Alleged mortgage fraud victims still not off the hook for payments after criminal charges laid
Some have taken fight to civil courts as former mortgage broker charged by police
Through 18 years of friendship, Eunice Chan said she'd built a bond with Po Yuk "Peggy" Chan. They travelled the world together, were part of the same church community — and Eunice Chan even introduced her friend to members of her family.
"[If] she asked me to do anything, I would do that because I trusted her," Eunice told CBC News in an interview.
She is now embroiled in a series of lawsuits involving former real estate agent and mortgage broker Peggy Chan, alleging her longtime friend defrauded her of hundreds of thousands of dollars.
"It's a surprise, it's a shock.... I know I was cheated by someone," she said.
CBC News first reported on the allegations about Peggy Chan in February 2023. Last month, York Regional Police announced that the Markham, Ont., woman had been charged with multiple fraud-related offences.
Police allege that from 2016 to 2021, the former agent defrauded people who did not speak or read English well by registering mortgages on their homes and withdrawing the proceeds. Through her lawyer, she denies the allegations.
Even with the criminal charges, some of the alleged victims who spoke to CBC News are still on the hook for hundreds of thousands of dollars from the mortgages. As the lenders seek to collect, some alleged victims are now at risk of losing their homes.
Experts say this is the reality with many fraud cases: Even when criminal charges are laid — and even when there's a conviction — the burden lies with the victims to try to recover the money through civil lawsuits. They say the process is challenging, time-consuming and can leave some financially devastated.
Allegedly fraudulent mortgages
York Region police say the criminal charges involve five alleged victims, including Eunice Chan and Tina Li, both of Markham, who spoke to CBC News earlier this year.
Eunice claims that in 2021, Peggy Chan — who is not related to her — approached her with the idea of purchasing an investment property together.
She said Peggy, 50, convinced her to open up a joint bank account, and she was taken to a lawyer's office to sign paperwork. Eunice said she believed the paperwork was related to the purchase of the property.
"At that time, I didn't have any doubts," said Eunice, who in court documents alleges she was rushed through the paperwork at the lawyer's office and was then visited by Peggy at her home to sign more paperwork.
She said her friend later told her the purchase wasn't moving ahead. It wasn't until about a year later that Eunice said she received a letter from a lawyer about a $300,000 mortgage on her own property.
The 64-year-old said she later learned that two mortgages had been taken out on her home — one for $850,000, another for $300,000 — without her knowledge. The proceeds, she claims, were deposited into the joint account and then later withdrawn by Peggy.
Eunice said she can't afford to pay the mortgages, and the lender of the $850,000 mortgage is seeking enforcement action — meaning her home could be seized. Two weeks ago, a motion for the validity of the mortgage was heard, and a judge's decision is expected in the coming weeks.
It's a reality that Shirley Xialian He said she knows too well. In court documents, she claims she used her life savings to purchase a property in Toronto. Given her modest income, she alleges Peggy Chan offered to broker a mortgage loan to facilitate the purchase.
Instead, He claims that Chan misrepresented the terms of the loan and took out a second mortgage on the purchased home without her knowledge. The 59-year-old said she was forced to sell the home to pay off the two mortgages, was left with about $11,000 and now rents one room in a basement apartment.
"I sold my house because the pressure was too huge," He told CBC News through an interpreter.
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Tina Li, 45, who shared her story with CBC News in February, is another alleged fraud victim. She said she continues to fight the mortgages placed on her property but worries about the possibility of losing her home — with one of the lenders seeking to enforce a $400,000 mortgage, which Li claims was taken out without her knowledge.
"Even though [Peggy Chan] was arrested and got charged, we are still liable for the payments she deceived from us," Li told CBC News.
Criminal vs. civil courts
Some fraud experts said it can take a significant amount of time for police to lay criminal charges — if they're even laid at all.
"It's pretty rare that criminal charges are laid, and I think it speaks to the seriousness of this case," said Vanessa Iafolla, a principal with Anti-Fraud Intelligence Consulting in Halifax.
But even with criminal charges, it's still necessary to pursue claims through civil courts to try to recoup money because both cases are completely separate — a system that Iafolla called flawed.
"The reality for the majority of fraud victims is that justice is long and slow and incomplete."
Norman Groot, a lawyer whose firm focuses on fraud recovery litigation for victims, said one of the main issues in any case is the speed at which stolen money is traced and then frozen or preserved.
"Criminal cases can go on for years. In all likelihood, whatever money was stolen ... will be long dissipated," said Groot, whose firm, Investigation Counsel Professional Corporation, has offices in Toronto and Vancouver.
He said the best option for many victims is to try to trace stolen money through the civil courts as soon as possible.
"It's very difficult because most often the people who are making the complaint — the victims — have been cleaned out by the fraudster, and they don't have funds to spend on a civil lawyer," Groot said.
Dozens of properties impacted: investigator
Private investigator Brian King, who has been looking into cases involving Peggy Chan for nearly a year, said it's like putting together pieces of a jigsaw puzzle.
"I've got one [case] that I'm handling right now [where] the one mortgage alone is $900,000. So when you do the math on all these mortgages, we're talking 10 to 20 million dollars plus," said King, president and CEO of King International Advisory Group in Richmond Hill, Ont.
He's been hired by title insurance companies representing either the homeowners or the lenders and is currently investigating eight claims on six properties. But he said he's aware of dozens of other properties that have been impacted by Chan's alleged actions.
King said he's seen no evidence that the lenders are complicit in the alleged fraud.
He said while he sees many cases of mortgage fraud where someone impersonates a homeowner to take out a mortgage and withdraw the funds, what makes these cases more complex is that in some instances, the true homeowners signed the paperwork — saying they believed it was for something different.
The other complexity is the alleged involvement of a registered mortgage agent.
"All of a sudden, you have someone that understands the system and knows how to manipulate things through the system," King said.
Lawyer denies allegations
In an interview with CBC News last month after the charges were laid, Peggy Chan's lawyer, David Myers of Markham, said his client is co-operating with police and was released on her own recognizance. Her first court appearance is scheduled for later this month.
He maintained his previous claim that the alleged victims knew what they were signing and that they were willing participants in housing investments that didn't materialize in the way they'd hoped. It's a claim they deny.
CBC News previously reported that Chan is listed as "not authorized to sell" under her mortgage broker licence. While she was previously listed as a salesperson under the Real Estate Council of Ontario directory, a search of her name now yields no results. An email to CBC News from former employer Bay Street Group Inc. Brokerage states that "she is no longer with us," as her licence was terminated in May.
Meanwhile, York Region police believe there are more alleged victims, and they are being urged to come forward. The three women who spoke to CBC News are also appealing for other alleged victims to report their claims to police.
"I hope more people will have the courage to speak up," Tina Li said.
As for Eunice Chan, who's awaiting a judge's decision on the validity of one of the mortgages, she said she hopes she won't lose the home she's lived in since 2012.
"I need to take care of my mom," she said, adding that her house is close to the facility where she visits her mother daily.
"I cannot buy another house even though I worked so hard in my age ... to me in my age, it is irreversible."
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