Ontario’s legal regulator is moving to suspend the licence of lawyer Raj Grewal as the former Liberal MP faces a slew of lawsuits accusing him, the law firm he founded, family members and associates of millions of dollars in fraud and other wrongdoing.
The Law Society of Ontario is investigating charges that Grewal may have misappropriated trust money, participated in fraud and failed to act with honour and integrity, the agency says in requesting the suspension.
“There are reasonable grounds, arising out of the investigations, to believe that there is a significant risk of harm to members of the public,” the organization says.
Davinder Singh Khattra, a lawyer with RSG Law, the Mississauga, Ont., firm Grewal founded, faces similar action by the Law Society. A preliminary hearing in the two matters is scheduled for Monday at the separate Law Society Tribunal.
Peel Regional Police are also looking into some of the claims, which revolve around various real-estate transactions, according to a document filed by one of the accusers recently.
The accusations have not been proven in court and Grewal’s lawyer said he denies any wrongdoing, attributing the lawsuits to the kind of “falling out” that can occur in commercial transactions. And at least three of the cases have already been settled, the lawyer said Monday.
Grewal made headlines eight years ago when he resigned his seat in the House of Commons and admitted to ringing up “millions” in gambling debts playing blackjack at a casino across the river from the Parliament buildings. The RCMP later charged him with breach of trust.
Grewal was acquitted at trial, the judge saying prosecutors had failed to prove their chief allegation – that he had traded on his government connections to obtain loans to cover his gambling debt.
The ex-MP expressed relief as the case ended in 2023, saying he always believed he would be vindicated “even though vindication has been incredibly delayed.”
Three years later, the lawyer finds himself immersed in more legal and financial hot water, with at least 20 court actions claiming he or the firm he founded committed various transgressions. The accusations include failing to repay millions in mortgages and other loans, unilaterally erasing some of the debts or property posted as security from official records, and taking clients’ money in trust but failing to pay off loans as requested – or to give back the funds.
One case alleges that some of the proceeds of what turned out to be three fake cheques – totalling over $5 million – ended up in the trust account of RSG Law. That case, which did not name him personally, has been settled out of court, say Grewal’s lawyers, Simon Bieber and Emma March.
Judges in some cases froze RSG accounts and ordered seizures of homes owned by Grewal and his father, Avtar, also listed as a defendant in some of the cases.
Bieber and March did not respond to specific allegations in the lawsuits, but said their client denies doing anything wrong.
“Like any company involved in a large number of commercial transactions, and particularly in uncertain economic times, sometimes the parties have a falling out and litigation ensues,” they said. “Mr. Grewal’s companies are the plaintiffs in several lawsuits and the defendants in several others. Mr. Grewal is working diligently to resolve all outstanding litigation in a manner that is fair to all involved.”
Lawyers for the plaintiffs in the three cases could not be reached to confirm that they had been settled.
Grewal’s lawyers also say he sold RSG Law to Khattra in 2023 and has had “very limited” involvement in the firm’s day-to-day operations since. However, a paid “advertorial” in the Toronto Star last July depicts him as the driving force of the firm, whose initials match his own. As recently as December the RSG Law website listed Grewal as the “principal” lawyer and Khattra as an associate, a description echoed by one of the lawsuits. Grewal’s Law Society page places him at RSG Law.
Khattra, a defendant in several of the cases, said many significant suits have now been settled and that the rest are still being litigated, meaning he could not comment on them.
Avtar Grewal could not be reached for comment.
The deluge of lawsuits was first reported by The Pointer, an online news site based in Brampton.
Grewal shocked constituents and political observers in November 2018 when he revealed that he had gambled and lost millions at Lac Leamy casino in Gatineau, Que. He says he eventually paid off the debts with help from friends and family members. But the RCMP charged him with trading on his government influence to get loans, an allegation the trial judge dismissed for lack of evidence.
Grewal left political life and resumed his legal career. By last July he was publicly touting the success of RSG Law, a “thriving legal enterprise” he said had grown from one lawyer to a 40-person team.
The firm was revolutionizing the way lawyers are compensated, charging clients an up-front, capped fee rather than billing them for the number of hours worked, said the Toronto Star paid article.
“So there are no surprises,” Grewal is quoted as saying in the article. For him, the piece says, “law is not only about legal acumen, but professionalism, trust and presentation.”
Among the allegations, as yet unproven, against Grewal and RSG Law in recent lawsuits and court applications:
- In an action that Grewal’s lawyers say has now been settled, and that does not name the former MP, the Bank of Nova Scotia alleged that three TD Bank cheques were deposited this April in the trust account of another law firm, led by a lawyer who as recently as this January was listed as an RSG Law associate. The same day, the maximum amount allowed by bank rules was withdrawn, $5.3 million. After checking with TD, Scotiabank discovered the cheques were bogus, and also concluded that about $3 million of the money had ended up in RSG Law’s trust account. RSG – represented by Khattra, who called himself the firm’s owner – said in an affidavit he had no idea the money had an illegal source. A judge ordered the RSL and RSG trust accounts frozen. RSG offered to pay the bank whatever was needed to make it whole, according to one court order.
- Two brothers and their companies based in Georgetown, Ont., alleged that RSG Law, with Grewal as its “supervising” lawyer and Khattra as the associate, received $4.2 million in trust to pay off a mortgage at the Royal Bank that was to be replaced by one at the National Bank. RSG’s Khattra claimed to have given the Royal Bank a cheque for the amount but never did, the plaintiffs charged in a suit filed this month, leaving them with two parallel mortgages to service. They accuse the defendants of “fraud and deceit.” Citing some of the other recent cases, they allege it was “not an isolated incident but forms part of a broader and developing pattern of misappropriation of trust funds and dishonest conduct involving RSG Law, Khattra and Grewal.”
- Lenders alleged in another lawsuit that RSG Law and Khattra helped a company sell property it owned after the company’s $4-million mortgage was “mistakenly” deleted from land titles records, unbeknownst to the lender. The mortgage was never paid off and the money ended up with Avtar Grewal, one of the company’s directors, according to preliminary decisions from Justice Frederick Myers of Ontario Superior Court. He imposed what he called an “extraordinary order” freezing the defendants’ assets due to evidence of behaviour “approaching to or amounting to fraud.” No statement of defence has been filed.
- In another of the cases that Grewal’s lawyers say has now been settled, a group of lenders allege they loaned Grewal, RSG Law, Avtar Grewal and various associated companies $107 million over several years, only to discover in the last two years that no security was registered for some of loans and that other property posted as security was deleted without the lenders’ approval. The same security was used to borrow more money, they charge. By the time their court action was filed earlier this month, they say they were still owed $64 million and had no corresponding security. Due to the RSG group’s “gross negligence and/or fraud,” the lenders “now stand to lose their entire investment,” they alleged. Details of the settlement have yet to appear in the online court file.
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