Lawyer couple accused of stealing millions from homebuyers while law society stalled
CBC
A husband-and-wife law firm in Toronto has been shut down, lenders have moved to seize their family homes, and they're facing 15 lawsuits and a police investigation after millions of dollars in client money went missing from the firm's trust accounts.
The saga of Nicholas Cartel and his wife, Singa Bui, has plenty of twists and turns, not the least of which is what happened to the huge sums of money allegedly embezzled from Cartel & Bui LLP.
But it also reveals a part of the homebuying process that's vulnerable to financial manipulation but isn't closely scrutinized, and the inadequacy of the compensation for homebuyers or sellers who do fall victim.
In interviews and again during a court hearing on Thursday, Cartel asserted he never had a role in financially managing the firm that bears his name, never had access to the trust account and maintained a separate non-real-estate practice. His wife, he said, handled all that.
Neither of them has filed any statements of defence in the lawsuits against them.
One of the plaintiffs, Anthony Ingarra, a Toronto-area mortgage agent whose family says it lost more than $310,000 in their dealings with Cartel & Biu, said the experience has shaken him.
"I'm almost afraid now to make another real estate transaction," he said. "The general public needs to know that their money isn't safe in a lawyer's trust account."
Ingarra estimates that between his own property investing, his mortgage clients, his friends and his family, Cartel & Bui LLP handled hundreds of transactions involving him over the years — all without a hitch. CBC News spoke with other real estate agents and homebuyers who said their past dealings with the firm were totally fine.
But something changed early last year. First, business clients who'd sold some assets had to wait a month just to get their proceeds out of Cartel & Bui's trust account. Then, a family selling a house in Toronto said it took two months to get most of the money — and they still haven't recovered all of it.
Both cases triggered complaints to the Law Society of Ontario about the firm. But the law society's investigators didn't take a close look at the books right away.
Then money began to go missing. Starting in September, in a half-dozen southern Ontario home sales — from Milton to Cobourg — handled by Cartel & Bui, the law firm didn't pay off the sellers' mortgages as it was supposed to do, according to lawsuits by seven homebuyers.
It took the buyers' money, paid out the home equity to its client sellers, but held on to the rest, the buyers allege.
In another case, two of the firm's clients bought Thierry Cohen-Scali's house in Toronto and the firm held back $465,000 against potential capital gains taxes — as it was required to, because Cohen-Scali lives abroad.
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