His London housing project got $1.4M in investments. Now, the money is nowhere to be found
CBC
For the second time in his career, a lawyer and home builder at the centre of a stalled townhouse development in east London has had his licence suspended by the Ontario Law Society, this time over allegations that $1.4 million in buyers' deposits may have been "misappropriated and/or mishandled."
In an Oct. 30 decision, the Law Society temporarily suspended Philip Ugochukwu Okpala of Oakville from practising law after investigating his alleged mishandling of buyer's deposits. Those deposits were for purchases of units in an unbuilt 34-unit townhouse development at 1154 Hamilton Rd. Okpala acted as a vendor and lawyer in the transactions through his company, Lynphyl Homes Limited.
CBC News has also learned that Ontario's Home Construction Regulatory Authority (HCRA) is moving to not renew Okpala's licence to build and sell new homes, also in response to allegations he misappropriated buyers' deposits. His licence is set to expire next month and Okpala can contest the HCRA's decision in a hearing.
CBC News has acquired a sworn affidavit from the law society's forensic auditor Yvonne Skilton, who was called in to investigate in June of this year following complaints from multiple buyers made to the HCRA in 2023.
According to Skilton's affidavit, buyers complained they signed purchase agreements for the condo units from 2021 to 2023, and paid deposits to Okpala but had seen no progress on construction. Some of the buyers wanted out of the deals and their money returned. Also, he wasn't responding to their request for updates.
The affidavit said the HCRA began investigating in 2023 and repeatedly asked Okpala to provide details about balances of trust accounts for the deposits. However, Okpala failed to provide a full accounting of the money.
"It appears that the lawyer did not provide the trust account records that the HCRA was requesting at that time," Skilton wrote.
Skilton's report lists a total of 18 buyers' deposits submitted to Lynphyl. They range from $52,500 to $139,575 and together total just over $1.4 million. The purchase prices for the units were in the $500,000 range.
The auditor's report also flagged that Okpala deposited $65,000 of purchasers' money into an account that was not listed as a trust account.
"The holder of this account is unknown," Skilton wrote. "The lawyer [Okpala] did not disclose this account as being a trust account."
The handling of clients' money deposited into lawyers' trust accounts is governed by strict Law Society rules. In general, the money is held in trust with the lawyer acting as an intermediary during real estate transactions until the transaction is complete and the money is released.
The Law Society's rules say trust money must be handled with "special care" and not be "co-mingled with the licensee's or the firm's operating funds."
However, the Law Society's auditor's report said the funds in Okpala's trust account fluctuated in ways they found concerning.
"My review suggests that the lawyer did not hold sufficient funds in his trust account vis-a-vis the purchasers' deposits on a consistent basis," she wrote. At one point, the balance was below $6,000.
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