July 17, 2015 - 1:00 PM
KELOWNA – A Kelowna lawyer with a long history of professional misconduct has lost his licence to practice law for representing a company running a Ponzi scheme.
Douglas Warren Welder was disbarred from the Law Society of B.C. after a panel found he received and redistributed more than US$1.65 million while representing International Fiduciary Corporation, which was under investigation by the B.C. Securities Commission.
On Nov. 1, 2006 the commission issued a cease trading order, prohibiting investments but a Law Society judgement released July 13, 2015 says between that date and November 28, 2006, Welder received money from seven different individuals, families or corporations.
“(Welder) took these monies into his trust account and either transferred the monies to (the company) or another person or company in violation of the (cease trade order), or failed to return the monies to the investors and failed to account to the investors. Further, (Welder) did not advise these investors that he was not protecting their interests,” the judgement says.
Calling him “combative and unrestrained by professional norms,” the panel took the drastic steps to disbar Welder due to the nature of the misconduct and significant personal conduct record.
“In this case, the misconduct was serious. (Welder) knew about the (cease trade order) and should have known that transferring funds to (the company) was in violation of the order," the law society said.
Welder's history of misconduct dates back to 1991 when he failed to recognize a conflict in acting on both sides of a real estate deal. In 1994 he was found to have made unfounded allegations against another member of the Law Society. From 1991 until the present time, he has received six conduct reviews and six citations including in 1998 for conspiracy to defraud. He was fined $2,500 in 2001 and suspended for three months in 2005 for failing to collect and remit provincial sales taxes and GST.
During a Law Society investigation of his practice, Welder was also cited for failing to provide financial information as requested.
“He was not fully cooperative with Law Society staff during the field portion of the investigation. Despite his protestations to the contrary, the evidence shows that he played a “cat and mouse” game with the investigators... He advised Law Society staff that her requests were not on the top of his priority list and that he saw the additional requests as a constant harassment.”
He was suspended for 45 days and ordered to pay all associated costs.
He was suspended again in 2011, 2012 and 2014.
“(Welder's) conduct record is, in short, abysmal.”
Appearing on his own behalf, Welder took the position that because his conduct with the company could have been worse than it was, he should not be disbarred.
“I can only say that I did not know any of the depositors, did not encourage them to invest with (the company), I did not invest with (the company) nor did I loan anyone money to allow them to invest in (the company) or continue the impression that the (the company's) Ponzi scheme was legitimate,” he told the panel.
“By failing in his professional obligations and ignoring all of the red flags around (the company), seven separate investors invested $1,653,425 in a Ponzi scheme. (Welder) has a significant disciplinary history – described by the panel in his most recent disciplinary finding as singular. The only appropriate penalty for such serious conduct coupled with such a significant disciplinary record is disbarment. Public confidence in the integrity of the legal profession would be undermined by allowing anything less than disbarment in this case.
“Law Society counsel argues that the Respondent is ungovernable and should be disbarred.”
Welder was also ordered to pay costs in the amount of $19,194.40.
To contact the reporter for this story, email Adam Proskiw at firstname.lastname@example.org or call 250-718-0428. To contact the editor, email email@example.com or call 250-718-2724.
News from © InfoTel News Ltd, 2015