Well-known Winnipeg immigration lawyer Paul Hesse has been removed as a partner from the firm where he worked after allegations surfaced he suggested to clients investing in businesses could improve their chances of gaining Canadian citizenship.

"We feel betrayed, we feel terrible for the clients," said Benjamin Hecht, a managing partner at Pitblado Law who relieved Hesse of his duties on June 7.

Hesse, a former president of the Manitoba Liberal Party, joined the law firm in August 2011 and became a partner in January 2014.

According to sources, Hesse allegedly insinuated to clients, most of whom were from China, that by making business investments in Canada, they could strengthen their immigration cases.

Hecht said it appears Hesse began funnelling funds into businesses involving his former partner, Patrick Maxwell.

"His former romantic partner was a shareholder or director in many of the companies that got money," Hecht said.

None of the allegations have been proven in court. CBC News had made multiple attempts to reach Hesse and Maxwell for comment.

The Winnipeg Free Press reported Friday that Hesse claimed there were "'multiple inaccuracies' in the description given of the situation," but could not comment any further due to prior commitments.

Maxwell was the owner of a now-defunct dog grooming and daycare called White Lotus Pet Spa, but in late June the business abruptly shut its doors.

Benjamin Hecht, a managing partner at Pitblado Law said in his 32 years of practising law, he's never seen anything the like of what Paul Hesse allegedly did. (Submitted by Pitblado Law )

Hesse was allegedly moving money into a series of businesses owned by Maxwell, as well as other numbered businesses, according to Hecht.

It's not clear how much money clients have lost, nor where it has all gone, Hecht said.

After an accountant at the law firm flagged Hesse's transactions to Hecht, he slowly began putting the pieces together.

"I brought him in to meet with my executive [team] on June the 7th and I immediately reported what I found there to our regulator [at] the Law Society of Manitoba," he said.

The revelations came as a shock to Hecht, who has worked as a lawyer for 32 years and oversees operations at Pitblado.

"[I've] never seen anything remotely like it, it's not even close," he said.

Following the meeting with the executives, Hesse's company laptop was seized and he was removed from the firm.

The firm then contacted the Law Society of Manitoba. The regulator confirmed Saturday it has since launched a formal investigation.

Paul Hesse speaks about the Rapid Transit coming to Winnipeg in 2011. (CBC)

After getting in touch with the Law Society, the firm began contacting Hesse's clients to see how many had been impacted, and to begin the process in helping them find lawyers who could help them in their situation.

"We're doing all we can within the confines of what we're permitted to by Law Society professional code of conduct to help these people get the help that they need," he said.

For the time being, Hecht is recommending clients contact either new counsel or the Law Society.

"Because of the conflict, we are prohibited from providing ongoing legal representation to these people, they have to go outside of my firm," he said.

The firm has hired chartered accounting firm MNP to review the financial record and try to get a paper trail of the money put forward by clients.

While Hesse is no longer employed at Pitblado, chief executive officer of the Law Society of Manitoba, Kristin Dangerfield, said he is still eligible to practise law in Manitoba.

Dangerfield added the Law Society does have the power to suspend him if it's in the public's best interest, and that the investigation will take time due to the complexity of the allegations.

