Bank of Montreal loses millions to sophisticated mortgage scam: CBC
According to the CBC, 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 phoney mortgages.
Read more here.
Update: BMO’s fraud claims won’t be probed (Police decline on criminal investigation).
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
Norm Fisher
Royal LePage Saskatoon Real Estate
5 comments so far. We'd love to hear your thoughts.
May 5th, 2010 at 1:53 PM
Part of the “foundation” of the housing market?
May 5th, 2010 at 6:19 PM
Great Blog!! This is the 2nd big mortgage fraud case in Alberta the last was 30 million.
Why wasnt Saskatchewan hit? You guys have seen some Stellar price increases in the last 36 months.
Mark
May 5th, 2010 at 7:02 PM
Cindy,
Mark,
Thank you.
I do recall the last time this happened in Calgary. Seems to me that the banks weren’t too into bringing people to justice at that time preferring to sort of sweep it under the rug. I’m glad that they are more open to pursuing those involved in this case. That’s key to getting the problem under control.
I’m sure it has happened here to some extent. Very recently, I was called by a “company who helps place people into homes.” That sounded very nice until they told me they’d like me to cancel the listing and re-list at a higher price. My keen BS detector began to tingle a bit and I said, “this sounds a lot like fraud to me.”
The guy says, “It depends how you define fraud.”
I told him, “I define it the same way the Criminal Code of Canada does.” Click.
Thanks again for the visit.
May 5th, 2010 at 9:43 PM
Here’s a bit of a new twist to the mortgage scam story: Conservative MP implicated in alleged mortgage scam worth millions
It sounds as if the practice may have been fairly extensive:
“Greg Draper, a forensic accountant in Calgary, said his experience would suggest this is just the surface of an industry-wide problem.
“This is hitting the news because of the size of the operation and the fact a bank has decided to take such forward action on it,” said Mr. Draper, who works with the firm Meyers Norris Penny.
“But it’s happening on a smaller scale to financial institutions across the country on a regular basis.”
Couldn’t these frauds be prevented if they still had appraisers go out and inspect these properties, rather than relying on computer programs? *Sigh*
May 5th, 2010 at 10:12 PM
Jen,
Wow! if there are “hundreds” involved I would think that there will be some other interesting surprises.
“Couldn’t these frauds be prevented if they still had appraisers go out and inspect these properties, rather than relying on computer programs?”
Probably not, but crooks would need to put some effort into finding a crooked appraiser and divide the pie again.