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Franchise Player
Join Date: Dec 2003
Location: Probably stuck driving someone somewhere
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Update: Calgary MP Shory Accused in Giant Mortgage Fraud
UPDATE: Devinder Shory (? - spelling), a MP for Calgary is being linked to the scheme as per a story on CBC radio (just finished). Will look for a direct link/story.
AS per video link - http://www.cbc.ca/video/#/News/ID=1486263042 - on CBC Website, "BMO Sues Conservative MP - Bank of Montreal's lawsuit implicates Conservative MP Devinder Shory in alleged mortgage fraud in Alberta".
MP Shory accused in giant mortgage fraud
The Bank of Montreal is accusing Calgary Conservative MP Devinder Shory of having ties to what is believed to be Canada's largest mortgage fraud.
The bank has filed a lawsuit against hundreds of Albertans, including Shory. Civil court documents filed in the lawsuit, and obtained exclusively by CBC News, allege Shory, a lawyer, executed legal transactions that misrepresented the true mortgage owner of at least five Calgary properties.
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In its statement of claim, the bank says Shory was one of several lawyers who were involved in the "fraudulent scheme of the Malik Group."
The bank claims the Malik group identified properties to be used in the fraudulent scheme and, "in the majority of instances, these were entire apartments or condominium complexes."
"The various members of the Malik group and the Malik lenders recruited and induced individuals to participate as 'straw buyers,'" the bank says in its lawsuit.
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"[The Malik group] prepared, altered, or modified proof of employment income and proof of assets sufficient for a down payment for each of the straw buyers to reflect a more favourable employment and greater assets, all of which was necessary to support the application for the mortgage advance on behalf of the straw buyer," the bank claims in its lawsuit.
The bank says Shory and the other lawyers arranged for the land transfer to be executed by the original seller, as a blank form, or directly to the straw buyer.
"The Malik lawyers used the mortgage proceeds advanced by [the Bank of Montreal] to pay the cash to close the original vendor and to pay the excess proceeds to the solicitor for the vendor. Often both the vendors and the solicitors for the vendors were members of, or associated with, the Malik Group."
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Investigators found Shory acted in at least five straw-buyer cases. The bank obtained Shory's trust account ledger. It shows he ran more than $3.7 million through an account that the bank has linked to the fraud.
The documents show Shory did not disclose to the bank that he was involved in a transaction involving a straw buyer.
In its lawsuit, the bank says the fraud's "central participants" arranged the "skip transfer." Using a skip transfer is a common method of falsely inflating the value of a property.
"In this case, the title to the property never was in the name of the central participant, but rather, went directly from the original owner to the straw buyer."
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The bank claims Shory had a legal duty to disclose this skip transfer or side deal because it's a precursor of fraud.
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On Monday, Shory added a link on his MP website headlined, "Conservatives Stand Up for Victims of White-Collar Crime."
The Bank of Montreal is suing hundreds of people in Alberta, including lawyers, mortgage brokers and four of its own employees, in what is one of the largest alleged cases of mortgage fraud in Canadian history.
Legal documents obtained exclusively by CBC News allege the bank was the target of a sophisticated fraud operated by 14 inter-connected groups. The documents allege the scheme generated at least $140 million, about $70 million of which was for phony mortgages.
The bank has estimated it may lose as much as $30 million.
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The bank's investigators say the scam's ringleaders would identify the worst house in a good neighbourhood. They would buy at an affordable, fair-market value price, but convince the bank it was worth much more because of the neighbourhood it was in.
The bank, which relies on a software program to determine house prices by neighbourhood, claims it would end up providing a grossly inflated mortgage, and the ringleaders would pocket the difference.
To carry out the alleged scheme, the bank claims masterminds would recruit what's known in fraud parlance as a "straw buyer." For a payment of $2,000 to $8,000, these straw buyers, mostly new immigrants, would allow their name to be used to obtain the mortgage on the house.
According to the court documents, the ringleaders allegedly created fake, inflated wage and net income documents for the straw buyers to make them appear richer than they were.
Lawyers, who are alleged to have been in on the scheme, would then produce the necessary legal documents for the house sale. Seventeen lawyers have been named in the bank's lawsuit.
Last edited by RedHot25; 05-05-2010 at 06:52 PM.
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