A former Vancouver lawyer pleaded guilty Friday to fraud and forgery in one of the largest fraudulent real estate transaction cases in B.C. history, totalling nearly $40 million.
Martin Wirick, 54, will be sentenced next Tuesday, and the Crown is seeking a seven-year jail sentence.
The 107 fraudulent real estate transactions between 2000 and 2002 involved Wirick and his client, Tarsem Singh Gill, a former Vancouver real estate developer.
Their scheme came to light in May 2002. Wirick, who had practised law for more than 20 years, then admitted to the Law Society of B.C. that he had misappropriated trust funds in real estate transactions by failing to pay out and discharge mortgages. Instead, he had applied the funds to other purposes, in breach of his undertakings.
Wirick was disbarred in December 2002 and had declared bankruptcy, listing contingent liabilities of about $52 million, according to the Law Society's website.
Last August, Wirick and Gill were charged with two counts of fraud and theft. Wirick was also charged with uttering forged documents and Gill with possession of stolen property.
On Friday, Wirick pleaded guilty to his role in the scheme, saying he forged mortgage documents and filed the legal paperwork for the homebuyers he knew had no intention of living in the properties, court heard.
He then flipped the properties and, instead of using that money to pay the initial mortgages, he left them open.
The Crown alleged the cash was funnelled back to Gill to fund new construction projects as part of a pyramid scheme in which new mortgages would be used to pay down old mortgages. The trial for Gill has not begun.
The Law Society offered to pay for Wirick's transgressions by dipping into its special compensation fund designed to compensate victims who lost money through a member lawyer's misappropriation.
Annual fees for the fund were raised from $250 to $600 for every lawyer in the province. To date, the fund has paid out more than $38 million to the scammed homeowners.
"Each lawyer in the province had to pay an additional $350 per year for the last five years to put in funds to be able to do what we did," Stuart Cameron, the society's director of discipline, told CBC News on Friday.
"I hope, by virtue of what we've done, we've restored the public trust in our institution."
Since the scam was exposed, contracts and rules surrounding the purchase of a home have been tightened, said Ron Usher, a member of the Law Society.
"Lawyers needed to demonstrate to each other in a very transparent way — 'What did you do with the money?'" he said.