B.C.’s law profession regulator has suspended Vancouver lawyer Milan Matt Uzelac for four months for professional misconduct involving up to $1.167 million.
The decision, released Dec. 15, said a trust account used by Uzelac was used to facilitate alleged fraud involving a child’s chemotherapy treatment.
The alleged fraud began when mother PW confided to AN, an acquaintance, that her disabled son’s medical condition had deteriorated and that he had started experimental chemotherapy. AN said he could help get a doctor’s referral for the child. During those discussions, a fraud scheme began.
Uzelac admitted that AN’s explanation about bank drafts received in 2017 explained as settlement funds from AN’s employment with Corporate House should have been a red flag.
“Corporate House was the Canadian representative of the Panamanian law firm Mossack Fonseca, which was at the centre of the Panama Papers scandal that became public in the summer of 2016,” the decision said.
That scandal was an unprecedented leak of 11.5 million files from the database of the world’s fourth largest offshore law firm, detailing ways the wealthy might exploit secretive offshore tax regimes.
The decision said Uzelac admitted that between 2017 and 2018 he received and disbursed the funds through his trust account on behalf of AN without making reasonable inquiries about the circumstances and without providing substantial legal services in relation to those funds.
“As a result, AN was able to use [Uzelac’s] trust account to dupe PW into investing funds in a fraudulent investment scheme,” the decision said.
Vancouver police contacted the society in July 2018 after PW reported depositing funds into the trust account as part of an investment scheme.
Police said PW was approached by AN about an investment scheme whereby the Royal Bank in Barbados (RBC) was offering 8% interest for funds deposited.
PW was asked to provide funds in the form of bank drafts made payable to Uzelac in trust. She understood funds were to be deposited into the trust account and then transferred to RBC.
On AN’s instructions, PW provided AN with bank drafts totalling more than one million dollars to be deposited to the account. However, PW subsequently learned from RBC the purported investment scheme was fraudulent.
Uzelac thought that the bank drafts he received came from AN’s bank account. However, AN frequently asked for cheques to be made payable to himself when confirming the arrival of a new deposit.
AN also convinced PW to form a company with AN and herself as directors, the company to be used as a vehicle for PW to attract other investors and invest their money in the scheme.
AN incorporated the company and named it V Ltd. with the mailing and delivery address being the business address of AN’s father.
Then, PW opened an RBC account for V Ltd., not knowing she was the only company director.
“AN told PW that RBC was so impressed with their business plan that they were willing to give them $5,000 in ‘seed money,’” the decision said. “PW thought this was strange, but AN gave her a trust cheque made payable to V Ltd. dated June 28, 2018, for $5,000.”
That trust cheque was from the Uzelac’s trust account.
PW demanded her money back directly from RBC but soon found out emails purportedly from RBC were fake. They had been sent to her from email accounts controlled by AN.
Then as a purported gesture of goodwill, AN gave PW a second cheque written on Uzelac’s trust account for $200,000.
The situation began to turn when, in July 2018, PW told her accountant about her investments with AN.
“The accountant became suspicious,” the decision said. “The accountant had her staff contact RBC. RBC confirmed that no portfolio was being held for PW.”
PW had a friend investigate the IP addresses used by and RBC in their emails to her, learning the emails were coming from AN and his wife’s IP address and that the physical location was in Vancouver.
She filed suit against AN and called police.
In October 2018, PW, AN and AN’s wife settled the civil suit. The settlement included a term that the defendants would direct any funds held in trust by Uzelac to be paid to PW’s lawyer.
In November 2018, Uzelac paid $153,269.21 to PW’s lawyer from funds held in trust for AN.
Also that month, AN and his wife consented to judgment being entered with PW owed $946,857.
However, AN and his wife repeatedly resisted efforts to aid in execution of that judgment, leading to AN and wife both being fined $10,000 and being jailed 14 days for contempt of court, although the wife’s sentence was suspended.
The society said Uzelac was called to the bar in 1981 and has a general practice, including corporate/commercial, family, criminal, residential real estate, administrative, civil litigation, commercial lending transactions, motor vehicle and wills and estates law.
The suspension begins Jan. 1.
@jhainswo
