Mortgage Broker

44 | winter 2015 mbabc.ca MortgageBroker regulators in action Deception and Missing Funds Allegations of unregistered mortgage broker activity and fraud attract the attention of two regulatory bodies RegulatoRs aRe catching up with Ayaz Dhanani. In April 2014 the Registrar of Mortgage Brokers (Registrar) issued a cease and desist order against him for unregistered mortgage broker activity. Now the BC Securities Commission (Commission) has issued a Notice of Hearing against him alleging that he defrauded a co-worker of $13,800 and a stranger of $55,000. e Registrar's cease and desist order also contains allegations tantamount to fraud. According to the Commission's Notice, Dhanani has criminal convictions related to the and fraud (including fraud over $5,000 and possessing instruments for forging or falsifying credit cards). In the Registrar's matter, a real estate agent referred to Dhanani a prospective borrower who needed a mortgage to complete a purchase. Dhanani was not registered as a mortgage broker, however, he allegedly sent the borrower a mortgage application on a company letterhead. He assured the client that he would get the best rate for the new mortgage and requested information relating to the borrower's current mortgage. Dhanani then told the client that she was approved for a $750,000 mortgage. He also told the client that he could obtain a $100,000 second mortgage on her existing property, but for this to happen the client needed to prove to the lending credit union she had the $100,000 down payment needed for the purchase. Dhanani said that this was to be done by providing a bank dra for deposit into the credit union's main mortgage account. e client gave the bank dra to Dhanani; the funds were allegedly deposited into an account at the credit union in the name of the real estate agent. A few days later the real estate agent told the client that Dhanani did not want to do the deal anymore. e client asked for her money back but, despite a number of assurances, it was not returned. Much of the money from the account was paid to Dhanani, according to the cease and desist order. e lender had never received a mortgage application in the name of the client and, not surprisingly, the client never received the mortgage commitment letter promised by Dhanani. e Registrar concluded: "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." e Registrar of Mortgage Brokers in making the cease and desist order 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." e Registrar found that the public interest would be prejudiced by the delay it would take to hold a hearing and ordered Dhanani to cease and desist from carrying on business as a broker or holding himself out as a broker unless and until registered under the Mortgage Brokers Act. e Commission's notice also alleges acts of deception by Dhanani, including false promises and assurances to entice unsuspecting members of the public to part with money. e allegations include the following. Dhanani has never been registered under the Securities Act. Between June and July 2013 he defrauded two investors. Around June 2013, Dhanani presented a former co-worker with an investment opportunity. He told her there was a mining company that was about to go public and his family had special access to the company's stock. He said that the stock price would increase by 50 per cent in a short time period. e co-worker then gave Dhanani $13,800 for the investment. Dhanani and his father deposited the money into an account held by Dhanani's parents. Dhanani took $6,500 of the money for himself and his parents used the rest. Aer a week they had spent all of the money. In July 2013, Dhanani approached a complete stranger at a bank and pretended his name was Azim Virani. Dhanani befriended the stranger by telling him he could get him a job at a hotel his father owned in Vancouver. Dhanani then gave the stranger his contact information. In fact, Dhanani's father was not in the hotel business and there was no job opportunity. e stranger contacted Dhanani about the job and they arranged a meeting. At the meeting, Dhanani told the stranger about an investment opportunity involving a mining company that was about to go public. Dhanani told the stranger that the stock price would increase by 50 per cent in a short time period. e stranger gave Dhanani four bank dras totalling $55,000 for the investment. While posing as Azim Virani, Dhanani told the stranger to make the bank dras payable to his business partner "A. Dhanani." Dhanani and his father deposited the stranger's money into two accounts held by Dhanani's parents. Dhanani took at least $17,000 of the money

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