A prominent Winnipeg lawyer and one-time rising political star has been stripped of his partnership at a city firm, amidst allegations he used his position to improperly solicit business investments from immigration clients.
Paul Hesse, a former Manitoba Liberal Party president, was removed as a partner at Pitblado Law on June 7.
When contacted by the Free Press for comment Friday, Hesse said there were "multiple inaccuracies" in the description given of the situation, but due to a prior commitment, he could not respond further at that time.
A spokesman for the downtown law firm says it discovered that over a period of several years, Hesse had presented some immigration clients — mostly individuals from China — with an opportunity to invest in a series of businesses linked to Hesse's now-former romantic partner, Patrick Maxwell.
The clients believed these investments would assist in their Canadian immigration applications.
Maxwell was the owner of White Lotus Pet Spa, a well-known Osborne Village pet groomer and dog daycare, which closed June 27. He was also associated with a number of other businesses run out of the same Scott Street office, including a real estate firm.
On Friday, the Law Society of Manitoba confirmed it has opened an investigation into Hesse's actions.
Pitblado's own investigation began in early June, when a firm accountant raised questions regarding some funds linked to Hesse's activity. Within days, the firm's executive committee convened a meeting with Hesse to address their concerns, after which he was immediately removed.
In an interview earlier this week, Pitblado managing partner Benjamin Hecht said in his 32-year legal career, he has never seen anything quite like the situation that unfolded.
"When we realized all this, it was heartbreaking, it was gut-wrenching," Hecht said. "It was shocking. It was a betrayal of our trust by a partner to the rest of us."
Hesse, who specialized in immigration law, would sometimes travel to China to meet with potential clients. During these trips, Hesse was allegedly referring some clients to make business investments in entities linked to Maxwell.
The firm is concerned these alleged referrals may have been in conflict with his role as its immigration lawyer.
"If he gave any investment advice, and don’t know what kind of advice he gave — I have to be clear that would be outside the scope of Pitblado Law, and outside the scope of the legal profession and the Law Society," Hecht said. "We don’t act as business advisers. We review legal matters."
The concerns about Hesse's conduct are only allegations, and there has not yet been any determination of misconduct.
Since removing Hesse from the firm, Pitblado has taken a number of steps to address the situation, Hecht said.
The firm seized Hesse's laptop and immediately notified the Law Society of Manitoba, with which it is co-operating in the investigation. It has retained an accounting and consultancy firm MNP LLP to review any potentially impacted files.
It has also reached out to all of the impacted clients it has identified, informing them Hesse is no longer with the firm and urging them to contact the Law Society.
Due to a conflict of interest, Pitblado can not represent those clients in their immigration cases, and is referring them to qualified immigration attorneys at other local firms.
Pitblado will fully co-operate in transferring impacted clients' files to new lawyers and answering any questions they may have, Hecht said. So far, it has sent letters to 20 individuals whose cases date to approximately 2017.
Any of Hesse's clients who have not yet heard from Pitblado are encouraged to contact Hecht directly with any questions or concerns, he said.
"We’re obviously profoundly and deeply sorry for the hardship that Paul’s actions caused to our clients," Hecht said. "We’re committed to doing what we can with their counsel, or with the Law Society, to try to protect their interests and their rights."
In addition, impacted clients may be eligible to file a claim with the Law Society of Manitoba, which maintains funds available to compensate clients for losses incurred as a result of a lawyer's conduct. Individuals with information about open investigations are also encouraged to contact the Law Society.
Law Society investigations are most often resolved within one year, although unusually complicated cases can take longer. At the end of an investigation, a committee will decide whether to bring misconduct charges against a lawyer.
Hesse joined Pitblado in August 2011, and became partner in January 2014.
He also served as a stint as Manitoba Liberal Party president, resigning in September 2016. He also ran as the party's candidate for Fort Rouge in the 2011 provincial election.
Updated on Friday, July 5, 2019 at 7:34 PM CDT: Fixes typo.