Craig Kiyokata Iwata

Findings — machine-extracted (anthropic-batch:claude-opus-4-8); verify against the decision

Agreed Statement of Facts in which two former partners of Martin & Associates (Vancouver) admitted to repeatedly withdrawing client trust funds without authorization between September 2001 and May 2003. The scheme involved transferring trust funds to the general account each morning to reduce the Firm's line of credit and induce its bank to keep extending credit, then replenishing the trust account later in the day. The amounts grew from $1,000 to over $100,000 per occurrence (47 occasions). Mr. Iwata admitted misappropriation and professional misconduct (Rule 3-56), failing to immediately eliminate trust shortages (26 occasions, Rule 3-66(1)), and failing to immediately report shortages over $2,500 (17 occasions, Rule 3-66(2)). Numerous reports to the Law Society contained erroneous statements that 'the bank was not overdrawn.' No clients lost money. The provided text contains no sanction determination and no express tribunal finding of dishonesty.

Duties found breached:

• Uphold public trust in the profession
• No improper use of client money
• Self-report to the regulator
• Report serious misconduct of others

Aggravating factors:

• Repeated and escalating conduct over a sustained period (September 2001 to May 2003)
• Amounts grew from $1,000 to in excess of $100,000 per occurrence
• Deliberate scheme using daily trust-to-general transfers to deceive the bank about line of credit indebtedness
• Repeated false/erroneous statements to the Law Society despite repeated reminders of the Rules
• Client trust funds were at risk of being seized by the bank

Mitigating factors:

• No client of the Firm lost any money
• Funds were repaid (replenished) on each occasion later the same day or the following day
• Admissions made through Agreed Statement of Facts
• Mr. Martin resigned and Mr. Iwata gave an undertaking to refrain from practice; consented to appointment of a custodian