A Brampton, Ont., lawyer is suing a former real estate employee in a case alleging she ruined his finances and his professional reputation by tricking him into a mortgage fraud scheme.
The case comes after Charles Amissah-Ocran received a warning from the Law Society of Upper Canada almost a year ago that the employee was a known fraudster.
Amissah-Ocran wants $5 million in damages from Claire Graham, whom he employed as a conveyancer, and several of her associates for “loss of income on account of fraud, conspiracy, and breach of fiduciary duty,” according to a statement of claim filed with the Ontario Superior Court in Brampton on Nov. 5.
The law society suspended Amissah-Ocran on an interim basis on Dec. 2 after a string of complaints about suspect deals in recent months put the regulator’s spotlight on his practice once again.
Further proceedings will take place in the next two weeks to determine whether he should receive an interlocutory suspension until the parties can schedule a full hearing on his alleged misconduct.
An investigator with the law society ordered him to stop using Graham for real estate services as far back as January, but Amissah-Ocran kept her on in a litigation support role and put her sister and nephew in charge of the real estate side of his practice.
He claims he complied with the law society request by entering into an understanding with Graham that she would stay away from his real estate practice but alleges she reneged on the deal.
“With hindsight, I look so foolish,” Amissah-Ocran tells Law Times. “My failure to cut all ties with Claire was the biggest mistake of my life.”
A factum filed by law society counsel Tanus Rutherford on Nov. 26 reveals the LSUC is investigating seven complaints concerning numerous properties. It has reviewed 14 suspicious transactions so far and alleges Amissah-Ocran “misapplied $5 million or allowed Graham to do so.”
“It appears that, instead of paying out prior mortgages, the lawyer diverted funds to other uses,” Rutherford wrote.
Amissah-Ocran says his accountant is still working on reconciliations but he believes his trust account is short at least $900,000, a figure he fears may rise even further.
In an affidavit to support his own claim, Amissah-Ocran accuses Graham of orchestrating “an elaborate scheme” in order to divert money to the company of a friend, Rosalyn Blake, the owner of the Rozz Entertainment Complex restaurant and conference centre in Brampton.
None of the allegations have been proven in court. “I believe that Ms. Blake and Ms. Graham arranged to deplete my trust account of mortgage funds to bankroll Ms. Blake’s business,” Amissah-Ocran wrote in his affidavit.
The lawsuit also names Blake as a defendant, along with her husband. Neither she nor Graham could be reached for comment.
Things came to a head in September when CIBC demanded a final report on a $376,000 mortgage that was supposed to have closed in May.
According to Rutherford’s factum, the mortgage funds were disbursed to Blake even though the deal never closed. The money was allegedly returned to CIBC using funds from another mortgage acquired by Blake, according to the factum.
Amissah-Ocran learned of CIBC’s complaint to the law society on Sept. 27. In his affidavit, he says that was the first time he found out about the problem and alleges Graham had been “concealing communications from CIBC from me.”
According to Rutherford, the law society has struggled to keep up as complaints began flooding in since then.
Instead of going to police, Amissah-Ocran says he launched his own investigation and confronted Graham and Blake.
At one stage, he alleges in his claim that Blake asked him to “knowingly become part of the fraudulent scheme” by allowing the cycle of each fraudulent mortgage paying off the last to continue until she could find the money to make up the shortfall.
In an affidavit filed with the LSUC, Amissah-Ocran said he waited until Nov. 3 to complain to police because he feared Graham would stop talking to him about her scheme.
“If Claire is charged, she will be directed not to talk to me anymore,” he wrote. “I wanted to obtain as much information as I could from her before reporting the matter to the police.”
Amissah-Ocran says he hopes the lenders who paid out the fraudulent mortgages will join his lawsuit. He wants a receiver appointed to take over Blake’s business and recover the lost money.
“I may not be able to finance it all the way on my own. I’m hoping some of them will join in the litigation at some stage.
Obviously, they will be interested in getting their money back. I’m hoping that one of the side-effects is that they [Blake and Graham] will be crippled and other lawyers will know so they cannot be taken in by them.”
Amissah-Ocran began his business relationship with Graham in 2006 when he moved his office from Mississauga to a building in Brampton. Graham’s own legal services business, Grabasc and Associates, was based down the hall.
According to the law society factum, Amissah-Ocran handed over his Teraview diskette and password to Graham for electronic title registration in April 2008.
The LSUC became aware Graham was working with Amissah-Ocran earlier this year when it investigated a complaint unrelated to mortgage fraud.
According to its factum, law society investigation counsel Eric Smith asked Amissah-Ocran to stop using her for real estate services and retrieve his Teraview diskette. Amissah-Ocran also received a copy of the LSUC decision that disbarred Winston Mattis the previous year.
A law society panel found Mattis had failed to supervise Graham, who ran his real estate practice with another law clerk.
Graham was involved in 15 fraudulent mortgage transactions in which the panel found payments were made to her out of the funds by altering the amounts owed in land transfer tax.
According to the law society factum, Graham told an investigator Amissah-Ocran paid her $200 per real estate deal and allegedly prepared trust cheques at her direction without reviewing the file.
But Amissah-Ocran alleges in his own affidavit that Graham faked documents and created false parcel registers in order to get him to sign off on trust cheques. “Her deception was extensive and deep,” he wrote.
The law society also accuses him of hampering its investigation by failing to produce client files, but Amissah-Ocran claims he’s unable to do so because Graham has disappeared with all of his real estate files.
At a hearing on Dec. 2 to deal with a motion to suspend Amissah-Ocran on an interlocutory basis, he pleaded to be able to continue his practice.
The lawyer, who is 61 and was called to the bar in 1998 after practising in Ghana and Europe, said suspension would be a “crushing” blow. “It is virtually impossible for me to find alternative employment,” he said, adding he’d need an income in order to prosecute his action against Graham and Blake.
But Rutherford had little sympathy. “He is the author of his own misfortune,” she told a law society panel. “He played cute with the warning he was given.”
The panel eventually granted Amissah-Ocran an adjournment to find counsel and discuss his case, but he can’t practise in the meantime. The motion for interlocutory suspension is due to return before the end of the year.