A man was jailed this month for a $150,000 fraud scheme that saw him assume the role of a powerful Toronto lawyer, but a police investigator suggests the losses could have been much less had the Law Society of Upper Canada taken more aggressive action.
“I personally have a lot of questions about what was done on the law society’s end to investigate the complaints that had come in early on,” says Toronto police Det.-Const. Corey Jones. “They were the first ones to have been notified about anything suspicious going on with this individual.”
Law society communications adviser Susan Tonkin responded that LSUC investigations are confidential but wouldn’t comment on the case. In an e-mail to Law Times, however, Tonkin said clients can verify a lawyer or paralegal’s status through the law society’s online directory.
“If the person claiming to be a lawyer or paralegal licensee is not listed in the database or if there is a discrepancy with the person’s address or other information, it is quite possible that he or she is a fraudster and/or engaged in the unauthorized practice of law or unauthorized provision of legal services,” she said.
The latest chapter in the case at hand began in late 2006 when David Villanueva, 48, fled Nova Scotia and set up shop in Toronto, says Jones. He obtained fake identification in the name of David Carter, forged tax returns, opened bank accounts, obtained credit cards, and took on the persona of a successful Miami lawyer.
He hung out a shingle at the Toronto Star building in the city’s downtown for a firm he called Carter Herzog, the latter name attributed to his purported lawyer-mentor from Miami who had died, says Jones.
Villanueva then hired employees, including an office manager and an assistant. He also hired two actual lawyers, one of whom, Marc Charrier, said in a victim impact statement filed in the case that the fraud by his boss left him depressed, caused him to lose weight, and put him in financial distress due in part to not receiving $7,000 in pay.
“It has also caused me worry because, even though I know police and the law society know that I and other people in the office did not do anything, I don’t want my career to be torpedoed before it’s really begun because of the actions of this man,” Charrier wrote.
Villanueva attempted to attract clients by advertising in ethnic media outlets and offering services for those dealing with Workplace Safety and Insurance Board or immigration matters.
Clients were told he could help them land a massive settlement from the WSIB and charged a retainer of $500 to $2,000. On top of that, he told WSIB claimants they couldn’t keep any settlement they had received if they hoped to appeal it and got them to give him the money to hold in a trust account, says Jones.
But he had no trust account and placed those funds directly into bank accounts under the name of David Carter. In an effort to show clients he had completed work on their behalf, Villanueva would create fictitious letters purportedly sent to former employers or the Immigration and Refugee Board of Canada, says Jones.
But as time went on and a growing number of clients saw no results stemming from their cases, they came forward with complaints starting in the middle of 2007 to the LSUC, says Jones.
He says the law society dealt with those complaints through written correspondence to David Carter “basically telling him that he wasn’t following the rules for foreign lawyers in Canada and in Ontario.”
Villanueva responded by saying he wasn’t aware he was breaching the rules and promising to hire lawyers from Ontario to perform services, Jones says.
In the meantime, Jones notes that the two actual lawyers at the firm, both recent Ontario law graduates in their first jobs out of school, were the only people at the operation to be doing bona fide legal work.
“In fact, it was one of them that began to see that nothing ever really was coming of the work that Carter was supposed to be doing. That originated a complaint again with the law society, as well with the police themselves.”
By then it was the fall of 2007, and Villanueva began to see the young lawyer was catching on to the fraud. He proceeded to complain to police that the lawyer had stolen laptops from the office, prompting the pair to part ways.
“But it wasn’t really until the end of 2007 when the whole house of cards started to fall apart,” says Jones.
There were now several staffers in the office - the office manager, a couple of researchers, an investigator, and two lawyers - and the firm had a reasonable client base. Those clients were eager to resolve their matters, says Jones.
Meanwhile, Villanueva was running up debts with a car-rental agency and wasn’t paying rent on a furnished condo, says Jones.
“Clearly, he could see at this point that he was running a real risk of being found out. . . . It’s known that he went around and viewed some $1-million homes with one of his employees who he’d convinced he’d buy the home and put it in her name.”
By the time Christmas of 2007 came around, Villanueva knew the game was over, Jones says. He threw a big office party, gave his employees the week off between Christmas and New Year’s Day, and disappeared after telling people he was leaving to visit his family. The employees and his clients never saw him again.
“Everything collapsed, leaving the employees to pick up the pieces: the complaints from the clients wondering where their files were, what was happening with their cases,” says Jones. “That’s really when the flood of complaints to the police came in.”
Villanueva received an eight-year jail sentence for convictions on three fraud charges, says Jones. It was a difficult scam to pull off, he notes, adding Villanueva is extremely intelligent and was able to create the persona of a powerful attorney.
Meanwhile, aside from a letter that was sent, Jones says he didn’t come across any additional indications that the public was protected by law society oversight in the Villanueva case.
“Certainly, upon seeing this individual had no registration or history with the law society, certainly investigators should have attended personally, and preferably unannounced, to determine what was going on at that office,” says Jones, who suggests police and the law society could benefit from better communication in general.
“Really, I don’t think it would have taken much in the way of effort to reveal this for the fraud that it was quite early on. Or, frankly, for that matter, if they couldn’t investigate, contact the police to say, ‘Can you look into this?’”