Blue Chip lawyer's day of reckoning

Mathias, who one Blue Chip victim said used his relationship to celebrity sister Peta Mathias to gain the trust of elderly investors, did not appear before the tribunal, but admitted each of the 13 charges of misconduct and accepted his striking off as a lawyer as inevitable.

Sunday Star Times
July 4, 2010

Blue Chip lawyer's day of reckoning
Rob Stock

BLUE CHIP pet lawyer Jonathan Mathias has been found guilty of multiple counts of misconduct for his part in luring unwitting elderly investors investing with Mark Bryers' property investment company, thus putting their homes at risk.

Mathias, who one Blue Chip victim said used his relationship to celebrity sister Peta Mathias to gain the trust of elderly investors, did not appear before the tribunal, but admitted each of the 13 charges of misconduct and accepted his striking off as a lawyer as inevitable.

In case after case, Blue Chip referred Mathias to clients as an "independent" legal adviser, but in reality he failed to warn them of the extreme risks involved with borrowing against their homes and handing the money over to Blue Chip.

The decision by the Lawyers and Conveyancers' Disciplinary Tribunal has also revealed legal profession authorities allowed Mathias to continue to practise for nearly a decade despite his having already been censured for similar misconduct.

In 2001, the New Zealand Law Practioners' Disciplinary Tribunal made orders preventing him from practising as a solicitor "on his own account" or playing any part in the management of a trust account.

The tribunal recommended the decision be published, but it never was.

Its latest finding reveals that "a number of the defaults which feature in the present charges also featured when he was charged in 2001".

In late 2005, the tribunal removed the restrictions on Mathias practising alone, something that the Auckland District Law Society did not oppose. The tribunal ruled that Mathias had to make his practice available for inspection by the New Zealand Law Society at six-monthly intervals. It is not known whether any inspections took place.

The tribunal also decided that this decision was not to be published, so Mathias got away without any public shaming that might have alerted future clients.

There are, it appears, no records of how the 2005 ruling was reached, though at the time Mathias was already embarked on a six-year course of misconduct in relation to Blue Chip investors.

The "broad spectrum of misconduct" that Mathias admitted, which the tribunal described as demonstrating negligence and dishonesty, included:

- Acting when there was a conflict of interest

- Acting in breach of trust

- Not advising potential investors of the extreme risks of signing up with Blue Chip

- Failing to disclose fees and commissions he was receiving

- Charging for work he had not done

- Taking client money without the authority of clients

- Failing to repay client money when requested

- Mismanaging his trust account

- Failing to produce documents to investigators

The lawyer representing the New Zealand Law Society at the hearing, which was pushing for him to be struck off, said Mathias was motivated by "greed" and "self-interest", and said any one of the charges would warrant him being struck off.

"As a result of Mr Mathias's conduct, clients have suffered significant financial hardship including in some cases, the actual or impending loss of their home," the tribunal found, saying he was "completely untrustworthy in the role of a legal adviser".

It found he had brought the legal profession into disrepute and undermined faith in the legal fraternity.

"To his credit, Mr Mathias is at least able to acknowledge the accuracy of the summary of facts," the tribunal said. Mathias appeared in his submission to the tribunal to cast himself as a victim, saying he had been "flattered" by Blue Chip referring clients to him. He believed it to be a successful company and had no reason "to doubt or question their bona fides".

Mathias, who claims now to be medically unfit for work, told the tribunal the flattery had "blurred his vision" and he had failed to properly scrutinise documents. Over time, he became increasingly dependent on work sent his way by Blue Chip.

The tribunal said his inaction after the Blue Chip collapse, which he claimed had overwhelmed him, had aggravated his clients' problems.

It imposed costs of $20,000 against him. Mathias has been bankrupted and claims to have lost his home and career.

http://www.stuff.co.nz/sunday-star-times/business/3879928/Blue-Chip-lawyers-day-of-reckoning


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