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Saskatchewan's sleazy and crooked lawyers

Darren Hagen

It is a common practice among Saskatchewan lawyers to defraud clients in the following way:

They agree with a client to file a claim on a contingency plan. Part of the plan is that the client pays the office fees which amount to two or three hundred dollars.

The lawyer then arranges a settlement with the party (police, government, employer, etc.) and receives a check. This will be a much smaller settlement than what he told the client the claim was worth. The lawyer sends the client a bill for expenses ($300 to $500.)

Often the client is in desperate financial shape and cannot pay this amount. The lawyer continues to send the bill. The client refuses to pay, telling the lawyer they haven't done anything or even ignoring the bill. If the client actually writes to the lawyer, the lawyer writes back and tells him "I can no longer represent you." The lawyer then keeps the whole check. Since the matter has not ever been before any court, the client never knows that a settlement was made.

This happened to John Melenchuk and we know it has happened to many other poor people in Saskatchewan. -- Sheila Steele

City lawyer dodges disbarment
Law society hands Hagen suspension for misappropriating clients' funds

WASKESIU, SK -- The Law Society of Saskatchewan deviated from a long held practice Wednesday when it suspended rather than disbarred a lawyer who misappropriated clients' trust fund money.

Saskatoon lawyer Darren Hagen will be allowed to resume practice after 30 months if he takes counselling and acquires organizational and time management skills, the society's disciplinary body ruled at a meeting held at this remote resort in Prince Albert National Park.

The committee decided at the same meeting to disbar another lawyer, Kenneth Wasylyshen of Yorkton.

Wasylyshen had pleaded guilty to 10 charges of conduct unbecoming a lawyer, with the upshot being the disappearance of about $150,000 of clients' money. It was his fourth conviction of conduct unbecoming a lawyer.

Hagen, 42, pleaded guilty in February to two charges unbecoming in relation to complaints he diverted tens of thousands of dollars, affecting at least seven clients and his law firm's office account between 1994 and 2000.

He also admitted improperly handling a case of a client by settling an action without the client's knowledge or consent.

The shifting of monies from one account to another was a robbing Peter to pay Paul situation that began with an initial diversion from the general office account to a client and subsequent attempts to cover that move.

The first two files have disappeared and investigators have never found evidence that Hagen took the money himself.

Hagen's explanation is that he missed the deadline to begin a lawsuit on behalf of a client.

Such a failure would have prevented his client from suing and could have led to the client suing Hagen, instead, for the lost opportunity, said Allen Snell, the law society lawyer who acted as prosecutor in the case.

"It is his (Hagen's) belief that the first file with respect to which a trust account problem arose was likely an attempt by Mr. Hagen to remedy a missed limitation period," his lawyer, Ted Priel, stated in his submission to the committee.

"All of the other trust account deficiencies would then have arisen in an attempt to meet the trust obligation created by those files," Priel stated.

All but one client was reimbursed. One has since said he thought he was entitled to more, Priel said.

Priel submitted letters from two psychologists which he said showed mitigating circumstances, but the letters were ordered confidential.

Hagen addressed the committee and apologized to his clients and members of the profession, saying "the public is out to lynch lawyers, any opportunity they have."

The day The StarPhoenix published a story revealing his wrongdoing was the most difficult of his life, he said.

"I messed up. I made mistakes and I was not man enough to deal with it," he said.

He said he had let down his family and members of his firm.

Hagen was a partner in the firm Cuelenaere, Kendall, Katzman, Watson and Hagen. He left the firm in April, pending the outcome of Wednesday's hearing. The firm has said it will have him back.

He is separated from his wife. They have two children, eight and four years old.

Priel also submitted letters of support from several Saskatoon lawyers and some clients.

Prior to Hagen, there were 14 Saskatchewan lawyers convicted of misappropriation in the last 25 or 30 years, Snell said.

Twelve of those lawyers were disbarred, one was allowed to resign in the face of discipline and one gave an undertaking not to practise law anymore.

There were five other cases of lawyers who had committed comparable transgressions, but they were not designated "misappropriation," said Priel. Those lawyers faces lesser disciplinary action.

Misappropriation convictions normally attract disbarment throughout Canada, the United States and the British Commonwealth, Snell said.

He argued the law society should not tolerate Hagen's dishonesty, saying it was more important the society uphold the honour and integrity of the profession as a whole, than continue the practice of one individual.

While there is no evidence Hagen pocketed the missing money, it was certainly done for his benefit, Snell said.

The discipline committee considered the breach as "extremely serious" said chair Lana Krogan but it concluded "that the public interest is best protected," through its order because, "it provides certainty as to the time that must pass before he may return to practice and the conditions under which he may return."

Hagen is required to prove to the committee chair that he has taken the organizational training; on his return to practice, he will not have signing authority or direct control over trust accounts until he applies to and is given permission by senior members of the law society; must practice with at least one other law society member who is not restricted; must pay law society costs of $8,822 when he returns and must allow his doctors to report directly to the law society.

The Wasylyshen outcome was a foregone conclusion: His lawyer Orest Rosowsky, asked only that his client be allowed to resign rather than be subjected to the indignity of disbarment.

Wasylyshen, who addressed the committee by telephone, said the situation is embarrassing and humiliating.

"It's a funeral of sorts," he told the committee.

Kenneth Wayne Wasylyshen's appeal falls short

REGINA (SNN) -- A disbarred Yorkton lawyer won't get a break on his jail term. On Thursday, the Saskatchewan Court of Appeal dismissed Kenneth Wayne Wasylyshen's appeal of his 15-month sentence for fraud.

"This sentence is well within the range of permissible sentences," Justice Marjorie Gerwing said. Justices Gary Lane and Robert Richards made the decision unanimous.

Wasylyshen previously submitted written material to the court and was not personally present for the appeal, which was quickly dismissed without hearing any oral arguments.

Wasylyshen was sentenced on Oct. 27 in Lloydminster provincial court after he was convicted of fraud exceeding $5,000. The judge found he had defrauded the Alberta Workers' Compensation Board and an individual of $52,000 between June 27, 2001 and Nov. 13, 2002. The fraud occurred when he accepted the settlement of a lawsuit and did not disburse the funds to either Alberta WCB or the individual.

In his appeal, Wasylyshen argued for a sentence of six to 12 months.

The appeal's failure was just one more setback for the lawyer.

In September, a judge ordered him to pay back some of the more than $600,000 he had not paid to the Canada Customs and Revenue Agency.