Under-fire lawyer officially running for Richmond mayor

A real estate lawyer at the centre of a Law Society of B.C. professional misconduct investigation has officially entered the race to be Richmond’s mayor.

Hong Guo, who runs her own law firm in Richmond, dropped her municipal election papers on Thursday, ahead of the Oct. 20 vote.

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In her official candidate profile on the City of Richmond’s website, Guo talks about arriving in Canada 25 years ago, “with a sense of excitement to experience a mature democratic country.

“But in recent years, I have been forced to witness increasingly unacceptable social issues.

“Consequently, as a resident of Richmond who cares deeply about my community, I can no longer stay on the sidelines and pretend to accept the status quo.”

Guo goes on to say that “it is time for change, with a fresh vision for this unique community to realize its potential to become a vibrant, world class city: a Global Village, working in harmony to build a truly integrated Richmond our children and all its residents can be proud of.”

Nominators on her application for mayor form are a Peter Schellenberg and a Dr. Greg Gerrie.

The Richmond News reported earlier this week how Guo is accused of professional misconduct by the Law Society, following the organizations’ review of how millions of dollars went missing from her company’s trust account.

She will face a hearing before a disciplinary panel, on a date yet to be determined, over accusations of: breaching accounting rules; failure to supervise; improper delegation; misappropriation or improper withdrawal of funds; breach of undertaking to the Law Society and breach of a Law Society order.

Hong Guo, founder and director of Richmond-based Guo Law Corporation, is officially running for mayor of Richmond in the upcoming election, despite that she is under investigation from the Law Society of BC. Daisy Xiong photo

The allegations “are unproven until a discipline hearing panel has determined their validity,” wrote a Sept. 4 citation on the Law Society’s website.

The Law Society told the Richmond News that all of the charges are related to the $7.5 million funds that went missing from Guo’s company’s trust fund in 2016, when Guo claimed two former employees, including her bookkeeper Jeff Li, stole the funds and transferred them to China.

“The law society is alleging, because of those accounting errors or misconduct, she [Guo] facilitated the disappearance of the money; she created an environment for her bookkeeper who allegedly stole the money,” said David Jordan, communications officer for the Law Society.

If the allegations are proven valid by a hearing panel, Guo will face disciplinary action ranging between a reprimand, a fine, a suspension or a disbarment, “depending on the circumstances,” according to Jordan.

However, Guo told the News that the whole thing is a “theft matter”, that her two accounts were “in a mess after the theft happened” and that the “criminals” destroyed her records.

“I'm sure I made mistakes when all this [the missing funds] occurred. I have never experienced this before. I will take responsibility for them,” said Guo.

“But I want to be clear – nobody says I took any money, ever, for my own use. I have made sure everyone who lost money has been fully repaid, out of my insurance and out of my own pocket.

“In a few months, I will have a chance to explain in a hearing what happened.”

The Law Society confirmed in March that the trust shortage was eliminated, but Guo is now facing more than 30 misconduct allegations, all of which took place between 2014 and 2016 and involved tens of millions of dollars.

Accusations include Guo’s repeated withdrawal of funds from her trust accounts when there were insufficient funds and her failure to report account shortages from January 2014 to March 2016.

Guo is also alleged to have failed to supervise her bookkeeper [Li], thereby facilitating the misappropriation of more than $7.5 million from her trust account between January and March 2016.

Between February and April 2016, Guo gave 120 pre-signed cheques to a non-lawyer for her trust accounts and permitted a non-lawyer to issue 95 cheques drawing $53 million from the trust accounts “without proper supervision,” according to the Law Society.

Guo also faces accusations of withdrawing or authorizing the withdrawal of more than $1.8 million in trust funds by way of a debit memo.

“It’s the wrong way of doing it. The rule specifies exactly how...you are not allowed to do it by debit memo,” explained Jordan.

Other allegations include Guo’s failure to maintain sufficient funds in her trust accounts to meet her obligations with clients, and failure to maintain accounting records including bank statements, cancelled cheques, and bank deposit slips.

The Law Society also alleges that Guo has breached an undertaking to the Law Society during the time when the Law Society took partial custodianship of Guo’s law firm after the funds went missing.

“Once the law society started investigating, they required Guo to do certain things but she allegedly did not do them,” said Jordan.

For example, the Law Society accused Guo of failing to immediately open a new trust account for new client matters. Guo, instead, deposited trust funds totalling more than $196 million into an old account.

Guo is also alleged to have withdrawn trust funds of more than $7.2 million through 30 cheques that had not been signed by a second signatory, from June to July 2016.

Announcing her mayoral bid in June, Guo said in a recent interview with theBreaker that she was reconsidering running for mayor after the Law Society’s allegations, because “it’s going to take a while to clear your [my] name.”

--With files from Daisy Xiong

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