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

by Baldo Minaudo in Crime, September 15, 2011

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.

Image by adactio via Flickr

“Know Your Customer” seems not to have worked in preventing this fraud. Did the system fail or was there some sort of collaboration among individuals within the system to make this possible. These are serious questions in order to avoid this happening again. If it is a system error then the system needs to be redesigned. If it is a deficiency within the condo corporations’ laws, then they need to be adjusted. More importantly, if it is a deficiency within the financial institution that lent the money then there could be many more victims now and potentially; the shareholders.

This is something that the Superintendent of Financial Institutions needs to look into right away. Who was it at the financial institution that approved the loan? Was the loan justified by the assessment and information? Was the information investigated and due diligence conducted?

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If the condo owners are successful in a lawsuit against the financial institution, then it is that company’s shareholders that will ultimately pay the price. If the singing officer was in collaboration with Khan, then there is a good chance that person could also disappear to Bangladesh or some other country. In such countries $20 million or even half of that is the equivalent of a small kingdom and you could certainly live like a king the rest of your life.

Though this is presently a civil action, the regulators and Royal Canadian Mounted Police need to investigate these circumstances and how they came about in order to protect the taxpayers and innocent condo owners.

If you own or have invested in a Toronto condominium unit, you might want to look into who the property manager is (or was) and do a title search against the property and condominium corporation to make sure no one has registered any unauthorized mortgages or loans against the property. Otherwise, you could be personally liable for the debt.

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“Real Estate is the Riskiest Investment during Turbulent Times“

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“Real Estate Numbers Misleading”

“Real Estate Prices and Interest Rates and How You Can Lose $40,000”