Vancouver lawyer disbarred for ignoring 'objectively suspicious' circumstances in real estate transactions

An elderly Vancouver lawyer has been disbarred by the Law Society of B.C. and ordered to pay more than $10,000 for misconduct during more than a dozen real estate transactions that could have facilitated money laundering.

A hearing panel of the Law Society Tribunal found that Lubomir Ihor Huculak "failed to make reasonable inquiries of his clients in the face of overwhelming, objectively suspicious circumstances," according to a news release issued by the law society Wednesday.

The statement notes that Huculak has appealed the decision, and his disbarment may be stayed as a result.

THE TRANSACTIONS

The 15 real estate transactions that ultimately led to Huculak's disbarment occurred between 2011 and 2015.

Many of them involved a client identified throughout the panel's August 2022 decision on facts in the case as "EA," who was referred to Huculak by another client identified as "MK." 

According to the decision, Huculak first met MK in 1999 while "working on some real estate transactions." In 2009, MK was indicted and pleaded guilty to conspiracy to traffic cocaine in the United States.

"In some publicly available and accessible media reports of MK’s 2009 criminal conviction, EA was identified as the leader of the 'EA Drug Trafficking Organization,'" the decision reads. "The same media reports alleged that the transnational drug trafficking organization was tied to money laundering and was based out of Vancouver."

MK referred EA to Huculak in 2007, according to the decision. The lawyer represented EA in an estate litigation involving a downtown Vancouver condo that was owned by EA's then-girlfriend, who had recently died of a drug overdose.

That litigation – which involved competing claims of ownership of the condo from EA and his deceased girlfriend's grandmother – lasted for four years, during which time the articles about MK's arrest and EA's alleged criminal organization were published.

The opposing lawyer in the case told the tribunal panel that she included the news articles in the file, but couldn't recall if she had asked EA about them during his examination for discovery.

Other allegations of criminality by EA did come to light during that case, in a context in which Huculak would have been aware of them, according to the decision.

"At trial, (the grandmother) gave sworn evidence in support of her belief that EA had killed her granddaughter in order to obtain a mortgage insurance payout on the Drake Street property," the decision reads. "The respondent (Huculak) was present for this evidence."

For these and other reasons – such as "changing employment information and addresses" for EA and other clients, and payments being made to EA and MK for transactions they were not part of – the tribunal panel concluded that the circumstances were "objectively suspicious" and Huculak had an obligation to make reasonable inquiries before acting.

THE PENALTIES

The tribunal panel also found that, in one of the transactions, Huculak failed to identify and verify his clients. He also misappropriated roughly $4,700 in trust funds and created a false invoice.

In considering what type of sanctions would be appropriate, the panel weighed submissions from the law society and from Huculak.

The lawyer argued that a one-month suspension of his right to practice and a restriction on his right to practice in real estate matters would be sufficient.

He told the panel he is in his 80s and practices law part time, and that the misconduct in question happened a long time ago.

He also provided positive character references and argued that his role as an honorary consul to Ukraine made it important that he remain able to practice as a lawyer in order to offer pro bono help to the Ukrainian community with legal and notary needs, according to the decision on sanctions, which was issued this week. 

Huculak further told the panel that the law society had not proven that he had "subjective knowledge of the objectively suspicious nature of the transactions," the decision reads.

For its part, the law society argued that disbarment was "the only sanction sufficient to protect the public interest" and serve as a deterrent to future misconduct, either by Huculak or other lawyers.

The society also argued that Huculak's misconduct must be seen in the context of "current knowledge of the extent and risks of money laundering in British Columbia," according to the sanctions decision.

"While there is no proof of actual fraud or money laundering, that is entitled to minimal weight in the panel’s analysis," the decision reads.

"While it would have been more aggravating if such proof was found, it is not necessary to the finding of professional misconduct that there be actual proof of fraud or money laundering. The panel found that the respondent’s conduct created a risk to the public to such a degree that his inaction amounted to professional misconduct. It is the creation of that repeated risk that is to be sanctioned."

The panel ordered that Huculak be disbarred. It also ordered him to pay $10,001.88 within one year, to partially cover the costs of the proceedings against him.