Indo-Canadian MP named in Canada's largest mortgage fraud

Indo-Canadian MP named in Canada's largest mortgage fraud

Devindor Shory, 51, who was elected as an MP in 2008 from northwest Calgary, is among dozens of people being sued by the Bank of Montreal (BMO) in connection with the scam.
CBC reported that some of the money siphoned through the scam was transferred out of Canada, including to Lebanon, India, Saudi Arabia, the United Arab Emirates and Pakistan.

Confidential BMO documents indicate that the bank is suing Shory, a practicing lawyer, because of his involvement in several mortgage transactions called "skip transfers".
The bank alleges that 17 lawyers, including Shory, were either directly involved in the scam or did not perform their due diligence as lawyers, Toronto Star reported.
It alleges that Shory executed legal transactions that misrepresented the true mortgage owner of at least five Calgary properties.

"In our claim we allege negligence against Devinder Shory in his capacity as a lawyer," Ralph Marranca, BMO's director of public relations, said."We do not allege fraud against him. We allege that he was negligent in the way he acted as counsel for both (BMO) and the straw buyer in four transactions in which the bank has suffered a loss of approximately USD 300,000," Marranca added.

The bank, in a lawsuit filed in Calgary, alleges that the defendants found undervalued houses in upscale neighbourhoods, then paid someone a few thousand dollars to put their name on a mortgage application.

Documents were then forged to inflate the value of the property and to fool the bank into believing the buyer had the ability to pay. Once the mortgage was approved, the fraudsters pocketed the profit and the money was sent overseas, the bank says.
Shory said in a statement last night he learned only through the media that he is named in the suit.

"I have not yet been served with a statement of claim. When I am, I will defend myself vigourously against these accusations. I have done nothing wrong," Shory said.
The bank, which is suing lawyers, mortgage brokers and four of its own employees, alleges it was the target of a sophisticated scam operated by 14 interconnected groups that generated at least 140 million Canadian dollars (USD 136), about 70 million Canadian dollars of which was for phoney mortgages.

The allegations have yet to be proven in court. The bank says it hopes to recover about 30 million dollars (USD 29 million).Shory is the second Indian-origin MP in Canada to come under the scanner. Indian-origin former lawmaker Rahim Jaffer is also facing a parliamentary probe for allegations of unethical behaviour and improper lobbying.