False documents reportedly sent to unnamed lender
The Financial Services Regulatory Authority of Ontario (FSRA) uncovered an alleged scheme involving falsified documents and millions of dollars in loans.
At the centre of the investigation is Masoud Asnafi, a mortgage broker who allegedly submitted 19 mortgage applications containing altered or fabricated documents to an unnamed lender.
These documents, submitted between May 2021 and April 2022, are alleged to have included inflated bank statements, bogus income tax returns, and even non-existent master business licenses. In one case, Asnafi reportedly overstated a client's account balance by over $750,000.
Asnafi worked for Real Mortgage Associates (RMA) under principal broker Rohan De Silva.
Despite red flags, De Silva reportedly approved all but one of the applications, totalling nearly $12 million in loans. Asnafi and RMA reportedly earned over $120,000 in commissions from these fraudulent transactions.
“De Silva failed to take reasonable steps to prevent Asnafi from submitting the false or deceptive information to the lender, despite indicators, like incomplete mortgage fraud checklists, that the applications were at higher risk for false or deceptive information,” FSRA wrote in its notice of proposal.
The Ontario financial watchdog is seeking to impose a $20,000 penalty on De Silva for his lack of oversight.
De Silva had been previously notified by the Financial Services Commission of Ontario (FSCO) in 2018 about a complaint alleging Asnafi had offered to produce fake documents for a prospective borrower.
Despite this warning, De Silva failed to ensure that fraud prevention steps, such as the completion of RMA's "Mortgage Fraud Checklist," were properly implemented.
RMA itself faces a $20,000 penalty for failing to maintain complete and accurate records of documents obtained from borrowers, a violation of Ontario's mortgage regulations. When FSRA requested communications between Asnafi and 23 clients, RMA was unable to provide these records and could only obtain incomplete information from Asnafi.
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Furthermore, the investigation uncovered that Approved Mortgage Brokers Inc. (AMB), a company associated with Asnafi, was operating without proper licensing. AMB faces a $10,000 penalty for using descriptions that could lead the public to believe it was a licensed mortgage brokerage.
FSRA is proposing to refuse the renewal of Asnafi’s mortgage broker license. Overall, FSRA is recommending 21 administrative penalties totalling $110,000 on Asnafi, two penalties totaling $20,000 on De Silva, a $20,000 penalty on RMA, and a $10,000 penalty on AMB.
All parties involved, including Asnafi, De Silva, RMA, and AMB, have requested a hearing before the Financial Services Tribunal to address these allegations.
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