Gregory S. Yanke.

Image Credit: YANKELAW.COM

A BC lawyer who allowed his trust account to be used to receive and send $1.6 million to various overseas clients and companies in "suspicious circumstances" has been suspended for nine months.

According to a June 15 Law Society of BC decision, Nanaimo lawyer Gregory S. Yanke failed to identify and verify numerous clients but permitted more than US$1.2 million to pass through his trust account over a four-year period.

In one instance, in 2012 Yanke opened a US company for a client in Lebanon he'd never met and a few years later facilitated a share buyback that made an aunt of the company's principal more than $200,000.

The decision says the company had minimal business operations and assets and no significant revenue.

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At one point a wire transfer came through from a Belizean company for almost US$200,000.

"Funds were received by wire transfer from a jurisdiction with a reputation for banking secrecy and/or weak anti-money laundering regulations," the Law Society says.

The decision says in 2018 the company changed its name and two days later authorized a forward stock split.

"At the time, the lawyer knew that a forward split could be done in preparation for a 'pump and dump' (a form of securities fraud), by creating more stock for potential market manipulation," the Law Society said.

None of the companies or individuals involved are named in the decision.

The Law Society lists multiple "suspicious circumstances" Yanke should have noted.

"Funds were received from a foreign country where there was no apparent connection between the country and the client," the decision says. "There was an absence of documentation to support (the) company's... business activities."

The decision says Yanke, who began practicing in 1996, admitted he ought to have made further inquiries "to guard against becoming the tool or dupe of an unscrupulous client or other persons."

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In another instance, Yanke worked for a public company trading on a US penny stock market. It was a shell company, with no operating business.

Again, the Law Society says the company had no business operations with minimal assets and no significant revenue.

However, Yanke allowed it to hold large deposits of money in his trust account without providing substantial legal services.

A share transaction took place that "greatly exceeded" the price for which the shares were purchased.

The Law Society says this should have been a red flag that Yanke had to make further inquiries about the company.

In 2018 he had a phone call with two individuals who retained him to do legal work in the reorganization of a US company. He never identified the people he was working for.

"A large amount of funds flowed through the Lawyer’s trust account without the Lawyer having adequate details of the purpose of the payments," the Law Society said.

In another instant in 2017, Yanke was retained to prepare a purchase agreement for software developed in BC.

The deal involved two individuals who were under investigation for securities fraud and market manipulation.

Again, the Law Society says this should have alerted the lawyer to "suspicious circumstances."

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Yanke signed a consent agreement admitting that he allowed his trust account to be used by six clients "despite suspicious circumstances."

The Law Society suspended him for nine months and barred him from operating trust accounts.

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