Bank Of Montreal Makes Public Huge Mortgage Fraud Law Suit

On May 15th, 2009, the Bank of Montreal filed a major civil law suit in Court of Queen’s Bench in Calgary against approximately 260 Defendants in a mortgage fraud scam that took place in Calgary during 2006-2007.

The Defendants were a collection of the accused “masterminds” of the scam, various lawyers and law offices, mortgage brokers, appraisers, and four former employees of the Bank of Montreal.

For the first 11 months of the law suit, it was kept “sealed” and was not made public.

During April of 2010, the original law suit was amended by added approximately 75 more defendants, and removing a few of the original defendants. Then, during the first week of May 2010, the Bank of Montreal made public the law suit.

The law suit is broken down into a series of “groups” – 15 such groups in all. Within each group, there is a series of masterminds identified, usually a legal arm described, a financial connection described, and some of the groups have mortgage brokers, appraisers and even realtors, or other businesses listed.

Essentially, it is alleged that the masterminds organized mortgage fraud by flipping residential houses and apartment units, and the acquiring of hugely inflated mortgages by the use of so-called “straw buyers” or as Rainbow Investigations calls them, “victim buyers”.

There are 18 lawyers included in the lawsuit. The one lawyer that has received the most media interest in Calgary has been Calgary MP, and lawyer Devinder Shory for the small connection that his law office was in fact the conveyance lawyer on a few of the fraudulent property transfers.

This lawsuit is in very early stages, with a Statement of Claim having been just served for the majority of Defendants. It will likely be years before this law suit is completed.

At this early stage, the Bank froze many of the assets of the Defendants. Some of the Defendants are in fact hiring their own lawyers, and put forth court orders to be able to access their own assets for living purposes.

The CBC link which broke the story is here

An update from the Calgary Herald on some of the interesting developments in the investigation of this story is here

Date of Story: Sunday, June 06, 2010
Story Posted By: Ron Reinhold
Source: Ron Reinhold

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