Toronto lawyer couple sentenced to jail for contempt over millions in missing homebuyer funds

A Toronto lawyer couple have been sentenced to jail for contempt of court after months of failing to obey orders to provide records and information about millions in funds missing from their firm’s trust account.

Husband and wife Nicholas Cartel and Singa Bui were ordered Friday to serve 30 days in provincial custody.

It’s rare, but not unprecedented, for lawyers to be jailed for contempt, and usually only happens in the most extreme cases, legal experts previously told CBC News.

Cartel’s sentence is effective immediately. He was handcuffed by a court officer and taken out of a Toronto courtroom just after 2:30 p.m.

Bui will serve her sentence immediately after Cartel, starting on Nov. 26.

The couple and their law firm, Cartel & Bui LLP, were sued by 25 homebuyers and sellers after more than $6.5 million of their money was embezzled from the firm’s trust account, mostly between April and December 2023. Many of those plaintiffs have already obtained default judgments. 

The judge said he would not simply order fines for the contempt given that the two lawyers already owe millions of dollars to the plaintiffs.

‘No remorse,’ judge says

As part of the lawsuits, various judges, going back to January, had ordered Cartel and Bui to make full disclosures of their and their firm’s finances and to answer questions about where the missing money went.

But in findings released in late August, Superior Court Justice William Chalmers ruled that while the couple “must know what happened to the funds, they have refused to provide this information.” He said Cartel and Bui “have taken active steps to hide their finances and to frustrate the court.”

In his sentencing ruling read aloud Friday afternoon, Chalmers said that “Mr. Cartel and Ms. Bui have not shown remorse for their conduct.”

“The defendants continue to ignore court orders and make misrepresentations to the court,” he said.

He also outlined aggravating factors such as the fact both defendants are experienced lawyers and are therefore highly familiar with the court system and the importance of complying with court orders.

Moreover, Bui’s travel history — now available after she finally surrendered her passport — shows that she flew to Zurich, Switzerland, and Milan, Italy, the same month the bulk of the funds went missing, the judge noted.

Bui also flew to Portugal in late September and returned in October, court heard — four months after Justice Chalmers ordered her to surrender her passport so that she wouldn’t leave the court’s jurisdiction.

Bui quiet during hearing 

Andrew Wray, Bui’s newly-hired lawyer, submitted that the trip was at the expense of Bui’s friend, who was concerned about her mental health and took her to Portugal to “let her sleep.”

“She was apparently able to travel to Portugal but unable to … comply with the court orders,” Chalmers said in his ruling.

Chalmers accepted that while the surrender of both Cartel’s and Bui’s passports is a mitigating factor, many court orders to hand over materials have gone unfulfilled.

Throughout the hearing, Bui remained quiet and generally kept her gaze down, working her way through a box of Kleenex but refusing water from her lawyer.

Cartel, meanwhile, remained self-represented and submitted nearly 400 pages of documents just hours before the hearing. The judge did not admit the documents as evidence and called it “further evidence of his contemptuous behaviour.”

Cartel’s only question to the judge before being handcuffed was whether he would have access to a laptop while in custody so he could continue to work on his case, or whether he would have to give instructions to others while jailed. The judge told Cartel he would have to “figure it out.”

Wray did not respond when asked to comment on Bui’s behalf outside the courthouse.

Law society suspension, police investigation

Both lawyers were provisionally suspended by the Law Society of Ontario in April while it investigates the case further. Toronto police’s fraud squad is also investigating.

While Cartel has acknowledged he’s financially liable to the plaintiffs who have sued because he was a partner in the now-defunct law firm, he has consistently denied responsibility for the embezzlement, laying the blame on his wife.

In December, Bui said through a lawyer, in a letter to the Law Society of Ontario, that Cartel was “not responsible for the improper transferring of trust funds, nor is any other associate or employee of the firm.”

Bui is scheduled to return to court on Nov. 18, about a week before she will have to serve her sentence. If she complies with the outstanding court orders and clears her contempt, she could ask to have her sentence reduced, and she can also apply to serve it in a psychiatric facility while obtaining treatment, according to Friday’s ruling.

Likewise, if Cartel clears his contempt while in custody, he can also apply to have the sentence reduced.

Trung Nguyen, the plaintiff lawyer who petitioned the court to find the couple in contempt, declined to comment on behalf of his clients.

Meanwhile, four victims who attended the hearing told CBC News they still have not had their funds returned by Cartel and Bui.

‘Light at the end of the tunnel’

Anthony Ingarra, one of the plaintiffs suing Cartel and Bui, said that while “we’re not even close” to getting the missing money back or knowing where it is, he now sees “a light at the end of the tunnel.”

“I really saw Justice Chalmers let them know, ‘You’re not pulling the wool over my eyes. I see what you guys did,'” Ingarra said after the sentencing, adding that he thought the 30 days of jail time was “good” and “pretty heavy.”

He stressed, however, that he remains unsatisfied.

“They’re still hiding [the money], and the fact that Singa’s essentially been traveling around the world while this is going on makes me sick to my stomach,” he said.