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This article was published 12/8/2019 (231 days ago), so information in it may no longer be current.
A suspended Winnipeg lawyer at the centre of an investigation into suspect immigration activities is being sued by a Chinese couple who say he convinced them to invest or loan him $200,000 while he was acting as their immigration lawyer.
Paul Hesse, a former Manitoba Liberal Party president, was terminated as a partner at Pitblado Law in early June, after the Winnipeg firm said it discovered evidence Hesse had advised clients to invest in businesses owned by his now-ex-romantic partner, Patrick Maxwell.
In a statement of claim filed Aug. 8, Xiaomei and Xuefeng Zhang allege Hesse, over the course of two years, "induced and advised" the couple to "lend him money on a number of separate occasions."
The statement of claim identifies the couple as business people living in Winnipeg.
"At all material times (the Zhangs) were seeking assistance in maintaining their legal immigration status and were relying upon Hesse and Pitblado to appropriately service them in that regard," the lawsuit says.
According to the lawsuit, Xiaomei Zhang first retained Pitblado in December 2014 to assist her in obtaining a refund on a $75,000 deposit she had paid the province in support of her permanent resident application. In March 2017, Xuefeng retained the law firm to assist him in renewing his permanent resident card.
In April 2017, Hesse asked Xiaomei Zhang if he would be interested in investing in some property he had purchased that "required capital for renovations." Days later, Zhang provided a loan of $100,000 to Hesse’s holding company for a term of one year at an annual interest rate of 20 per cent. A second $100,000 loan was provided in two installments the following December and January, with the second installment paid directly to Hesse.
Over the next year, the Zhangs provided Hesse with short-term loans totalling $162,000, all but $5,000 of which were repaid, says the lawsuit.
To date, the principals of the two $100,000 loans have not been repaid, with no interest being paid on the loans since May 6, the documents say.
Hesse, the lawsuit alleges, told the couple the loans or investments were "safe and profitable" and "in their best interest."
Pitblado Law is named as a co-defendant in the lawsuit.
"Pitblado held Hesse out to be a trusted legal advisor and expert in immigration law and thereby induced and encouraged the plaintiffs to rely upon Hesse in relation to the facts and transactions referred to in this action," the lawsuit alleges.
Lawyers for the Zhangs are set to be in court Wednesday, seeking a garnishment order in the amount of $216,666.
None of the allegations have been proven in court.
The Law Society of Manitoba suspended Hesse’s licence last month. The suspension will remain in place pending the outcome of a law society investigation into Hesse’s activities and any disciplinary proceedings that may follow.
Since Hesse’s suspension, dozens of former staff at Maxwell’s businesses, including now-shuttered Osborne Village groomer and daycare White Lotus Pet Spa, have come forward to allege years of harassment and psychological abuse from Maxwell and voice concerns over business practices linked to foreign investors.
Sources told the Free Press that Maxwell and Hesse sometimes enlisted White Lotus staff to create websites and sign articles of incorporation for what several ex-staff members characterized as "fake businesses" that would later be sold to foreign investors.
Someone once said a journalist is just a reporter in a good suit. Dean Pritchard doesn’t own a good suit. But he knows a good lawsuit.