing so breached a fundamental tenet of the solicitor-client relationship — the trust between a lawyer and a client,” Perlmutter said.

The law society found Hesse guilty of 29 counts of professional misconduct following a disciplinary hearing in 2020, resulting in his disbarment.

A disciplinary panel found Hesse convinced clients to invest in a business owned by his then-romantic partner without disclosing their personal relationship and put other clients’ money into sham investments.

Hesse outright stole $3.5 million from clients and obtained another $3 million by deceiving them, the law society found. He lied and told them their immigration status depended on the investments, in some cases.

The law society made the decision after a September 2020 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 King’s Bench rules.

Perlmutter said Tuesday the evidence against Hesse, a one-time partner at Pitblado Law, was “overwhelming.”

“He enriched himself and his common-law partner at the expense of vulnerable individuals wishing to immigrate to Canada or in the process of doing so,” Perlmutter said. “His conduct clearly warrants sanction by this court.”

dean.pritchard@freepress.mb.ca