05-04-2010, 08:23 PM
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#1
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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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05-04-2010, 08:25 PM
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#2
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The new goggles also do nothing.
Join Date: Oct 2001
Location: Calgary
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Wow, that's crazy.
__________________
Uncertainty is an uncomfortable position.
But certainty is an absurd one.
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05-04-2010, 08:26 PM
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#3
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Franchise Player
Join Date: May 2006
Location: @HOOT250
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I hate to say it but I actually worked for a guy that did this and he made a wack load of money. I always figured something was up but never thought anything of it. I figured as long as I was getting it didn't matter. Suck it BMO!
__________________
Quote:
Originally Posted by henriksedin33
Not at all, as I've said, I would rather start with LA over any of the other WC playoff teams. Bunch of underachievers who look good on paper but don't even deserve to be in the playoffs.
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05-04-2010, 08:28 PM
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#4
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First Line Centre
Join Date: Aug 2006
Location: Calgary, Alberta
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I once worked with a guy who wanted me to be a "straw buyer". Scammers everywhere...
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05-04-2010, 08:30 PM
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#5
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Franchise Player
Join Date: Sep 2002
Location: Stern Nation
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jeezuz, the amount of work people will do so they don't have to actually work...that is crazy.
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05-04-2010, 08:30 PM
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#6
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Playboy Mansion Poolboy
Join Date: Apr 2004
Location: Close enough to make a beer run during a TV timeout
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Quote:
Originally Posted by HOOT
Suck it BMO!
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Yeah, until the gov't mandates a $500 mortgage fee so banks can send out an appraser for each and every deal.
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05-04-2010, 08:32 PM
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#7
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Atomic Nerd
Join Date: Jul 2004
Location: Calgary
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Isn't this ultimately BMO's fault as well for having such shoddy software?
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05-04-2010, 08:33 PM
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#8
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Franchise Player
Join Date: May 2006
Location: @HOOT250
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Quote:
Originally Posted by ken0042
Yeah, until the gov't mandates a $500 mortgage fee so banks can send out an appraser for each and every deal.
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I was just kidding. Somehow I'm sure I will end up paying for it.
When I ended up quitting I was pretty close to calling them out for it but they still owed me a bunch of bonus money so I had to be careful. I got paid and then never looked back. Money was good and now I know why.
__________________
Quote:
Originally Posted by henriksedin33
Not at all, as I've said, I would rather start with LA over any of the other WC playoff teams. Bunch of underachievers who look good on paper but don't even deserve to be in the playoffs.
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05-04-2010, 08:35 PM
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#9
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Atomic Nerd
Join Date: Jul 2004
Location: Calgary
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Millions were funneled to Lebanon, India, Saudi Arabia, Dubai and Pakistan.
This scheme may have exploited the middle eastern/east indian/pakistani community and immigrants and may be funnelling money these countries and maybe even funding terrorism.
Then again, this is just in some ways a reversal of what banks were doing to people and what investment companies were doing with properties that led to the recession.
Last edited by Hack&Lube; 05-04-2010 at 08:37 PM.
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05-04-2010, 08:38 PM
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#10
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Franchise Player
Join Date: Dec 2006
Location: Calgary, Alberta
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I have a hard time feeling bad for a bank that can't appraise risk. I realise that this was a scam and all...but after all this is the business of the bank. They can always walk away from a deal if they don't feel its worth it.
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05-04-2010, 08:47 PM
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#11
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Lifetime Suspension
Join Date: Oct 2007
Location: SW
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Boo-Hoo ......
Any Bank that thinks it's smart to change their National Brand from "The Bank of Montreal" to "BMO" .... (pronounced: Bee-Mow) .. Deserves to be scammed!
I'm just glad I don't, and never did, Bank with them.
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05-04-2010, 08:48 PM
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#12
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Franchise Player
Join Date: Dec 2003
Location: Probably stuck driving someone somewhere
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Quote:
Originally Posted by Slava
I have a hard time feeling bad for a bank that can't appraise risk. I realise that this was a scam and all...but after all this is the business of the bank. They can always walk away from a deal if they don't feel its worth it.
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Well, it does appear that others may have been hit as well. I heard on the TV something about 16-17 other banks may have similar occurrences (I'm assuming this is as per BMOs allegations), and, according to the article:
Other banks don't appear to be as aggressive in their approach, even though documents indicate they may have been targeted too. Bank of Montreal investigators found documents that showed one Calgary management company had 150 suspect mortgages from 16 different financial institutions.
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05-04-2010, 08:50 PM
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#13
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Atomic Nerd
Join Date: Jul 2004
Location: Calgary
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Sounds like the fraudsters let it get out of control and got detected. They got too greedy and it got to big. If it stayed with the original guys who thought this up and they kept it small they might have escaped detection and could have continued doing this for years.
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05-04-2010, 08:56 PM
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#14
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Lifetime Suspension
Join Date: Oct 2007
Location: SW
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How many Princess's does Nigeria have anyway!!?? 
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05-04-2010, 09:05 PM
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#15
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Lifetime Suspension
Join Date: Mar 2010
Location: Easter back on in Vancouver
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A friend of mine actually got duped by this fraud and Its cost him about $40,000 so far. I don't know if it was through BMO but he was paid $5,000 for use of his name for a mortgage.
I don't feel bad for him because I warned him of this fraud when the same man approached me. I had a feeling this is what the guy was doing and warned him not to go ahead with it, but he did anyways.
EDIT: Just called him and the fraud was through RBC not BMO.
Last edited by puckluck; 05-04-2010 at 09:08 PM.
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05-04-2010, 09:06 PM
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#16
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Lifetime Suspension
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Stop letting people into the country so easily? Problem solved.
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05-04-2010, 09:09 PM
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#17
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Franchise Player
Join Date: Dec 2006
Location: Calgary, Alberta
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Quote:
Originally Posted by puckluck
A friend of mine actually got duped by this fraud and Its cost him about $40,000 so far. I don't know if it was through BMO but he was paid $5,000 for use of his name for a mortgage.
I don't feel bad for him because I warned him of this fraud when the same man approached me. I had a feeling this is what the guy was doing and warned him not to go ahead with it, but he did anyways.
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Is that really being duped though? Someone asks to pay you so that you use your name for the mortgage and you simply say "yes". I fail to see the trickery here. Sounds like someone just got greedy and thought it was easy money?
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05-04-2010, 09:12 PM
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#18
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Lifetime Suspension
Join Date: Mar 2010
Location: Easter back on in Vancouver
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Quote:
Originally Posted by Slava
Is that really being duped though? Someone asks to pay you so that you use your name for the mortgage and you simply say "yes". I fail to see the trickery here. Sounds like someone just got greedy and thought it was easy money?
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The trickery is when the Mortgage broker or whoever tries to get a mortgage way above the value of the house.
So a house that is worth $350 k is being mortgaged for $400 k and then they take the difference of $50 k and pocket it.
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05-04-2010, 09:21 PM
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#20
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Franchise Player
Join Date: Dec 2006
Location: Calgary, Alberta
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Quote:
Originally Posted by puckluck
The trickery is when the Mortgage broker or whoever tries to get a mortgage way above the value of the house.
So a house that is worth $350 k is being mortgaged for $400 k and then they take the difference of $50 k and pocket it.
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I must have misunderstood. Are you saying that I buy a house with a mortgage of $500k. The scammer makes the mortgage $550k though, takes the extra $50k without my knowing, and I have to pay that amount back? I guess I'm really not to clear on how this really operates. I figured that your friend just made a quick $5k here and the risk was that the mortgage is in his name and he could risk a defaulted mortgage crushing his credit rating?
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