BMO agrees with nearly 160 alleged mortgage fraud

Bank of Montreal (BMO) has entered into a settlement agreement with almost all of the 160 parties that accused him of taking part in a large mortgage fraud in Alberta learned CBC / Radio-Canada.

BMO continued lawyers, real estate agents, mortgage brokers and appraisers who have developed a complex fraud scheme. The financial institution claims to have lost $ 30 million in a scheme involving 325 people and about 70 million mortgages artificially inflated for the purchase of more than 200 properties between 2006 and 2007.

Sources told CBC / Radio-Canada a financial agreement was reached with almost all parts continued 160. Among the participants are 17 lawyers in Alberta BMO sued for negligence because of their involvement in the scheme. The Conservative MP Devinder Shory, a lawyer at the time, was among them.

Payments and penalties

Details of the agreement are confidential, but sources have revealed that the insurance lawyers of Alberta fund has agreed to pay $ 9.2 million to settle the lawsuit for BMO, on behalf of 17 lawyers.

The agreement does not mean that the accused persons have been convicted of the charges against them. MP Shory did not respond to interview requests, but has denied any wrongdoing in the past.

However, four lawyers named in the case have been sanctioned by the Law Society of Alberta and face reprimands or radiation. It is not always clear whether the other seven members of the Society, the member Shory receive sanctions. The other six lawyers pursued left the bar, have been removed, or no longer have the right for reasons that are not related to the cause.

Sources also told CBC / Radio-Canada Royal Canadian Mounted Police (RCMP) has closed the criminal investigation it had opened in 2010. The RCMP says she does not speak of an investigation, unless there is a charge is laid.

Asked about the status of the investigation, the BMO returned CBC / Radio-Canada to the RCMP, which did not respond to subsequent questions.

The scheme alleged

BMO maintains that fraudsters sought the least attractive houses in their neighborhood and bought at market value, and then resell them at a higher price, which was close to the market average in the area.

The bank alleges that fraudsters took advantage of the complicity of appraisers, attorneys, brokers and buyers acting as nominees. The latter, often newcomers received a few thousand dollars. In exchange, they bought houses with inflated prices, using false documents to convince the bank to give them a mortgage. The bank and found to pay the inflated price.

In one case, the alleged fraudsters have bought a large house in the neighborhood of Bearspaw, Calgary at $ 900,000 for resale to $ 2.3 million three years later, and pocketing a profit of 1.4 million.

BMO says fraudsters pocketed the difference between the normal price they paid and the inflated price of resale. They sent the money earned in several countries, including Lebanon, India, Pakistan, Saudi Arabia and Dubai, according to BMO.

For their part, the nominees found themselves unable to pay the mortgage, and the bank eventually enter their homes. Then she realized that the actual value does not correspond to what she had in her files. The fraud was detected in 2006.