'Shadow-brokering' leads to lifetime ban for former mortgage pro

A B.C. man has accepted a lifetime ban on registration as a mortgage or submortgage broker for submitting fake income and tax documents to banks on behalf of clients.

As part of a consent order reached last month with B.C.'s Registrar of Mortgage Brokers, Ricky Kanwal also admitted to allowing two unlicensed dealmakers to use him to get financing for people who would likely otherwise never have been able to get a loan.

It's the latest in a series of orders connected to a crackdown on so-called "shadow brokering" — where unregistered individuals direct deals fronted by licensed brokers.

The maximum fine for shadow brokering appears to be $50,000. In recent years, the provincial regulator has opened more than a dozen investigations into people accused of fronting for unlicensed brokers.

The cases represent hundreds of millions of dollars worth of mortgages handed out during the B.C. real estate boom of the last decade. One case alone was estimated to have involved half a billion dollars worth of financing.

'Found not to be genuine'

Although the regulator says it works with other authorities, few investigations — if any — appear to result in criminal fraud charges, despite the use of false tax and banking documents.

Kanwal's name previously arose in connection with an investigation into Vinita Devi Lal, a woman who was accused of giving instructions and directions to several Lower Mainland mortgage brokers.

At least one of those brokers has also been barred from the profession for 10 years.

Chris Carter, deputy registrar of mortgage brokers and vice-president of the B.C. Financial Services Authority, says the lifetime ban against Kanwal is a sign of how seriously the regulator takes the issue.

"It is in many ways the ultimate regulatory sanction," he said. 

"When it comes to facilitating unregistered activity, at the end of the day, you're undermining the integrity of the regulatory program, you're undermining the integrity of industry and you're placing the public at risk."

The consent order doesn't give an idea of the money involved.

Kanwal admitted to acting on behalf of the two shadow brokers in connection with 41 mortgage applications submitted on behalf of 17 borrowers from November 2015 to December 2016.

According to the order, Kanwal's files revealed three different versions of one client's 2013 tax form "with an income ranging from $18,861 to $92,969."

He also had two different versions of the borrower's 2014 tax documents where the total income ranged from $15,602 to $92,969.

In several applications, income statements and bank history statements "were found not to be genuine, and employment and income information were found to be inaccurate."

'It's happening now as well'

The name of one of the two unlicensed people Kanwal worked with is redacted from the consent order. But other documents related to the case have identified her as Vinita Devi Lal, also known as Anita Gomes.

The bulk of the files associated with Kanwal allegedly came from Lal.

The other two came from Nasir Aziz Ansari.

In a telephone interview, Ansari told the CBC he was working with Scotiabank at the time. His online business card described him as a "mortgage development manager."

Ansari also reached a consent order with the regulator, but said he had little choice. He said he couldn't afford a lawyer and was off work with illness, compounded by the stress of the investigation.

According to the order Ansari signed last July, he collaborated with Kanwal to submit a mortgage application supported by a business licence that "he knew or ought to have known" was not genuine.

In another case, Ansari admitted to working with Kanwal to submit false information claiming a client was a software engineer making about $77,000 a year when they were, in fact, nothing of the sort.

The order says Kanwal gave Ansari more than $1,000 in total compensation for arranging mortgages

Ansari told the CBC privacy laws make it very difficult to check the information submitted to brokers and people in the financing industry. He said he didn't realize that he was violating any regulations by taking clients to Kanwal.

"I know, for sure, that even in this market, it's very hard to afford a $2 million or $3 million house with 25 per cent down. So I'm sure that whatever was happening a year or two years or five years ago, it's happening now as well," he said.

Ansari was ordered to immediately cease acting as a mortgage broker or submortgage broker and to pay an administrative penalty of $12,000. He was also ordered to pay investigative costs of $1,341.

Ansari no longer works for Scotiabank. He says he felt it was unfair Lal's name would be redacted from Kanwal's consent order while his was made public.

In addition to agreeing never to apply for registration as a mortgage broker, Kanwal was also ordered to pay $10,000 in investigative costs.