A recent ruling highlights the importance of recognizing fraud and taking swift action when a law firm found it had fallen victim. Ottawa firm McGuinty Law Offices was assisting with four real esate transactions valued at nearly $1 million when they discovered that the money was fraudulently diverted through wire transfer before the closing dates to accounts not controlled by the clients, due to a breach in the law firm’s email system. Once the fraud was discovered and reported, the bank was able to put a freeze on the account. McGuinty Law Office will subsequently be reimbursed following a Supreme Court decision in their favour.
In McGuinty Law Offices Professional Corporation v. 13819850 Canada Inc., 2023 ONSC 1880 (CanLII), Superior Court Justice Jaye Hooper noted that “The Court does not have to determine if the respondents were part of the fraudulent scheme or not. All that has to be demonstrated is that an error was made and funds were paid into the respondents’ bank accounts that should not have been deposited … I find that McGuinty Law paid the money under a mistake of fact.”
You can read more here: McGuinty law firm will get back frozen funds mistakenly sent to alleged fraudsters, court rules (March 24, 2023)
LIANSwers v80, March 2023