Mortgage Broker

securitiesfraud CMB MAGAZINE cmba-achc.ca spring 2019 | 31 CURRENT SENTENCE Extensive fraudster Ayaz Dhanani has been sentenced to a total of 36 months in jail followed by 36 months of probation. He is ordered to provide a DNA sample and make restitution of $194,568 to five victims. e 36-month sentence is the total of a 23-month sentence and a 13-month sentence. Dhanani pleaded guilty in August to fraudulently soliciting $153,800 in investments from three B.C. residents. In October he received a 23-month jail sentence for those offences. Dhanani pleaded guilty in October to another fraud over $5,000 in relation to a fourth B.C. resident, and to three Securities Act offences relating to his obtaining funds for an investment from a fih B.C. resident [breaching a 2016 British Columbia Securities Commission (BCSC) order that banned him permanently from dealing in corporate securities, failing to file a prospectus (a formal document that provides details of an investment), and misleading investors]. In November he received a further 13-month jail sentence for those offences. BCSC executive director Peter Brady says, "Dhanani preyed upon people's lack of knowledge about investments. He made promises about businesses or opportunities that simply did not exist." Indeed, Dhanani has a significant history of such character. HISTORY Currently Dhanani faces criminal charges concerning kidnapping, unlawful confinement, identity the, unauthorized use of credit cards and extortion. In 2016 the BCSC sanctioned Dhanani under the Securities Act for committing fraud. He was ordered to pay $188,800 as the amount he obtained by having not complied with the Securities Act and further an administrative penalty of $225,000. e BCSC also permanently prohibited him, effectively, from engaging in securities activities covered by the Securities Act. Dhanani had fraudulently raised the total of $188,800 from three investors in exchange for promises to purchase shares in three resource companies that he claimed were about to go public. He promised each investor that their investments would increase significantly in value over a short period of time. He never purchased any shares with the investors' money. In 2017, the BCSC recovered $120,000 for these three investors. In 2014 the B.C. Registrar of Mortgage Brokers ordered Dhanani to cease and desist carrying on business as a mortgage broker without first obtaining registration under the Mortgage Brokers Act. e Registrar indicated in the order: It is clear to me based on the evidence provided, that Mr. Dhanani has, with the assistance of a licensed Realtor, and acting under the unauthorised guise of a dissolved company whose name is the same of an unrelated foreign company, deceived the Complainant into thinking he was a mortgage broker who could arrange a mortgage for her. Instead, he arranged to divert her purchase down payment into a payment for himself and others. Dhanani had: n offered to arrange a mortgage on the complainant's behalf, n provided a mortgage application to the complainant on the unrelated company's letterhead and received it back for the stated purpose of his obtaining mortgage financing on her behalf, n ordered an appraisal on behalf of the complainant, n requested documents from the complainant in support of her mortgage application, n provided a number of assurances that the complainant's mortgage application would be approved, and n advised the complainant that he had obtained a mortgage loan approval from a specific credit union on her behalf. Dhanani obtained $100,000 from the complainant by falsely telling her that the credit union needed proof she had the down payment available. As early as the making of this Order, the Registrar said: Mr. Dhanani's conduct in this transaction is extremely serious in nature as his deception has resulted in the diversion of significant funds. It is reasonable to assume that Mr. Dhanani may continue to deceive others in a similar way for his personal gain. (Emphasis mine) Time has proven the highlighted statement to have been very correct. TAKEAWAY e financial sector's having integrity is critical to its proper functioning. Fraud, by reducing public confidence, is one of the more serious attacks possible on that integrity. Preventing fraud takes considerable resources, including regulatory, police and judicial staff time. Mortgage brokers can play a key role in reducing the level of fraud in the financial sector, such as by ensuring business is done only with registered mortgage brokers and with other authorized financial sector personnel. As well, brokers should be educated in and be alert to detecting fraud. CMBA offers courses to assist.

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