Lawyer charged with mishandling funds
Douglas Jack Keshen faces allegations concerning more than $100K in settlements for abuse victims
A Kenora, Ont., lawyer is facing professional misconduct charges over alleged mishandling of settlement funds for more than a dozen residential school survivors.
The Law Society of Upper Canada’s allegations against Douglas Jack Keshen, who has been retained for decades to represent First Nations, concern more than $100,000 of settlement money paid out to at least17 victims of sexual, physical and emotional abuse at residential schools.
“It’s disappointing — a betrayal. He’s one guy we knew all our time here as a band lawyer. We were familiar with him,” said Fred Thomas, 66, a member of the Lac Seul First Nation, who alleges he is one of Keshen’s victims. “I felt re-victimized, that I shouldn’t trust anyone else.”
“It’s disappointing — a betrayal . . . I felt re-victimized, that I shouldn’t trust anyone else.” FRED THOMAS A MEMBER OF THE LAC SEUL FIRST NATION
Keshen’s lawyer, Daniel Naymark, said his client will defend against the misconduct allegations. He described Keshen as a “respected lawyer” who “has devoted his nearly 40year career to working with First Nations in northwestern Ontario.”
“He is one of the few lawyers championing the interests of these vulnerable under-represented communities,” Naymark said, adding that the law society “has not alleged that Mr. Keshen acted in bad faith or attempted to take advantage of his clients.”
None of the allegations against Keshen outlined in the Torontobased law society’s notice of application have been proven. They include:
Transferring roughly $45,000 of their settlement funds of 17 clients from his trust account to the firm’s general account “without any legal entitlement to the monies.”
Transferring more than $21,000 of settlement funds from three separate clients to himself to pay legal fees which “were neither fair nor reasonable.”
Making personal advances to 17 clients and facilitating high-interest loans to nine clients against anticipated settlement funds, in violation of the Indian Residential School Agreement.
Keshen is also accused of failing to conduct proper interviews with clients or review their applications for compensation. In a case involving a “vulnerable client,” he is accused of transferring nearly $120,000 from a settlement fund to individuals appointed under power of attorney “when it was apparent that all of the monies transferred were not for the benefit of (the client).” Keshen is alleged to have prepared power of attorney documents for the client “without ensuring that (the client) was capable,” the law society claims.
The law society allegations are based on an investigation by the regulator. Cases are typically decided following a public proceeding before a law society disciplinary tribunal.
Keshen was investigated last year by the Indian Residential Schools Adjudication Secretariat, local media reported. That followed complaints from four clients to the secretariat, which was created to manage the distribution of settlement funds won in 2005 in a major class-action lawsuit against the Canadian government.
The probe was later transferred to the court monitor, which is overseeing implementation of the settlement and did not respond to questions from the Star on Tuesday. The court monitor has yet to release its report on the matter, Naymark said.
When news of the secretariat’s investigation surfaced last year, Keshen told the CBC that he did not receive any financial benefit for negotiating loans for his clients and that he provided advances on monies he anticipated they would get through their claims.
“I believed that this would ease their stress and anger and frustration at the process, for having to wait so long for their award of compensation,” he said, adding he was “unaware” of any rules prohibiting the activity.
In September, Lac Seul First Nation’s continued affiliation with Keshen’s firm, despite the Indian Residential Schools Adjudication Secretariat’s probe, prompted band member Garnet Angeconeb, an advocate for fellow residential school survivors, to launch a hunger strike. Angeconeb, who is not among Keshen’s alleged victims, ended the hunger strike after five days. He says the chief agreed to sever the band’s ties with Keshen but continued its relationship with the lawyer’s firm, Keshen & Major.
“I would like, very simply, to see justice being done,” said Angeconeb, 59.
Keshen, who was called to the bar in 1978, is the latest in a series of lawyers to face allegations regarding the mishandling of settlement funds owed to residential school survivors. Last year in Calgary, lawyer David Blott was disbarred for mishandling residential school claims.
In 2012, Winnipeg lawyer Howard Lorne Tennenhouse lost his licence for taking more than $950,000 from dozens of residential school survivors.
The law society’s allegations against Keshen were addressed in a brief proceeding in Toronto on Tuesday. The next step is a pre-hearing conference, which will take place behind closed doors in early August. With files from Metro News Rachel Mendleson can be reached at 416-869-4059, rmendleson@thestar.ca.