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Pembroke lawyer receives two years for fraud

March 23, 2018 (Courtesy of thee Dailyobserver.ca) – A Pembroke lawyer will spend the next two years in a federal penitentiary after pleading guilty to defrauding his clients of $378,845 over a 15-month period.

During a sentencing hearing at the Pembroke courthouse Wednesday, Kenneth Conroy apologized for the hurt and harm his actions caused. In pleaing to one count of fraud and one count of breach of trust, he received two years probation, a $400 victim surcharge and ordered to pay $395,621 in restitution.

“I am deeply remorseful to my clients, my family and my profession,” the 64-year-old who practiced law in Pembroke for 32 years. “I’m deeply sorry for the harm and grief I have cause them. I fully appreciate the gravity of my actions.”

In passing sentencing, Justice Robert Selkirk said this was not a sophisticated crime concluding that Conroy’s actions were eventually going to be discovered. The judge said the Crown’s overwhelming evidence showed the lawyer misled his clients and knew he was committing an offence every time he took a cheque from them.

“He has undermined confidence in the justice system by taking advantage of three vulnerable clients,” said Justice Selkirk.

Reading from an agreed statement of facts, assistant Crown attorney Peter Napier recounted that a police investigation began the day after Conroy retired in August 2015 after the lawyer attempted to commit suicide. Clients subsequently made inquiries at Conroy’s office only to learn that the funds they had entrusted to him had been misappropriated by the solicitor. The Law Society of Upper Canada then took over responsibility for Conroy’s practice.

The court heard that in January 2013, an area man hired Conroy to assist with the estate of his deceased father. Months later, Conroy advised the client of an outstanding tax bill with Revenue Canada. Conroy explained that there was $92,334 in taxes outstanding from the estate owed to the tax agency. Conroy informed the client he could designate the lawyer as an agent to deal with Revenue Canada directly.

In April 2014, the client wrote Conroy a cheque for $20,000. The face of the cheque under the memo indicated it was for the CRA (Canada Revenue Agency).

The cheque was deposited into the Bank of Montreal and subsequently withdrawn from the client’s account. Conroy then provided the clinet with a letter of account indicating a payment had been made to Revenue Canada. On three later dates, Conroy wrote to the client requesting amounts of $18,500, $40,000 and $30,000 so that the lawyer could settle outstanding taxes with Revenue Canada.

“Revenue Canada did not receive any funds from Mr. Conroy during this period of time,” explained Napier.

Although the initial amount owing was $92,334, no payments were made by Conroy on behalf of the client and the Revenue Canada debt grew to $105,183 as a result of interest charged by the tax agency. The client later received $105,000 in compensation from a compensation fund operated by the Law Society of Ontario (formerly the Law Society of Upper Canada).

In the second case, Conroy was hired in June 2015 to handle a separation and divorce settlement for an area woman who was to receive $305,000. She subsequently discovered a shortfall of $88,000. Conroy informed her that he would need a couple of days to complete the transaction. She contacted the Law Society shortly after hearing of Conroy’s suicide attempt. The Law Society eventually paid out $88,845 in compensation to the client.

In the third case, Conroy was hired in June 2015 to provide legal representation to an area man who was going through a matrimonial separation. The client provided Conroy with a certified cheque for $185,000 to be held in trust. The money was to allow Conroy to facilitate any financial payments associated to the separation agreement. The client sent a series of emails to Conroy between July 26 and Aug. 19, 2015 in order to discuss the outstanding funds in the lawyer’s possession.

Conroy said he had not yet completed arrangements in the separation agreement. A subsequent investigation showed that none of the $185,000 had been used by Conroy to pay any obligations for his client. The Law Society eventually compensated the client $150,000, the maximum claim allowed by the organization’s compensation fund. In addition to the $35,000 not covered by the society, the client incurred the cost of interest and insurance premiums in the amount of $15,727.

The Law Society recovered $17,042 from Conroy’s trust account. The court heard that the total losses suffered by the victims not compensated for by the Law Society was $51,805. The Crown called for a prison sentence of between three and five years.

“This is a major fraud committed by someone who was in the most well-defined position you could be in,” said Napier.

Making his submissions, defense counsel Sean May asked for a two-year prison term saying his client took responsibility for his actions with a guilty plea indicating his client never intended to take the matter to trial. May told the court his client was facing significant pressures from a matrimonial break-up, as well as having to support his 10 children. He had to declare bankruptcy and has since been diagnosed with a major depressive disorder.

“The weight of this led to Mr. Conroy attempting to harm himself,” said May adding his client has lost his reputation as a solicitor as a result of the conviction. “Mr. Conroy has lost significant standing in the community.”

SChase@postmedia.com

Deborah McCoy – Is an investigative journalist and has over 17 years of investigation experience in both the private and public business sectors. Since joining CFN, Ms. McCoy has become a true advocate for victims of fraud and increasing the public’s awareness in fraud prevention.