Ron Pelletier.

Image Credit: linkedin.com/Ron Pelletier

A BC lawyer who allowed fraudsters to conceal $31 million in his trust account, and used burner phones because he feared US authorities might be on to him, has been found to have committed professional misconduct.

The Law Society of BC found that Ronald Norman Pelletier had encouraged dishonesty and crime, and knowingly possessed the proceeds of a huge international securities fraud.

According to a June 26 Law Society of BC decision, between 2014 and 2018 Pelletier allowed his trust account to receive and disburse roughly $31 million from clients he knew were under investigation for securities fraud and that the money was the proceeds from that fraud.

"It is clear that (Pelletier) was not providing legitimate legal services. Rather, he was assisting his clients in hiding the funds from the securities fraud from the American authorities," the law society decision read.

The society said he went to great lengths to cover up his clients' illegal money and bought 20 burner phones over 18 months out of fear the American authorities might tap his regular phone lines.

The regulator said the evidence against the Vancouver-based lawyer was "overwhelming."

"(Pelletier) did not provide any substantive legal services. Instead, he treated his trust account as a bank," the law society said. "He moved the funds in and out as directed by his clients. The funds were used to purchase a Vancouver property, renovate a different property, purchase a car in Toronto and a ring from Tiffany & Co."

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The decision said Pelletier is now suffering serious health problems, which affected his ability to answer questions from the law society during a hearing.

"He seemed unaware that his answers were not an excuse or a defence but actually supported the law society’s allegations," the decision read.

The decision didn't mention what the securities fraud was, but according to a Vancouver Sun report it involved a $78 million pump-and-dump scheme over Marley Coffee.

In 2017, the US Securities and Exchange Commission fined UK and Canadian dual citizen Wayne Weaver $58 million for his perpetrating the scheme.

Numerous others were also fined including Kevin Miller, a British businessman who settled on a $1.1-million fine with U.S. authorities.

Last fall, the Vancouver Sun reported Miller was suing the Law Society of BC, in an attempt to recover more than $3.5 million he paid into Pelletier's trust fund which was now under the regulator's control.

In the pump-and-dump scheme, Pelletier's clients artificially drove up the price by making it appear there was a third-party investor.

The investor didn't exist and the stock value crashed dramatically. Pelletier's clients' made millions of dollars.

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Pelletier admitted to the law society that he was aware of the investigation into the scheme and that he "knew or suspected" the proceeds had come from fraud.

He testified he was keeping the money for the purpose of a "settlement" with the American authorities.

"He testified that it would not be in his clients’ interest for the American authorities to know what amount of money was available for a settlement," the decision read. "(Pelletier) testified that he hoped, if the American authorities did not know how much money was available, he might be able to get a more favourable settlement for his clients."

The society didn't like his reasoning describing it as "inappropriate and unethical."

"Lawyers provide legal advice and legal services. They do not hide illegal proceeds from government authorities. Doing so makes a lawyer a party after the fact," the law society said.

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While the society said the conduct makes him a "party after the fact" no criminal charges have been laid in the case.

The law society found Pelletier had committed professional misconduct and a penalty will be decided in the future.

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