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The watchdog was “under pressure,” he maintained, to show it has procedures in place to regulate its members following a 2015 Supreme Court of Canada decision that exempted lawyers from some financial tracking laws.

“In short, through the disciplinary process, the LSBC seeks to advance policy objectives at my client’s expense,” Jaffe complained.

“While seeking to convince the public that it takes money laundering seriously, it has chosen to not apply its resources against lawyers who are actually engaged in that activity.”

The panel criticized Gurney for being evasive and ignoring “a sea of red flags” in four questionable transactions that saw $25,845,489.87 flow through his professional trust account between May and November 2013. He reputedly took a tenth of one per cent as a fee.

It found he made no inquiries regarding who the lenders were, the source of the funds or the client’s use of the money and concluded he had shown “a gross culpable neglect to his duties to make reasonable inquiries.”

Photo by Junial Enterprises - Fotolia / Postmedia News files

The panel said a lawyer cannot delegate the duty to inquire or rely upon a client’s assurances as to the legitimacy of the transaction, Jaffe noted.

The suspicious transactions — involving funds from Nevis, Marshall Islands and Belize — surfaced during a compliance audit, a regular check of a law firm’s books conducted by the society roughly every six years.

Painting Gurney as a scapegoat, Jaffe said the society had made public no information or evidence to indicate it had applied its regulatory efforts to any real-estate transactions involving offshore parties or how it was policing lawyers handling foreign investment.