Vernon lawyer who 'misappropriated' funds gets suspended

A Vernon lawyer who allowed clients to use his trust account so they could avoid paying their debtors has been suspended for five months. According to May 10 Law Society of BC consent agreement, lawyer M. Shane Dugas admitted to a wealth of professional misconduct violations dating back to 2014. The lawyer, who set up Dugas Law in 2011, admitted he'd "misappropriated or improperly handled funds" by paying clients money directly into his personal account instead of the firm's trust account. In one instance he returned an "insufficient amount of trust funds to a client." The legal regulator says that Dugas failed to report shortages in his trust account and his accounting records were out of compliance between 2016 and 2023. He also told the Law Society he'd filled GST and PST, employee payroll source deductions when he knew this was not true. The decision says in October 2022 he owed almost $100,000 in GST and PST arrears. "The Lawyer attributed his misrepresentations to extreme stress and anxiety in his law practice and in general life," the decision reads. The decision lists more than a dozen violations which Dugas admitted to. In one instance in 2019, Dugas allowed a client to pay a $230,000 estate settlement payout into his trust account although he wasn't representing the client in the matter. He then took $29,000 of the payout to cover the client's legal fees owed to him and transferred the money at the client's direction to complete a property development project. The move concealed the money from the client's unpaid creditors. "The Lawyer knew that (the client) did not have a bank account and that the settlement funds could have been seized if they were deposited with a bank," the Law Society said in the decision. Dugas also did a similar thing for another client more for than three years. The regulator says he put $1.35 million through his trust account for a client's company without providing legal services. "At the time the lawyer received the... funds, he knew that (the) company's... bank accounts were frozen because of foreclosure proceedings," the decision reads. The company had defaulted on a $3.2 million loan from the bank. Dugas became registered in New Brunswick in 1994 and moved to Vernon in 2008. He's been in trouble with the regulator before and in 2013 had a conduct review for taking funds from a trust for legal fees before issuing the bill. In 2016, the Law Society's Practice Standards Committee made recommendations regarding his office systems. Dugas' suspension began June 1 and a message on the company's website reads: "We regret to inform you that our business is temporarily closed until November 1, 2024.  We apologize for any inconvenience this may cause and appreciate your understanding and support during this time." The message makes no mention of his suspension. To contact a reporter for this story, email Ben Bulmer mailto:bbulmer@infonews.ca  or call (250) 309-5230 or email the editor mailto:news@infonews.ca . You can also submit photos, videos or news tips to the newsroom mailto:tips@infonews.ca  and be entered to win a monthly prize draw. We welcome your comments and opinions on our stories but play nice. We won't censor or delete comments unless they contain off-topic statements or links, unnecessary vulgarity, false facts, spam or obviously fake profiles. If you have any concerns about what you see in comments, email the editor in the link above. SUBSCRIBE to our awesome newsletter here https://infotel.ca/newsletter .