LAW SOCIETY TRIBUNAL

HEARING DIVISION

Date: June 9, 2026 Tribunal File No.: 26H-085

BETWEEN:

Law Society of Ontario Applicant

• and -

Paul Steve Druxerman Respondent

Before: Kathleen Lickers (chair), Ingrid Berkeley, Mark Surchin Heard: May 19, 2026, by videoconference

Appearances: Megan Phyper, for the applicant Respondent, self-represented

Summary: DRUXERMAN – Motion for Interlocutory Suspension or Practice Restriction – The Law Society received complaints that the Lawyer misappropriated trust funds and sought a suspension or restriction of the Lawyer’s licence – The Lawyer consented to the proposed order while expressly stating that his consent did not constitute an admission of the allegations – The panel found reasonable grounds to believe that there is a significant risk of harm to members of the public if the Lawyer was permitted to continue to practise law – The Lawyer’s licence was suspended on an interlocutory basis.

REASONS FOR DECISION ON A MOTION FOR INTERLOCUTORY SUSPENSION OR LICENCE RESTRICTIONS

1Kathleen Lickers (for the panel):– The Law Society of Ontario brought a motion under s 49.27(1) of the Law Society Act, RSO 1990, c L.8 (the Act), for an interlocutory suspension of, or restrictions on, Paul Steve Druxerman’s licence to practise law. The Law Society submits that there are reasonable grounds to believe that there is a significant risk of harm to members of the public, or to the public interest in the administration of justice, if the interlocutory order is not made, and that making the order is likely to reduce the risk.

2The Law Society is conducting investigations into the respondent’s conduct regarding allegations that he may have:

• misappropriated and/or misapplied trust monies or monies imposed with a trust;

• knowingly participated in, facilitated or otherwise failed to prevent dishonesty, fraud, crime or illegal conduct;

• misled counsel and clients;

• failed to assume complete professional responsibility for his law practice; and

• abandoned his law practice.

3The Law Society relies upon the affidavit evidence of a forensic auditor and supporting documents at the hearing of the motion. The respondent did not challenge this evidence at the motion.

4The respondent did not file responding materials with the Law Society or the Tribunal; but he attended the motion hearing to consent to the interlocutory order, without restrictions, while expressly stating that his consent did not constitute an admission of the allegations advanced by the Law Society.

5Having reviewed the Law Society’s motion record and heard the respondent’s consent, we are satisfied that there are reasonable grounds to believe there is a serious risk to members of the public if the order is not granted. We granted the Law Society’s motion and ordered the interlocutory suspension of the respondent’s licence to practise law, effective immediately.

6These are our reasons.

THE TEST FOR AN INTERLOCUTORY SUSPENSION

7Section 49.27(1) of the Act authorizes the Hearing Division to make an interlocutory order suspending a lawyer’s licence or restricting the manner in which the lawyer may practise law.

8Section 49.27 states:

49.27 (1) The Hearing Division may make an interlocutory order authorized by the rules of practice and procedure, subject to subsection (2).

(2) The Hearing Division shall not make an interlocutory order suspending a licensee’s licence or restricting the manner in which a licensee may practise law or provide legal services, unless there are reasonable grounds for believing that there is a significant risk of harm to members of the public, or to the public interest in the administration of justice, if the order is not made and that making the order is likely to reduce the risk.

9Rule 12 of the Tribunal’s Rules of Practice and Procedure authorizes the Hearing Division to make an interlocutory order suspending a licensee’s licence or restricting the manner in which the licensee may practise law.

10In deciding this motion, we must consider whether there are reasonable grounds for believing that there is a significant risk of harm to members of the public or to the public interest in the administration of justice and what order, if any, should be made if that is the case.

THE EVIDENCE

11The respondent was called to the bar in Ontario in 2003 and is 58 years old. He reports to the Law Society that he is a sole practitioner in the areas of civil litigation and criminal law.

12The Law Society relies entirely upon the affidavit of Allane Andrusko, a forensic auditor with the Law Society, in support of its motion. The respondent did not challenge this affidavit.

13The Law Society received four complaints alleging that the respondent misappropriated trust funds; knowingly participated in, facilitated, or failed to prevent mortgage fraud; misled parties in mortgage transactions; and failed to take responsibility for, and/or abandoned, his practice.

14Investigations into each of these complaints are ongoing.

Complaint from AA

15On February 22, 2026, AA filed a complaint advising that, while living abroad, his home in Milton, Ontario had been transferred to an unknown person and a mortgage had been placed on the property without his knowledge or consent. It is alleged that the respondent notarized a document on August 18, 2025, purporting to be a gift deed transferring AA’s home to an individual named Mr. Vgenopoulos.

16The deed states that the transferors are family friends of Mr. Vgenopoulos and they wish to transfer their ownership interest in the property as a gift, without consideration. AA does not know Mr. Vgenopoulos and denies ever signing the deed or transferring his home.

17In September 2025, the respondent purported to represent AA and his wife in respect of the transfer of the home property to Mr. Vgenopoulos. The property was transferred to Mr. Vgenopoulos for $2. The respondent registered the transfer.

18After this purported transfer, the respondent then represented Mr. Vgenopoulos on a private mortgage transaction in respect of AA’s home property. On November 7, 2025, counsel for the private lenders wired $682,986.74 into the respondent’s trust account, and a mortgage was registered on title in the amount of $725,000. On the same day, the lenders transferred funds to a Mr. Gulati for a “finder’s fee”. Mr. Gulati is a former mortgage agent whose licence expired on March 31, 2024. He is someone who will appear in many of the transactions under investigation.

19Prior to the mortgage transaction, the private lenders obtained an appraisal of AA’s home property, valuing it at $1,172,000. Mr. Gulati scheduled and attended the appraiser’s visit to the property. It is unclear how Mr. Gulati obtained access to the property.

20The lenders obtained title insurance through FCT Insurance Company Inc., which initiated its own investigation and communicated by email with Kulwinder Gill, who purported to be a law clerk at the respondent’s firm. Mr. Gill stated that Mr. Vgenopoulos was connected with AA through Mr. Gulati; however, the law firm had stopped accepting referrals from Mr. Gulati, who was described as a “serial fraudster.” Mr. Gill also stated that Mr. Vgenopoulos would pay out the mortgage as soon as possible and transfer the house to the “rightful owner.” The respondent was copied on this email correspondence. Mr. Gill’s role in this transaction remains unclear. The Law Society investigator was unable to contact Mr. Gill by telephone, and his email account had been deactivated.

Complaint of the Law Society

21On March 20, 2026, the Law Society initiated its own complaint after speaking with Mr. King, an investigator retained by three title insurers to investigate 15 mortgages that were discharged by the respondent between July and September 2025. The mortgages were never paid out, and it is unclear what happened to the funds deposited into the respondent’s trust account to pay them out.

22The respondent has refused to provide any documents or discuss these transactions, and the Law Society has not been able to trace the respondent’s trust funds.

23On January 8, 2026, Mr. King spoke with the respondent, who confirmed that he started working for Mr. Gulati in June 2025.

24The Law Society’s complaint involves five properties:

• T Drive, Oshawa;

• GV Avenue, Courtice;

• E Street, Markham;

• D Road, Milton; and

• H Street, Cambridge.

T Drive property

25On October 8, 2021, the owner of the T Drive property obtained a loan, secured by a mortgage, from Promila and Harbans Lal Ghai in the amount of $500,000. On March 22, 2022, the same lenders registered a second mortgage for $100,000 on the property.

26On September 22, 2025, the respondent registered discharges of both mortgages. A payout statement for the first mortgage is purportedly signed by Ms. Ghai. On December 8, 2025, Ms. Ghai received the mortgage payout statement and advised that it was fraudulent. She says she never signed the payout statement, and she did not receive funds upon the discharge of the mortgage.

GV Avenue property

27On April 28, 2022, Ms. R purchased the GV Avenue property for $645,000. On the same date, two mortgages were registered on title. The first mortgage was for $483,750 in favour of a numbered company and the second was for $230,000 in favour of four lenders.

28On July 24, 2025, the second mortgage was discharged by the respondent. It is unclear if the funds were paid to the lenders.

29On September 22, 2025, a new second mortgage was registered on the property by a different lawyer. The following day, the respondent discharged the first mortgage. The owner of the lending company says that he did not sign the mortgage payout statement or receive funds from the respondent’s discharge of the mortgage.

E Street property

30On April 20, 2022, a $1.5 million first mortgage was registered on title to the E Street property in favour of four lenders, including Mr. Gulati. On the same date, Mr. Gulati registered a second mortgage in the amount of $285,000 in favour of two of his companies. On November 7, 2023, a third mortgage was registered for $245,000 in favour of one of the companies owned by Mr. Gulati.

31In July 2025, the respondent discharged the three mortgages registered against the E Street property. The respondent had acknowledgements and directions to discharge signed by the lenders. Mr. Gulati signed directions for two of the three mortgages, and a Mr. Dhatt purportedly signed one direction for the first mortgage.

32On July 15, 2025, a new first mortgage was registered on title, and $1,000,548.08 was deposited into the respondent’s trust account. Mr. Dhatt allegedly signed letters of direction requesting that $350,941.68 be paid to Hellas Construction (a company owned by Mr. Vgenopoulos), $100,000 to Mehmet Akar, $350,941.68 to 15254388 Canada Inc., and $99,359.80 to Mr. Gulati.

33The respondent obtained mortgage payout statements for the first and second mortgages purportedly signed by the lenders. On November 6, 2025, a lawyer representing three of the four lenders of the first mortgage advised that his clients did not authorize the discharge of the first mortgage and they did not receive any funds. Mr. Dhatt denies signing the mortgage payout statement.

D Road property

34On July 7, 2021, the owners of the D Road property granted a first mortgage for $1.05 million in favour of Promila Ghai and Gina Domenici. On January 20, 2022, four lenders placed a second mortgage on title for $450,000. Two of the four lenders on the second mortgage are related to Mr. Gulati.

35On June 22, 2023, the D Road property was transferred to a company owned by Mr. Gulati and it assumed the mortgages for $1,663,500 and a further $35,500 which was paid in cash.

36On July 24, 2025, the respondent discharged the second mortgage. The Law Society does not have a copy of the mortgage payout statement and it is unclear if the lenders received any funds upon discharge.

H Street property

37On September 7, 2022, a couple purchased the H Street property and granted two mortgages, the first in favour of Mr. Dhatt and another lender, and the second in favour of four lenders, one of which is a company owned by Mr. Gulati. In 2024 the property was transferred to a numbered company.

38On July 24, 2025, the second mortgage was discharged. The Law Society does not have a copy of the mortgage payout statement and it is unclear if the lenders received any funds upon discharge.

Complaint of AR

39On March 25, 2026, AR filed a complaint alleging that the respondent failed to pay out and discharge two mortgages. AR represented the new lenders on a refinancing transaction.

40In December 2025, the owner of a property in King City sought to refinance through a new first mortgage for $910,000. The owner planned to use the new mortgage to discharge his existing mortgage with RBC and existing second mortgage with Secure Capital MIC. The respondent represented the owner/borrower. The complainant, AR, represented the new mortgage lenders.

41On December 18, 2025, the respondent provided AR with an undertaking to discharge the RBC and Secure Capital mortgages “upon closing the refinancing of the Property.” On December 22, 2025, AR registered the new first mortgage. The respondent obtained the payout statement from RBC and Secure Capital.

42AR deposited a cheque from the new lenders in the amount of $877,117.43 into the respondent’s trust account. The borrower appears to have wired $221,045 to the respondent to cover a shortfall with regard to mortgage payments that were owed.

43In February 2026, AR emailed Mr. Gill at the respondent’s office asking why the mortgage had not been discharged. Mr. Gill claimed there was an accounting error and the discharge would be provided in five days. On March 23, 2026, Mr. Gill said all funds would be paid out by the end of day and the mortgages discharged. He has not communicated since.

44A representative from Secure Capital tried to contact the respondent to ask why the funds had not been received, and was told that the respondent had retired.

Complaint of SC

45On March 26, 2026, SC filed a complaint alleging the respondent had misappropriated or misapplied trust funds, misled the lenders on a mortgage transaction, and had facilitated or otherwise failed to prevent fraud.

46In December 2025, the respondent represented the owners of a property in King City in a refinancing transaction. SC is an employee of one of the lenders, a professional corporation representing four lenders on a new mortgage in the amount of $1.2 million.

47On December 1, 2025, the respondent signed undertakings to (i) pay out and discharge the existing first mortgage with HSBC Bank of Canada and (ii) satisfy an RBC line of credit debt in the amount of $148,116.

48On December 15, 2025, the lenders wired $1,108,663.51 to the respondent’s trust account. On the same date, the new mortgage was registered on title. The HSBC mortgage was not paid out or discharged, and it remains on title.

49SC asked the respondent for a copy of the registered discharge and proof of payment. The respondent did not provide any documents. SC then contacted the homeowners, who said that the respondent told them that the deal had fallen through and the refinancing would not proceed. The homeowners continued to pay the original mortgage.

50The respondent’s office paid four months of interest to the lenders. These payments were made from the respondent’s trust account. The respondent also paid Mr. Gulati a $49,725 “consultant’s fees” for this transaction; it is unclear what role he played in the refinancing.

51The respondent has not responded to calls or emails from SC regarding the transaction.

52It is the Law Society’s evidence that the respondent has failed to respond to its investigations and/or has abandoned his practice by relocating to British Columbia.

ANALYSIS

53The question on this motion is whether there are reasonable grounds to believe that there is a significant risk of harm both to members of the public or to the public interest in the administration of justice if an interlocutory suspension is not made and whether making the order is likely to reduce that risk.

54The Law Society submits that the evidence is compelling and credible and establishes reasonable grounds to believe that the respondent has engaged in conduct that shows a lack of integrity. The Law Society submits that there is strong evidence of:

• Misappropriation of trust funds by the respondent on multiple occasions between June and September 2025.

• Misappropriation of over $2 million in funds received by the respondent from borrowers and lenders in the refinancing of real estate transactions in December 2025.

• Conduct by the respondent that misled counsel, clients, and lenders, including purportedly obtaining mortgage payout statements and signing undertakings but failing to pay out and discharge mortgages. In one complaint, a client was informed by the respondent’s office that the refinancing transaction had fallen through. This was not true, and the lender had wired funds to the respondent’s trust account.

• Conduct indicating that the respondent participated in, facilitated, or failed to prevent mortgage fraud. There are multiple transactions in which the respondent is alleged to have participated in a scheme whereby a property was transferred from the lawful owners to a nominee, who then placed a private mortgage on the property. The mortgage funds were then disbursed to participants in the scheme. The respondent is alleged to have acted for the transferors and then for the transferees.

55The respondent has not provided his financial records to the Law Society to allow it to trace his trust funds, contrary to his obligations under By-Law 9. Millions of dollars remain unaccounted for.

56The Law Society submits that its compelling and credible evidence raises serious concerns about the respondent’s integrity and trustworthiness. In similar cases where the evidence raised issues about a licensee’s trustworthiness and integrity, the Tribunal held that a suspension was necessary to protect the public and maintain public confidence in the administration of justice: Law Society of Ontario v Dabaja, 2025 ONLSTH 124 at paras 46-48, and Law Society of Ontario v Conroy, 2025 ONLSTH 49 at para 23 and 27.

57The Law Society submits that, where past misconduct forms the basis of an interlocutory motion, panels should consider the likely penalty that would follow if the alleged misconduct is ultimately found. Where there is a realistic prospect of revocation or a lengthy suspension, an interlocutory suspension will ordinarily be ordered, unless effective lesser restrictions are appropriate: Law Society of Ontario v Ejidike, 2016 ONLSTH 69 at paras 61, 69, and 79.

58On the evidence and allegations here, the Law Society submits that, where it ultimately proves that a licensee knowingly participated in or assisted in mortgage fraud, absent exceptional circumstances, revocation is the presumptive penalty: Law Society of Upper Canada v Cunningham, 2012 ONLSAP 31 at para 13.

59Further, Tribunal jurisprudence is clear that revocation is the presumptive penalty for misappropriation, absent exceptional circumstances: Law Society of Ontario v Manilla, 2021 ONLSTA 25 at para 28.

60The Law Society also submits that, on the evidence, this is not a case where restrictions on the respondent’s practice would reduce the risk to the public or public confidence in the administration of justice. On the contrary, they submit the respondent’s refusal to provide his financial records to allow them to trace his trust funds, together with evidence that he has abandoned his practice, undermine any confidence that the respondent would comply with practice restrictions: Law Society of Ontario v Harrison, 2024 ONLSTH 24 at para 214.

61In this case, the respondent confirmed that he had reviewed the order sought by the Law Society and, while not consenting to the facts alleged by the Law Society in support of this motion, did not object to us granting the interlocutory order.

62For these reasons, we found reasonable grounds to believe that there is a significant risk of harm both to members of the public or to the public interest in the administration of justice if an order is not made. We concluded that an interlocutory suspension should be ordered given the strength of the evidence and the nature of the conduct shown by the evidence.

63We granted a interlocutory suspension pursuant to s 49.27(1) of the Act and Rule 12 of the Rules of Practice and Procedure.

64We ordered:

1. Commencing immediately, the respondent's licence to practise law is suspended on an interlocutory basis.

2. The respondent shall comply fully with the terms of the Law Society's Guidelines for Lawyers Who Are Suspended or Who Have Given an Undertaking Not to Practise while suspended pursuant to this order.

3. The costs of this motion are reserved to the panel presiding at the hearing of any application to which the motion relates.