Montreal police just dismantled the largest real estate fraud network in its history by arresting 17 people suspected of exploiting the pandemic to illegally remortgage homes under false identities.
“It’s a typical case of an investigation where we went after the money,” explains Detective Sergeant Karine Lessard, who has been working on the case for two years. There were many steps required before we came to our conclusions. It requires a lot of patience and consistency; it’s easy to lose track if you try to move too quickly.”
It all started in the summer of 2021 when a person took steps to refinance their residence. When she tried to get a mortgage, she was told that a $750,000 mortgage had already been taken out in her name from a private lender.
“It was a total shock,” the detective added.
Virtual meetings
One thing led to another: the investigators from the Economic Crimes Department managed to find other owners of residential buildings or undeveloped land who had fallen victim to the same schemes. The total amount of the fraud is more than $5 million, according to police.
The crimes were committed during the pandemic – a golden opportunity for fraudsters. Since most meetings then took place virtually, it was almost child’s play to impersonate someone else to sign a power of attorney or open a bank account.
Some fake ID documents used by fraudsters. Photo agency QMI, JOEL LEMAY
The fraud network used nominees, generally vulnerable people or people who needed to make a “money pass,” who they found in bars in Montreal.
“For these people it was simple, it’s not like robbing a bank or shooting someone, it’s a virtual meeting where you pretend to be someone behind your computer for the duration of the meeting,” explains detective Mélissa Desautels .
Then the network deployed its giant tentacles to cover its tracks as much as possible. Many people were involved in the deception.
Numerous documents and files were collected during the two-year investigation. Photo agency QMI, JOEL LEMAY
The leader of this network is a 34-year-old man who has an arrest warrant. Police hope to handcuff him soon. Meanwhile, they will bring seven women and 10 men, aged 22 to 60, to the Montreal courthouse today. Charges include fraud, money laundering, receiving stolen property and conspiracy.
Detectives Catherine Christie (case manager), Mélissa Desautels and Karine Lessard work in the Economic Crimes Unit with their commander Steve Belzil. Photo agency QMI, JOEL LEMAY
Luxurious properties
The homes the scammers are targeting are luxury, mortgage-free residences in Westmount and Beaconsfield. The property is located in L’Île-des-Sœurs.
Because the fraudsters used shell companies, it was very difficult for investigators to recover the stolen money. So far only $150,000 has been recovered.
“We’ve seen this trick before, but we’ve never seen it on this scale,” concludes the investigation’s lead detective, Catherine Christie.
Example of a typical case:
1- Using a false identity, nominees will virtually sign an apartment rental agreement to gain access to the premises.
2- During a virtual meeting with a notary, the nominees present themselves as the real owners. They sign a power of attorney to a member of the criminal network to give him full power over the house.
3- Fraudsters open an online bank account in the name of the real owners using a false identity.
4- The fraudster with the power of attorney receives financing from a private lender. They first demand a viewing of the premises, which the scammers can do since they have signed a rental agreement.
5- He then meets with a new notary to notarize the mortgage deed.
6- Funds are deposited into the bank account and then liquidated elsewhere so they cannot be traced.
How to prevent this type of fraud:
– The targeted homes are mortgage-free and are offered for rent. Owners of this type of housing need to be particularly vigilant;
– Prefer face-to-face meetings when it comes to an important step such as signing a rental agreement or going to the notary;
– Always compare an ID provided by someone with a real one;
– Ask for more than one ID;
– Be notified when a proxy is used
– Find out about title insurance that could cover the costs associated with a civil lawsuit
Source: SPVM