Lawyer Ripped Clients Off For $4.8 Million, Peel Regional Police Allege

Update:

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A former lawyer has been arrested after police say almost $5 million was embezzled from his clients.

Richard Chojnacki, 61, of Oakville, was arrested Friday and charged with defrauding the public, Peel Regional Police said Wednesday.

Chojnacki was disbarred last year by the Law Society of Upper Canada for allegedly misappropriating $3 million in funds. Prior to that, he had a law practice on Mississauga Rd. in Mississauga

According to the Law Times, the law society found Chojnacki to have misappropriated more than $3 million from funds held in trust for two toy company clients, including $500,000 applied to pay his law practice and personal expenses. The Law Society of Upper Canada made a Notice of  Application against Richard Kazimierz Chojnacki on October 30, 2007 – it took three (3) years to make a finding in the disciplinary hearing on October 19, 2010 and another year for police to charge Mr. Chojnacki for misconduct that stemmed all the way back to 2003.

During the hearing, the lawyer testified that he had a recurring addiction to Percocet since a serious car accident in 1984.

Police say the current investigation focused on client funds that were supposed to be held in trust, or as short-term personal loans known as promissory notes.

The clients later discovered that their notes were worthless and that their money had disappeared.

Police say they have identified six victims who lost a total of $4.8 million between 2003 and 2010, but believe that others may have also been defrauded.

Results of the Law Society of Upper Canada Disciplinary Hearing, Conducted on October 19, 2010:

Richard Kazimierz Chojnacki was found to have engaged in professional misconduct and/or conduct unbecoming a lawyer for: (1) misappropriating and/or misapplying $3,100,669.52, more or less, from funds he held in trust in an escrow account on behalf of RP Toys Ltd. and Patch Products Inc., first by paying the funds out to his general and other accounts and then by applying $555,769.51 of the $3,100,669.52 to pay his law practice and personal expenses and to make payments to 3rd parties unrelated to RP Toys Ltd. and Patch Products Inc.; (2) misappropriating and/or misapplying $735,000.00 more or less, by making an unauthorized payment to himself form RP Toys Ltd.’s account in purported repayment of a loan he made to RP Toys Ltd., and then by applying the funds to pay his law practice and personal expenses and to make payments to 3rd parties unrelated to RP Toys Ltd.; (3) failing to act with integrity and knowingly encouraging and or assisting in dishonest conduct by RP Toys Ltd., in the manner in which he carried out his obligations as escrow agent; (4) knowingly encouraging and/or assisting in dishonest conduct by RP Toys Ltd, by counselling his client RP Toys Ltd. to breach a forbearance agreement and by participating in the scheme to divert RP Toys Ltd.’ s income stream from the Royal Bank of Canada’s appointed monitor; (5) offering misleading evidence and knowingly deceiving the court and the plaintiff in court proceedings in which he was representing himself as a defendant; (6) misappropriating $53,500, more or less, that he received in trust for his client R.M., first by depositing the funds to his general account and then by applying the funds to pay his law practice and personal expenses and to make payments to a 3rd party unrelated to R.M.; and (7) misappropriating and/or misapplying $439,862.51, more or less, from funds he received in trust on behalf of his client, N.L., first by depositing the funds to his general account and then by applying the funds to pay his personal expenses and to make payments to a 3rd party unrelated to N.I. By Decision and Order dated October 19, 2010, the Hearing Panel ordered that: (1) the Lawyer’s licence is immediately revoked; and (2) the Lawyer shall make payment of full costs to the Law Society in the amount of $277,205.74, inclusive of the $1,500 set out in the previous order of September 15, 2009, to be paid within 30 days.

 

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