Regulator issues hefty fines and license revocations
The Financial Services Regulatory Authority of Ontario (FSRA) has taken legal action against an unlicensed individual posing as a mortgage agent, alongside a brokerage and its licensed brokers, involved in a mortgage fraud case.
The regulator has imposed a $100,000 penalty on Nasir Syed Zaidi Hussain, who was found to be falsely representing himself as a mortgage agent, even though he was never licensed by the FSRA.
Hussain, operating through his two sole proprietorships, Referral and Solutions and QSAB Traders, was involved in nine unlicensed mortgage dealings. He promoted himself as a mortgage agent through social media and in personal meetings with borrowers, securing their trust while illegally arranging mortgages.
Hussain collected down payments totaling approximately $678,000 from borrowers under false pretences, of which $405,000 remains unpaid. FSRA has ordered him to cease using titles such as "mortgage agent" or "mortgage broker" and banned him from further mortgage dealings in Ontario.
FSRA has also taken action on Upanshuman Pandey, the principal broker of Expert Financial Corporation, and former mortgage agent Varinder Singh Virk.
Pandey is alleged to have knowingly facilitated Hussain’s illegal activities, allowing Hussain to refer clients and participate in mortgage transactions, despite being aware of his unlicensed status.
FSRA claimed that Pandey failed to verify borrower identities, keep proper records, and provided false information in his Annual Information Returns to FSRA, concealing referrals from Hussain and ignoring complaints from borrowers.
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Between 2016 and 2022, Hussain referred 54 clients to Pandey, with 21 deals closing. Pandey paid Hussain commissions of at least $97,000, often in cash, for these referrals.
In several instances, Hussain presented false mortgage documents and commitments to borrowers and, at the last minute, directed them to higher-interest lenders. When borrowers requested refunds of their down payments, many received cheques from Hussain that later bounced.
Virk, a former mortgage agent for Premium Financial Services, allegedly worked with Hussain, collecting financial information and down payments from borrowers, despite knowing that Hussain was unlicensed.
According to court documents, FSRA will revoke Expert Financial’s brokerage license and has proposed penalties of $40,000 for Pandey, $45,000 for Expert Financial, and $5,000 for Virk.
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