Mortgage Broker

MortgageBroker mbabc.ca winter 2015 | 45 and his parents used the rest. Aer a week they had spent all of the money. Shortly aer they invested, Dhanani told the investors that their investments had generated returns. In fact there was no investment opportunity and Dhanani had not used any of the money from either investor to purchase stock. Despite several promises to do so, Dhanani never returned any money to either investor. e Notice of Hearing alleges that by engaging in the described conduct, Dhanani perpetrated a fraud contrary to section 57(b) of the Securities Act. Section 57(b) prohibits a person from engaging in conduct relating to securities if the person knows, or reasonably should know, that the conduct perpetrates a fraud on any person. e Notice also alleges that Dhanani's conduct harmed the reputation, integrity and credibility of the province's securities market and regulatory environment, and is contrary to the public interest. e Commission will be seeking a cease trading order and an administrative penalty against Dhanani. e Securities Act provides for a penalty of up to $1 million for each contravention, which could result in substantial penalties against Dhanani. ese allegations have not been proved. A date for a hearing is scheduled to be set in February 2015. – Samantha Gale Major Mortgage Fraud Straw buyers and falsified documents used to purchase more than 20 real estate properties FouR people in a Calgary-based criminal group are facing 29 criminal charges related to a complex mortgage fraud scheme. e number of properties is large as is the amount of money involved and the extent of the fraud. e allegations are as follows. e mortgages relate to more than 20 properties, most in Calgary but some in Fort McMurray and British Columbia. e mortgages range from $300,000 to more than $1 million each. Many of the mortgages are insured through CMHC and so the public will possibly have to absorb losses in the millions of dollars. While there were many variations and methods of the scheme, the alleged criminal group is believed to have used fictitious companies to commit mortgage fraud. Four fraudulent companies said to be used by the group are: Apex Medical Services Ltd., Petro- Alta Resources Corp., Harmony Skin Clinic Ltd. and Nucity Homes Inc. None of the companies had any physical presence, however the group did utilize an office in a highrise in downtown Calgary according to Staff Sergeant Martin Schiavetta of Alberta Law Enforcement Response Teams (ALERT). e alleged purpose of the companies was to fraudulently manufacture supporting documents (e.g., tax assessments, employment records, letters of employment and income verifications) to mislead financial institutions into thinking mortgage applicants were employees of the companies. e commander of the Calgary ALERT team, Inspector Gerry Francois, said, "is group would utilize straw buyers to purchase homes using falsified documents. ey would profit from exorbitant service fees, inflated values of the mortgages, and borrowing against the mortgages. e crime would then be continued by fraudulently purchasing additional homes." e group allegedly directed mortgage brokers, individuals in the banking industry, realtors and lawyers to facilitate these mortgage frauds. On December 10, 2014, the following were arrested and charged as indicated. • Ricco King, 42, from Fort McMurray, Alberta, residing in Calgary: Obstructing justice; Administering a noxious substance (two counts); Identity the; Personation; Money laundering; Conspiracy to obstruct justice; Conspiracy to commit fraud; Instructing a criminal organization. • Farhan Sattar, 35, from Golden, B.C., residing in Calgary: Obstructing justice (four counts); Sexual assault; Identity the; Money laundering; Conspiracy to commit fraud; Instructing a criminal organization. • Jared Jenkins, 30, from Calgary: Identity the; Money laundering; Conspiracy to obstruct justice; Conspiracy to commit fraud; Commission of an offence for a criminal organization. • Santino DiMarzo, 30, from Calgary: Money laundering; Commission of an offence for a criminal organization; Fraud (four counts). Investigators are expecting more charges and arrests to follow. Members of the public who may have been in contact with these individuals or these companies are asked to review their mortgage with their lending institution and to monitor their credit rating. e group's assets are being seized, including a $200,000 2013 Ferrari. Civil forfeiture options are being explored. Civil forfeiture allows the government to seize property obtained by unlawful activity. If civil forfeiture processes are successful, any monies realized would go to the government. is matter underlines the importance of persons in the mortgage process, including mortgage brokers, being vigilant in detecting fraud. It also demonstrates a number of opportunities in the process for detecting it. – Ray Basi •

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