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Lawyer in hot water over paralegal’s theft

|Written By Kendyl Sebesta

A Hamilton, Ont., lawyer who worked with former paralegal Shellee Spinks is facing sanction after a Law Society of Upper Canada hearing panel found him guilty of professional misconduct stemming from Spinks’ theft of $893,000 from his trust account.

Michael Puskas, according to facts admitted at a hearing on March 30, provided Spinks with pass code information connected to his Teraview account, administrative access, and unsupervised use of an old trust account used for mortgage transactions at his Hamilton law firm between 2002 and 2008.

Spinks then used Puskas’ pass code and letterhead and forged his signature to transfer money from the old trust account to her personal bank account to feed an extensive gambling habit without the lawyer’s knowledge.

In 2010, Spinks received a sentence of four years in jail after the law society examined 42 files with Puskas’ help that contained information detailing the paralegal’s theft. Spinks, according to facts read out by law society counsel, had established a relationship with an unnamed TD Bank manager who was fired shortly after the paralegal’s arrest.

TD Bank, the law society counsel noted, reached a settlement in a related class action last February.

But Puskas said while he admits he engaged in professional misconduct, he said he never shared office space with Spinks and never had a formal employment relationship with her. He noted he and Spinks operated on a fee-sharing arrangement they had agreed to before she began working at the firm.

“Real estate was five per cent of my practice at the time, so it wasn’t feasible for me to leave court and return to the office every time,” Puskas told a three-member hearing panel at the law society late last month.

“After some time, I fell into the practice of allowing Shellee to handle my trust account while I was in court and allowed her to sign off on the transactions after I’d reviewed them.”

Puskas told the hearing panel he never realized Spinks was diverting trust money into her personal account, which she held under a company she referred to as Spinks Law.

“I asked her to close the trust account in 2006 when I formed a partnership with another lawyer in Hamilton,” said Puskas. “I thought that she had done so. I never conducted a detailed analysis of the old trust account but I didn’t authorize the removal of any funds from it.”

But Puskas admitted he was suffering from depression, often drinking five nights a week, and struggling with his mother’s illness and his own separation from his wife at the time of Spinks’ theft, all of which made it difficult to concentrate on his law practice.

“Shellee’s arrest woke me up. My phones were cut off, I was evicted from my office, and my partner left me. I had to decide if I was going to clean myself up and get my practice back or this would be it,” Puskas told the hearing panel.

But law society counsel Amanda Worley argued Puskas’ personal circumstances, while concerning, weren’t enough to warrant the abdication of his professional responsibilities.

“The law society sent a cautionary letter to Mr. Puskas in 2005 following an investigation,” said Worley. “It warned him against allowing Ms. Spinks to use his pass code, that Ms. Spinks was giving legal opinions although she was not a lawyer, and that her signing documents on Mr. Puskas’ behalf was not authorized.

It appears Mr. Puskas did not heed that warning.”

Worley told the hearing panel Puskas also borrowed more than $200,000 from Spinks to cover losses in his billings during the time of the theft and hasn’t attempted to pay her back.

“I assumed the loaned money was stolen following the police charges against her,” Puskas told the hearing panel.

“I never had any discussions with her about repayments.”

Puskas was on vacation in Mexico in 2007 when he received a phone call from another lawyer in Hamilton telling him several of his clients had visited his law office looking for him and Spinks and claiming they were missing significant amounts of money.

Puskas said he called the law society the next day to report the thefts. Spinks was arrested shortly thereafter.

For her part, Spinks told Ontario Superior Court Justice Barry Matheson during her sentencing hearing in 2010 that she regretted her actions.

“I want to say that I’m sorry, knowing that words are not enough,” she said. “I’m mortified hearing all the details of what I’ve done.”

Still, Spinks suggested that while Puskas had a hunch about the thefts, he nevertheless took a loan from her to supply “employees’ wages, law society dues, and trips to Mexico.”

Puskas denied knowing Spinks had stolen the money. “If I had known, I never would have touched a real estate file in my life,” he said.

Six members of the Hamilton bar who have worked with or known Puskas attended the hearing late last month. Supporters included an ex-girlfriend who was there for “moral support.”

The law society is seeking revocation of Puskas’ licence but will accept resignation with conditions.

Puskas’ lawyer, Tom Scoccia, has requested a suspension of Puskas’ licence instead. The regulator currently lists Puskas as a bankrupt licensee who can’t practise real estate law or operate a trust account. He can, however, continue to work as a criminal lawyer. The parties have yet to set a date for sentencing.

For more, see "Lawyer says he couldn't have stopped paralegal's pilfering."

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