Toronto Condo Fraud: Over 1,000 Condo Owners Liable for $20 Million, Victims Claim

A property manager responsible for managing several condominium properties in Toronto may have misappropriated over $20 million by borrowing millions against at least five buildings without their knowledge. The condo owners now fear they may have to pay back the money. With the Toronto condo real estate bubble bursting, this is another blow against condominium owners.

The man at the centre of the story is Manzoor Moorshed Khan, president of Channel Property Management. Khan is an entrepreneur who has been described with a “Rags-to-Riches” history and propensity to collect cars, and wear gold and diamond rings on every finger. According to former employees of Channel Property Management, Kahn left Canada for Bangladesh a few weeks ago. Among the victims left behind is the publicly traded financial institution that lent the money.

Khan’s daughter, Sharmin Sadia (25) has been left behind to run things. When asked for an interview by a local newspaper, Sadia referred the request to her lawyer who said the family had no comment.

Andrew Moor, president of the Equitable Trust Company has been quoted as saying “It seems to be a case where a fairly sophisticated criminal fraud has been perpetuated…managed to penetrate a long-standing process that kept us safe.”

According to a statement of defence filed in court, Channel and Khan “…deny they committed any wrongful acts as alleged.”

Yet, where is Manzoor Moorshed Khan? Khan has been known to travel often to the Middle-East, especially Dubai where it is believed he has or had business interests. At his Brampton home this week were parked Mercedes, Lexus, Audi, and BMW luxury cars. Not surprisingly, the property is monitored by four video cameras.

So how does someone go about allegedly defrauding condo owners for over $20 million? According to allegations Khan forged documents, falsified documents and also had others impersonate board members. But how is that possible with all the recent “Know Your Customer” rules that financial institutions in Canada have supposedly implemented to protect against such fraud and money laundering?

Financial institutions and other regulated companies in various countries must perform due diligence on in identifying who their clients really are. This is commonly referred to as “Know Your Customer” and the banks in Canada have spent a lot of time and money to enforce it. This rule was initiated in the USA as a policy to conform to a customer identification program mandated under the Bank Secrecy Act and the USA Patriot Act. Know your customer policies have become increasingly important around the world to prevent identity theft, fraud, money laundering and even terrorist financing.