A Prince Albert Lawyer could face sanctions from the Law Society of Saskatchewan after being found guilty of four counts of conduct unbecoming.
Peter V. Abrametz, the older of the two Peter Abrametzs practicing law in Prince Albert, was found guilty in a decision released on Jan. 22.
A hearing was held over three days in May and two days in August 2017 into a formal complaint filed against Abrametz on Oct. 13, 2015.
Abrametz was found guilty of withdrawing trust funds for payment in a manner contrary to law society rules, causing trust cheques to be issued to a fictitious person for the purpose of transferring funds to himself, failing to maintain proper books and records in relation to his legal practice and entering into a debtor/creditor relationship with clients when his interests and those of his clients were in conflict.
Abrametz did not respond to a request for comment.
He could face a range of punishments, including a temporary suspension. A date for his discipline hearing has not been set.
The allegations levelled against Abrametz first came to the attention of Law Society investigator and auditor John Allen while he was investigating another lawyer at the same firm, Kristian Eggum, in 2012.
Allen scheduled an in-person visit to the office on Dec. 5, 2012. The day prior to his planned visit, Allen received a fax from Abrametz self-reporting eight transactions non-compliant with the rules. The fax said he had failed to promptly deposit money into his office account for legal fees.
Allen still proceeded with the site visit, but his focus was shifted. He spent parts of three days at the office, reviewing files, trust ledgers, bank statements and discussions.
As a result, the law society attempted to suspend Abrametz in February 2013. The two parties were able to reach an agreement that allowed Abrametz to continue to practice under conditions and supervision.
They again sought to suspend him in late 2014, after Allen’s report came out on Oct. 30, but Abrametz was allowed to continue practicing under conditions.
According to the law society’s rules, any payment for services rendered needs to be deposited into a member’s general account with his/her firm.
Abrametz charged clients 30 per cent of the money they win as a fee. He would pay them their portion from the firm, and then the client would endorse a cheque for the 30 per cent back to Abrametz himself, the ruling read, instead of to the firm’s account.
The investigator found this had been the case with only a handful of clients, despite the fact that Abrametz handled hundreds of cases a year.
Days before Allen was due to visit the office, an invoice was generated to account for the money Abrametz had received personally through the cashing of trust cheques. During the hearing, he attempted to justify the diversion of funds for personal use as a repayment of a shareholder’s loan. He was unable to provide any evidence that the firm owed him money as a shareholder loan, or any evidence that he was not in violation of the rule.
The committee found Abrametz circumvented the fees billing procedure “in order to obtain funds for his personal benefit without those funds having first been deposited to his law office account.”
When pressed, Abrametz admitted that at the time he thought it was a good idea and the easiest way to get money, but he acknowledged that, in hindsight, “it was inappropriate,” the ruling said.
“By issuing cheques to the clients and having the clients endorse those cheques back to the member as payment for legal fees, the clients were enlisted to participate in the member’s dishonest scheme,” the hearing committee wrote in their decision.
“The hearing committee was unable to imagine any explanation for the member’s conduct in this regard that would not bring disrepute upon the legal profession.”
The same allegations relate to one of the other charges. Abrametz was accused of improper bookkeeping, and on some files, statements of adjustments were not signed or dated. Others were conflicting.
Abrametz, and his wife, Brenda, who serves as part-time office manager, argued the records that aligned with the ledgers were proper, whereas others were drafts, or printed copies from electronic files that wouldn’t be signed or dated.
The hearing committee disagreed.
They found that several of the files contained statements of adjustments and invoices prepared intentionally “to give the appearance that legal fees were paid to the firm when those fees were in fact paid to the client and endorsed back to the member personal.”
This led the committee to conclude that Abrametz “deliberately and purposefully attempted to deceive by generating multiple conflicting statements of adjustments invoices and accounts that were neither proper nor accurate … in an effort to avoid detection of the behaviour for which this committee has found him guilty of.”
The charge of causing trust cheques to be issued to a fictitious person arises form an incident where Abrametz was accused of using a pseudonym to funnel money to himself.
He signed three cheques using a pseudonym, identified in the ruling only as P.S.
Those payments were also originally posted to the wrong trust account before being corrected. Abrametz argued that was unintentional, but Allen suggested Abrametz had more sinister motivations.
Both Peter and Brenda Abrametz said the pseudonym was often used as a longstanding joke in the family, to explain strange events, or to bid on charity items.
The hearing committee, though, was not amused.
“Use of the pseudonym P.S. may be a long standing joke in the Abrametz family, however, when it comes to the entrusted stewardship of money passing through a law firm’s trust account there can be no humour found in the member’s actions,” the committee wrote.
“The member’s cavalier attitude at the hearing … was disturbing. Lawyers are bestowed a respected privilege in regard to the receipt and disbursement of money.”
They didn’t accept that posting the money to the wrong trust account was an error.
“The evidence suggests that the act was deliberate on the part of the member,” they concluded.
The committee found him guilty of issuing trust cheques to a fictitious person and ruled it as conduct unbecoming.
The final charge has to do with an accusation that Abrametz improperly loaned money to his clients and charged them unreasonably high rates to do so.
According to Allen, Abrametz would routinely lend money through his office to clients and charge them a flat fee of 30 per cent, in addition to the 30 per cent fee for services rendered. That fee did not change regardless of how much money was provided or for how long.
According to the ruling, Allen’s calculations showed that the rate of interest charged and represented by that fee actually ranged between 51.6 and 10,950 per cent annually, depending on the length of time the money remained owing.
While Brenda Abrametz showed sample calculations of companies who lend money to people on potential settlements, the committee found the fee was greater than what other institutions would charge.
Further, the committee found that Abrametz didn’t loan the money out for necessary legal matters. Instead, they found the money was used to purchase things such as cars, paying a down payment on real estate, buying groceries, grad dresses, paying babysitters and even to travel.
Abrametz argued the loads were actually advances on funds expected to be obtained on behalf of the clients at the conclusion of the claim, and the 30 per cent was an attendance fee.
The committee disagreed.
Using the definition of “advance” in the dictionary, they ruled that it defines the payment of money to someone before it is due. As Ambrametz didn’t owe money to his clients, he couldn’t pay an advance. Thus, the money was a loan.
They also argued that companies that do loan to people in legal proceedings do so as regulated lenders, of which Abrametz is not.
““By incorporating unregulated lending service into legal practice he was acting outside the scope of the attorney client relationship for which he was retained,” they wrote.
“While not all business transactions are necessarily debtor/creditor relationships, all debtor/creditor relationships are business transactions prohibited by the code. Such relationships create and convey a pecuniary interest that inherently places the interests of the clients in conflict with those of the member.”
They also found the excess 30 per cent charged was excessive, because Abrametz is not entitled to charge clients for assessing files for credit worthiness for loans.
“The loans extended by the member to his clients were extensive and excessive,” they wrote. “There was the appearance of undue influence in the loan transactions.”
Abrametz was found guilty of engaging in a debtor/creditor relationship without following the necessary precautions, and ruled to be guilty of conduct unbecoming.
This story originally ran in the Jan. 24 subscription-based print and e-editions of the Daily Herald