A Vancouver lawyer has agreed to a one-month suspension for professional misconduct, after admitting he failed to make reasonable inquiries about 15 files that had “red flags.”
Naeem-ul-Nushad Ahmed facilitated 129 transactions with a total value of more than $31 million in relation to those files.
In a consent agreement with the Law Society of B.C. that was approved late last year and published online Friday – the date his suspension commenced – Ahmed admits that he failed to “be on guard against becoming the tool or dupe of an unscrupulous client or other persons.”
He also acknowledged failing to make a record of the inquiries he made about the transactions.
The document indicates he failed to ask about things like “the identity of his clients or other parties,” the relationships between them, “the nature and purpose of some or all of the transactions,” the source of the funds he received and the reason the funds needed to go through his trust accounts, among other issues.
“Some or all” of the 15 files to which the transactions were related involved “a known fraudster and undischarged bankrupt,” who is not named in the consent agreement, but rather referred to throughout it as “AA.”
AA’s involvement is listed as one of the red flags that Ahmed missed when conducting the transactions.
Others included:
- Involvement of numbered companies appearing to be connected to a consortium of corporate entities, which had the effect of concealing the identities of beneficial owners;
- Large, complex transactions involving multiple properties, structures and parties;
- Multiple loans on the properties (many of them short-term and/or high ratio and involving private lenders, high interest rates and/or associated fees);
- Competing and/or inconsistent contracts and agreements which were often modified, including verbally, and apparently frequently breached;
- Urgency and/or short notice changes and transaction timelines; and
- Unclear true source of funds used in the transactions.
Lawyer’s explanation
The consent agreement goes into detail about the circumstances of each of the 15 files, all of which involve real estate transactions.
“The lawyer says that, as a part of their development projects, AA and AA’s associates incorporated numbered companies which usually contained a single property as their only asset,” the consent agreement reads, summarizing Ahmed’s explanation of his misconduct.
“The lawyer believes that it is not unusual in real estate development to create companies for the sole purpose of a single property venture.”
According to the document, Ahmed believed AA was involved in the transactions as a consultant because of “his vast business and real estate experience.”
The lawyer said he was unaware that AA was an undischarged bankrupt “who may have been using the transactions to circumvent Bankruptcy Act restrictions."
“The lawyer acknowledges and agrees that the above explanations do not excuse his conduct and, specifically, his failure to make reasonable inquiries in the face of numerous red flags, and records of those inquiries,” the document reads.
While it accepted Ahmed’s proposal for a one-month suspension, the law society noted that “significant periods of delay” during its investigation – delays the society admitted were its own fault – were a significant mitigating factor in the case.
“Absent this delay, the law society would have sought a longer suspension,” the society said in a news release Friday.
Ahmed’s misconduct took place between May 2016 and January 2018. He has been a lawyer in B.C. since 2010 and has no previous discipline record, according to the consent agreement.
