Licence App ‘Tribunal PERVEZ TAGARI ‘TRIBUNAL: APPEARANCES: DATES OF HEARING: BACKGROUND ‘Tribunal @appel en mmatiere de permis APPEAL FROM A PROPOSAL OF THE REGISTRAR UNDER THE REAL ESTATE AND BUSINESS BROKERS ACT, 2002, §.0. 2002, ¢.30, Sch. C TO REVOKE REGISTRATION ELIZABETH L. SPROULE, Vice-Chair CHRISTOPHER THIESENHAUSEN, Counsel, representing the Applicant GEORGE P. DRAMETU, Counsel, and JONATHAN HURTER, Paralegal, representing the Flegistrar, Real Estate and Business Brokers Act, 2002 April 4, 5, 6,7, 8, 11, 12, 13, 14, 15, 19, May 26, 2011 Toronto REASONS FOR DECISION AND ORDER This matter is an appeal from a Notice of Proposal (the “Proposaf") of the Registrar, Real Estate and Business Brokers Act, 2002 (the “Registrar” and the “Act’), dated March 12, 2010, and two Supplemental Proposals issued July 26, 2010 and Decenber 20, 2010, to revoke the registration of Pervez Tagari as a broker under the Act. The reasons for the Proposal can be summarized as follows: 1. In the Registrar's opinion, the Registrant is not entitled to registration because the Registrant has made false statements on his applications for registration, |) For greater particularity, the Registrant has provided false information about being engaged or employed in another business, occupation or profession,2. The past conduct of the Registrant affords reasonable grounds for belief that the Registrant wil not carry on business in accordance with law, and with integrity and honesty. For greater particularity 1) the Registrant has knowingly traded properties a atiiciallyinfated prices: il) assisted in the creation andior submission of false ander fraudulent documents in furtherance of realestate trades; i fale to dever andor epost documents wih the brokerage that employs im; and Wv) the Registrant was involved in the sale of a property which was grossly misrepresented by the Registrant for the purposes of obtaining an artificially inflated mortgage. ‘The property shortly thereafter sold by power of sale at a significant loss tothe financial institution. The Applicant was registered as a salesperson under the Act on March 9, 1999, and was employed by ‘Real Pro Realty Inc.’ In January of 1995 the Applicant was empioyed by Royal Le2age Homeward Inc. (subsequently renamed “Homeward Realty inc.’ hereinatter “Homeward Really’). In June 1995 the Applicant was registered as a broker under the Ac. The Applicant remained employed with Homeward Realy until the end of Apri 2007. ‘On May 1, 2007, the Applicant was employed as a broker by "The Tagar ‘Team Realy ino.” ‘Tagari Team Realty’). The Broker of Record for this brokerage was the Appican’s spouse at the time. On July 16, 2008, the Applicant began his ‘employment with Coldwell Banker Properties Unlimited where he has remained untl the present. Issues 1) Does the Applicant's conduct afford reasonable grounds for belief that he will ‘not cary on business in accordance with the law and with honesty and Integrity? 2) Did the Applicant breach s.10 of the Act and if so, does this breach disquality him from registration? EVIDENCE AND FACTS. The evidence of the Registrar consisted of documentation and the testimeny of twenty Witnesses. ‘These included eight registrants, Consumers A and B, David Tredrea, an investigator with the Real Estate Council of Ontario (‘RECO’), Shella Wison, investigator with the Royal Bank, JoAnn Swain, RECO investigator, Gerald Hunt, RECO investigator, Richard Cavanagh, senior investigator with Scotia Bank, Meritsa Pabon, former RECO employee, Jacqueline Osmond, Forsensic Documents Exariner with the Ministry of Community Safety and Correctional Services, Shahin Saleem, Broker of Record for The Tagari Team Realty Inc., Wiliam Hunter, RECO investigator andinspector, and Roy Murata, Manager, Data Service/Senior Business Analyst, Toronto Real Estate Board, The evidence of the Applicant consisted of documentation, his testimony and the testimony of the following seven individuals: Relative A and 8, Kay Ramnarain, Branch Manager Scotia Bank, Bill Periku, Broker of Record for Coldwell Banker Properties Lid. Really, Zeeshan Sarfraz, web site designer, Guy Masters, raal estate salesperson and Ghulam Rabbani, an acquaintance of the Applicant. ‘The following is a summary of the relevant evidence. It has been organized according to the issues where appropriate. Conduct Ithas been alleged thatthe Applicant was involved in rine diferent realestate trades in 2008 and 2007 which involved a range of questionable conduct. Mr. Gerald Hunt, & RECO investigator, was assigned to investigate the conduct of the Applicant. At the outset of his evidence he identiied some of the typical elements/conduct involved in mortgage fraud namely the inclusion of false information and a false picture in the MLS listing to make the property appear more valle, the inflation of the seling price and the Use of false documents fo obtain mortgage financing, ‘The following is the evidence and the Tribunat’s findings with respect to each of the alleged questionable trades. Property 1" Property 1 was a condominium unit that the Applicant listed for sale on April 7, 1996, for $97,900. He was working for Homeward Realty at the time. The property had previously been listed by another agent at a different brokerage for $99,900. This listing hhad an expiry date of April 8, 1996, so it would appear that the Applicants listing ‘overlapped this listing by one day. The Applicant pointed out that the previous listing indicated that it had been terminated. There are only a couple of differences in the details provided in the first isting and that of the Applicant's. The taxes quoted are the same amouri but are indicated for diferent years: the Applicant indicates they are for the 1996 year, previously it was indicated the ‘amount related to 1995, The Applicant has also included dimensions for a utlity room previously not mentioned. This unit sold on May 28, 1996 for $93,000. In April of 1999 the Applicant had the listing for this property again. It was listed for $114,800 and sold for $114,500 on June 6, 1899. Mr. Tagari himself was the purchaser and he took ttle ‘on August 5, 1999, (On June 2, 2000, slightly less than a year later, Mr. Tagari translerred the property to Relative A'for $140,000.00. A mortgage was put on the property in the amount of Exhbi bat$197,987.00 at that time. Relative A testified that he stil ves in the unit. He indicated he purchased the property in 1999. He did not recall who provided the down payment but he knew who the mortgagee was. His explanation forthe increased amount he paid for the property, $25,000 in 10 months, was because it was ‘fully renovated! with new appliances and bathrooms. There was no evidence that the mortgage was ever in default, ‘Mr. Tagari testified that he bought the condominium unit thinking his parents would tive init. They did for a short period of time and then moved to the U.S. When they moved out, he upgraded the unit. At first he thought he would live in it, then Relative A got married and was interested in buying it, Mr. Tagari testified he spent $22,000 in renovations and the price he sold the property to Relative A for was based on its cost plus the cost of the renovations. tolusion Based on the evidence the Tribunal cannot conclude that the increase in the sale price of the unit was not justified and therefore does not find that this trade in real estate Involved an artificially inflated price. Property 2* Property 2 was listed for sale by Barbara Mautl, an experienced salesperson, for {$319,900 on Apsil 6, 2008. This was a second listing for this property at this price; it had failed to sell during the previous listing. It eventually sold for $305,000 on April 21, 2006, with a closing of May 4, 2006. Ms. Maut! testified that the house needed a lot of ‘work, that the kiichen was al basement level and needed to be renovated. She had held many open houses for this property and had had difficulty seling it ‘Ms. Mauti was contacted by her client the vendor and advised that the property had ‘apparently sold for $484,000 less than two weeks after she had sold it and it had not been renovated. The client of course was not happy about this and Ms. Mauti could ‘offer no explanation as to why the selling price should be so high 12 days after her client's sale. Mr. Guy Richard was the agent that acted on behalf of the individual that purchased the property from Ms. Maut's client. Mr. Richard testified that the purchaser wanted to re- lst the property immediately, that he had indicated that he was going to do cosmetic ‘work and then list it for $500,000. Mr. Richard felt something was going on and did not ‘want to participate with whatever it was, so dectined to list the property. ‘The Applicant entered into a listing agreement with the new owner of Property 2 on May 15, 2008. The listing was to be effective as of May 16, 2006, and the sale price on the listing was to be $489,300. The listing created by the Applicant contained a number of different features than the previous April isting, In his isting, he indicated there were 10, Feats wb S|rooms rather than 8, 6 bedrooms rather than 3 (although he provided no dimensions of those additional bedrooms or where they were in the house), 3 bathrooms rather than 2, and 2 kitchens rather than 1. The taxes were also shown to be $1,600 higher although they were for the same year. The comment section was also different and included the following statements: “Completely Gutted And Renovated House", “Showings starts (sic) from May 26", "Note $1000 Bonus To Selling Broker It Sold Belore June/10". Royal LePage Homeward (the predecessor to Homeward Realty) was listed as both the listing and cooperating brokerage, and the Applicant as the broker for both, ‘An agreement of purchase and sale prepared by the Applicant was executed by a buyer land the vendor of Property 2 on June 5, 2006, (the” Agreement of Purchase and Sale") with a closing date of June 16, 2006. ‘The Applicant acted on behalf of both patties. ‘The Applicant testified that he had shown the buyer the property although he did not indicate exactly when. He also testified that he never saw the renovations completed although he did see boxes of new cupboards around. There were no terms in the Agreement of Purchase and Sale which required that any renovations be completed before the closing. The Applicant testified that he should have put in a clause to that cffect as that would have alerted the bank, There were two conditions, one relating to financing and the other with respect to an inspection, which were to be satisfied within 5 ‘days or could be waived. Both appear to have been waived but when is not clear. The ‘deposit of $5,000 was to be held by the Vendor's solicitor. Notwithstanding that the Agreement of Purchase and Sale that the Applicant admits to creating and providing to his brokerage indicates that the transaction was to close June 16, 2008, tile was transferred on June 7, 2008. The Royal Bank provided the mortgage funds for the transaction in the amount of $472,444. The agreement of purchase and sale provided to tho Royal Bank indicatod the came cale price, $184,000 but was signed May 10, 2006, and the completion date was May 31, 2006. ‘The deposit was the ‘same amount but to be held by Royal LePage Homeward. The bank was also provided with a print off of a listing from the website ‘mis.ca’. ‘The printout appears to be from May 31, 2006. The listing indicates the Applicant as the listing broker, and Royal LePage’ Homeward as the listing brokerage. Although the format is different it is, indicated on the listing that the data is provided by the Toronto Real Estate Board (TREB), and reference is made to the MLS listing number assigned to the Applicant's listing. tis clear that the witten comments describing the property are in fact those included in the listing agreement prepared by the Applicant for the TREB system. The listing and sale of Property 2 at such a high price in such a short period of time ‘caused concem for some well established agents in the area. James Dobb, an agent Who has lived and worked in the area for years, and who drove by the property on a daily basis, could not see any reason to justify the price increase and suspected that something was wrong. He first contacted the police and then was referred to RECO. Phylis Lamont, another salesperson in the area, also sent in a complaint fo RECO after noting that the sale price ofthis home was out of line for the area, particularly in view of the condition of the house. She testified that the house had criginal windows and the roof was not in good shape. She contacted CMHC to warn that she thought this was afraudulent sale but was told that the transaction was completed and the monies advanced. Ms. Lamont testified she was advised that the transaction cosed May 29, ‘The sale was reported June 7, 2006, and the reported closing date was June 16, 2006. ‘The actual closing date was earlier as the transfer of title was registered June 7, 2006. Ms. Marina Heler was a real estate agent at the time and when she saw the listing she wanted to view the house. She called the number provided for the listng broker and provided her information and was advised that the broker would call back. She never heard back fiom the listing broker. Deltdre Galois was the broker of record for Royal LePage Homeward at the time of the trade involving Property 2. The Applicant had worked for this brokerage for approximately 12 years and was a top seller. Ms. Galibois was contacted by RECO in 2006. ‘She reviewed the agreement of purchase and sale for Property 2, and other ‘documents relating to the trade, which had been filed in the brokerage's trade file.” She recalled mentioning to the Applicant that the deposit should not go to the Vendor's solicitor. She confirmed that the box regarding representation should have been filled ‘out. She also confirmed that the agreement looked lke a private sale as there was no indication of the brokerage and the deposit was going to the Vendor's solicitor. The trade file also included a ‘Confirmation of Co-operation and Representation’ agreement, signed by both the Vendor, Purchaser and the Applicant twice, dated June 5, 2006, as well as a ‘Working with a Realtor’ form which did not appear to be completed correctly. Ms. Gallibois compared the trade file Agreement of Purchase and Sale and that given to Royal Bank and noted that the deposit was to be paid to the brokerage in the latter, that the offer was signed May 10, 2008, prior to the listing of the property, and the ‘completion date was May 31, 2006. She also confirmed that it would appear that showings started after the property was sold. Jo Ann Swain is a RECO investigator. She was assigned to investigate the complaints relating to Property 2. Ms. Swain reviewed two listing agreements, one Indicating it sold {for $305,000, closing May 4, 2006, and a subsequent one indicating it sold for $484,000 fon June 7, 2006.* She also retrieved the tile documents from the land registry office and determined that the Royal Bank had advanced funds on the property. Ms. Swain, then contactad Shella Wilson, an investigator with the Royal Bank, Ms. Swain interviewed the Applicant on July 20, 2008. She made notes of the interview at the time.® The Applicant advised Ms. Swain that he attended the property and listed the property at the request of the owner. He indicated to her that at the time he was there, the property was under construction. The listing price was what the owner Wanted, taking into consideration what he paid for the property, the renovation expense, ‘eal estate commission and his profit. The Applicant indicated to Ms. Swain that he was. called by the Buyer, who saw the property on the intemet, and he showed him the: 3 ab a * eh) ib mproperty. The buyer liked it and said he would call back, which he did, and asked the Applicant to prepare an offer. The Applicant prepared the offer the same day and had the buyer sign it. He took it to the Vendor who signed it back, then back to the Buyer iho signed it back and ultimately to the Vendor who accepted it. The Buyer's signature ‘was witnessed by the Applicant's partner at the time, and the Vendor's signature was witnessed by another registrant, both of whom were in training. It was Ms. Swain's evidence that the Applicant advised her that the work ‘done’ by May 26 included work done to the basement: the basement was excavated to increase the height of basement from five feet to eight feet. ‘The Applicant also indicated to Ms. Swain that the kitchen ‘was also renovated and an apartment unit was made in the basement. The buyer was going to live in the top and rent out the bottom. With respect to the quick closing, the Applicant indicated to Ms. Swain that he confirmed with the buyer if he could close that Quickly and the buyer said that he could. Shella Wilson is an investigator with the Royal Bank. She attended the property after the mortgage funds had been advanced and she was alerted to the potential fraud. The properly was vacant although it was to have been owner occupied. Further investigations of the documents provided by the purchaser, bank statements and employment confirmation, were subsequently determined to be fraudulent. The property was eventually sold under power of sale for $290,000. ‘The Applicant testified that he viewed the property before he listed i, that he was told by the Vendor that work was to be completed and he believed the Vendor. The day after seeing the property the Applicant loaded the listing onto the system and checked comparables at that point and found there to be a wide range. He testified that he did note at that time that it had just sold for $305,000 and acknowledged that he ‘had questions.” ‘The Applicant further testified that he showed the property to the buyer one or two days prior tothe buyer making the offer on June 5, 2006, At the time of the viewing, painting hhad been done and light fixtures were being changed and boxes of cupboards were present. The work was to have been done by May 28 but the Vendor told the Applicant that he had had problems with the construction ‘guy’. It was the Applicant's evidence that when he spoke to Ms. Swain he told her that the work was supposed to be done by May 26, not that had been done. The Applicant acknowledged that when he listed the property, he provided false information as he knew the work was not done. Conclusion ‘There is no dispute that the purchase and sale of Property 2 involved mortgage fraud, the question is whether the Applicant's role amounted to wrongdoing or was he simply duped. Based on the Applicants own testimony, he created a listing for the property that stated it was ‘completely gutted and renovated. He did this knowing at the time that none of the work had been completed. In addition to this description, he misstated the number of rooms, bathrooms, and kitchens. He has testified that he believed that the work was going to be done, including the excavation of the basement to increasethe ceiling height from five to eight feet and the replacement of the kitchen, and it was the totality of these renovations that justified the listing price of $489,900. The Applicant has also testified that when he showed the property to the Buyer there had been some painting done, light fixtures were being changed and there were cupboards in boxes in the premises, but he never saw the substantial work completed. Notwithstanding this, he prepared an ofr for the Buyer to purchase the property at almost the listing price, with: no conditions requiring that any of the work be done, and with a closing date 11 days later. ‘The Tribunal finds that the Applicant knowingly created an MLS listing containing false Information and either he knew, or ought to have known, that information in listing agreements is relied upon by individuals and banking Insitutions. The Royal Bank relied upon a print out from mis.ca but the information came from the same MLS listing Which was loaded onto the TREB system by the Applicant. The false description prepared by the Applicant "Completely Gultted and Renovated House...” found iis way into the hands of a mortgage lender, whether the Applicant intended it or not. In the Tribunat's opinion willingly creating and posting an MLS listing with false information was not an act of honesty or integrity. The Applicant knew the property's value un-enovated was substantially less than the listed price. He had contacted and undertaken to provide representation to both pares and protect thei intarasts equally’. ‘The Applicant was an experienced salesperson at the time of this transaction, a top seller in fac, and does not appear to be lacking in inteligence. Clearly, no competent or honest salesperson would see a purchaser offer to pay for such substantial improvements which were not in existence without ensuring the purchaser had some recourse. The only sense that can be made of what occurred is that the purchaser dié not care whether there were any renovations done, as they were not a legtimate purchaser, and the Applicant knew i and drafted an agreement intentionally not referencing outstanding work as to avoid alerting the bank to the true state of affairs. The Tribunal finds the Applicant knew Property 2 was being traded at a highly inflated price and he wilingly and knowingly played a roe in that Properties 3 and 4 The evidence of these two properties will be dealt with togetner as both properties were: Purchased by the Applicant's Relative B around the same time and both were ‘subsequently sold by power of sal. Property 3 was listed for sale by the Applicant on June 11, 2007, for $399,000. It was described as a ‘Completely Renovated House’. Properly 3 was purchased by the Applicant's Relative B on July 13, 2007, for $395,000 pursuant to an offer to purchase dated June 20, 2007. The Applicant acted as agent for both Relative B and the Vendor. Relative B confirmed she took title to Property 3 approximately three days before taking title to Property 4 "Exhibit, wb SL Confontion of Co-operation and RepresenationRelative 6 testified that she was buying the properties at that time because she had the money and she knew that the market was going up. When questioned as to the specifics of each transaction the witness admitied to being a litle mixed up with the two Properties. At the time of the purchase of these two properties the witness was living ‘with her parents and 3 young children and apart from her husband. She testified she ‘worked in a day care at the time of the purchases and eamed approximately $2,100 per month, after taxes. She testified that she had saved some money towards purchasng the home(s). Her evidence as to how much was saved, varied. She first mentioned she had saved a couple of thousand dollars, and then she stated she had close to $14,000.00 from gifts, family and her work income. She then testified that the bank statement for a Scotiabank account with an opening balance of $32,954.52 as of May 24, 2007, was the amount she had. Relative B obtained mortgage funding from the Royal Bank in order to purchase Property 3 in the amount of $387,070.28. The monthly payments were $2,147.63, Relative B testified that she went to see Property 3” and found it to be in very good ‘condition and renovated. When asked how she paid for it, in examination in chief, the witness said “I paid money". She subsequently testified’ that she went to the Royal Bank. It was her evidence that her selection of the Royal Bank was for no particular reason. She testified that on her second meeting with an individual at the Royal Bank she provided a letter from her employer, a daycare business. ‘The records of the Royal Bank of ths transaction do not include the employment leter described above. Instead the bank has documentation on record from a company that Flative B tested she ai not recognize: “Amy Techno Inc". The bank had been given a letor from the company "Amy Techno Inc. confirming Relative B's employment and her annual income of $86,000," The bank was also provided with @ pay stub that was allegedly from this company’, indicating Relative B's name. and her SIN number Relative 6 testified she oid not recognize this document. ‘The witness confirmed a Solicitor Mr. W acted on her betalt in this transaction and that she signed the direction which was given to the mortgage lender to make ail the proceeds of the mortgage payable to Mr. W. Shella Wilson testified that according to the electronic loan application, Relative B was referred to the Royal Bank by the Applicant The address given for the residence of Relative B was the same address of the Applicant at the time of his 2007 application for registration. Ms. Wilson confirmed that It has been determined that the documentation provided to the Royal Bank, including the letter confirming employment and income, and the bank account statements, were all false, The mortgage payments were made for just under a year then went into default. According to Ms. Wilson the bank suffered a significant loss as a result ofthis transaction, approximately $250,000. 7 Exhibits ab 1 ‘Exhibit Sb 11h pe $4 * Exhibits ib hg.40 Wiliam Hunter, an invastigator and inspector with RECO conducted a review of some hard drives obtained from Tagari Team brokerage sometime after it closed. This review revealed that the hard drives contained numerous bank statements, from numerous different banks, sometimes in the names of individuals and sometimes not. There were also statements of earnings and letters confirming employment for a number of individuals, although the employer was not identified in all cases. A number of these documents were found to be of particular interest, There was a letter confirming employment of an indvidual at a business RR Tax, Accounting & Financial Services which had the same address as the Tagari Team brokerage."” There was a bank statement(s) in the name of an individual for which there was no evidence that he was related or connected with the Applicant, yel the address was shown as the Applicant's ‘matrimonial home and the statements indicated deposits had been made into the account from ‘Shawn Graphics. There were pay stubs for two different employees of Shawn Graphics, namely Relatives C and D of the Applicant, both with an address which was the Applicant's family residence al the time."’ Lastly, there was a letter dated August 27, 2007, confirming the employment of Shahin Saleem as a Graphics Designer since March of 2000, allegedly signed by the Manager of an unidentified ‘company, with a contact number the same as the Applicant's cell number at that time."® Mr. Hunter testified that he could not confirm who had had access to the computer system, Relative B confirmed her signature on an authorization for the Royal Bank to debit her ‘Canada Trust Account the amount of $2,231.23 monthly."* Subsequently a request was made to change the mortgage payments to a Royal Bank Account. in cross- ‘examination Relative 3 was asked if she was paid by direct deposit while she was ‘working at the day care, to which she answered “Ya, | think’. ‘She was asked about her bank accounts and where the mortgage was paid from. She testified she had two accounts, the mortgage was paid from a Scotiabank account but she was not sure which one. In cross axamination Relative B confirmed that the bank statement of a Scotiabank account given to the Royal Bank, which showed a balance of $23,648.54, accurately reflected the amount of money Relative B had in the account." When it was put to her that the account statements were false the witness then indicated that she would have to check with her spouse, that she knew she had money in the account but she was not remembering how much and she did not want to commit to whether the amounts were accurate oF not Relative B was asked why she had provided the Applicant's telephone number in her pplication for ‘Habitaional Insurance’."® Her explanation was that she lives with her parents who do not speak English and are unable to talk on the phone and she could ‘not tel therm not to pick up the phone. Exhibit 10,p8:27 "Exhibit 11 tab 1 B83 Exhibit Wuab 168 Exhibit Sab 11 hype. 63 Exhibit Sb kp 39 "Exhibit Sab hing 12" Relative B testified that there were a couple of issues that prevented her from moving into Property 3 so she decided to rent it as two units. According to the witness the upstairs tenant was the Vendor she purchased the property from, who lived on lsabiity. This tenancy lasted for about one year. Then the property was damaged as a result of a fire, according to Relative B. The kitchen cupboards, floors and walls were damaged and the witness did not have unds to do the repairs so she just ‘let it go", The lower tenants moved out as well. The witness testified that she was not able to make an insurance claim for the damage to the property as the premium had not been paid. She acknowledged receiving a letter from the bank asking her to pay, but which she did not respond to it. The witness was not clear whether she had talked to the Applicant about this situation. Nor was she clear as to what ultimately happened to the property. When asked if the bank had sued her she responded *Not that | know’. The Applicant testified that he did not speak to Relative B at the time the property was sold ata loss, although he indicated he was aware that the tenant had left, Mr. John Perkins, a registrant, conducted an appraisal of Property 3 prior to it being sold Under power of sale in February of 2009. He described the property as being in ‘poor shape’. He did not note any damage by fie. After reviewing comparables Mr. Perkins ‘concluded that the market value of the property was $185,000.00. The listing created by the Applicant for this property in June of 2007 indicated the house was ‘completely renovated’ and had a dining room. It was Mr. Perkins evidence that the property had only been renovated in a rudimentary manner and did not have a dinning room. ‘The pictures taken of the property supported his comments. It was the Applicant's evidence that when he saw and listed Property 3 it was “updated Mr. Hunt reviewed the tile history of Property 4, a condominium unit.'” The property was transferred on November 6, 2002 for $136,500. It was listed for sale through the ‘Applicant on September 26, 2008 for $214,900. It was described as a “Completely Renovated Unit’. It was listed again in May 2007 for $184,900. On July 16, 2007, three days after Relative B purchased Property 3, she purchased Property 4 for $182.50 with a registered charge of $178,838. The Applicant acted for both the Vendor and his Relative B in that transaction. On October 23, 2009, the Property was sold under of power of sale for $130,000, Relative B testiied that she saw Property 4 before she purchased it and thought it was “not bad at all", that she liked the unit. However, it was two stories so she would not have lived in ii as one of her children was in a wheelchair on and off. Relative B testified that a friend had given her $4,600 and she obtained a mortgage, which she testified she thought was from the Royal Bank of Canada. In fact the mortgagee was Desjardins Credit Union Inc. The witness also confirmed that solicitor W, who acted on her behalf in her purchase of Property 3, acted for her in the purchase of Property 4 It was Relative B's evidence that she lost the property following problems that arose with the tenants. There had been four male tenants, all deaf and dumb. They paid rent Exhibit wb 3 "Eat 0b 6R for about a year and then there were problems with the appliances, and with ‘communication, and they moved out. Relative B was asked about Relative C and she indicated that Relative C lives in California. She was asked if relative C has purchased property and the witness indicated that it would be best to ask Relative C about that. ‘The Applicant testified that he believed the price Relative B paid for Property 4 was fair at the time. He suggested that when it was sold under power of sale it was listed as a 3 bedroom unit which was not accurate, the inference being that it was sold below its value. Conclusion ‘The Applicant's position with respect to the trades involving his Relative 8 and Properties 3 and 4, are that they were bona fide trades at the fair market value. Relative B at the time she purchased these two properties was separated from her husband, living with he parents with 3 dependent children, with a net income of approximately $2,100 a month. In a matter of 8 days she purchased two houses, borrowing in total approximately $565,906.38. She was unable to meet the payments required and both properies were sold by power of sale. ‘The Applicant did not suggest in his evidence that he was unaware of Relative B's situation. His counsel posed the question that if the Applicant was going to engage in fraud why would he involve a close relative? Clearly the Applicant was not operating with the interests of Relative B in mind, otherwise he would not have assisted her in Purchasing two properties which she could not afford, even assuming fraud was not invol ‘The Tribunal did not find the evidence of Relative B credible. Her explanation as to how she funded the purchases was inconsistent and confused, she did not know how much money she had, what accounts the mortgage was paid from, who the mortgagee of Property 4 was and at times her answers appeared so simple that the Tribunal could not but form the impression ‘hat she did not have the billy to orchestrate the purchase of these two properties on her own. ‘The Applicant is an experienced realtor. Relative 8 earns only a modest income. He would have to have known that someone eaming as litle as Relative B could not quality to borrow over half a milion dollars. To obtain financing false dacuments had to be created and the evidence before the Tribunal is that the investigations carried out on the hard drive of the Tagari Team computers revealed that sample bank statements, ‘employment letters, and paystubs similar to what was submitted on behalf of Relative 8 were kept on file. Finally, the description included in the MLS listing by the Applicant that Property 3 was ‘Completely Renovated! was, in the Tribunal's opinion, clearly untrue. In his testimony13 the Applicant indicated that when he saw the property it had been ‘updated; this is not the equivalent of ‘Completely Renovated’. The repott of Mr. Perkins confirms that there ‘were only rudimentary renovations. The Tribunal concludes that this description was Used to support the inflated value being placed on the home. The property had been on the market a number of weeks before Relative 8 purchased it. There is no evidence there were competing offers. Relative B paid almost the asking price for Property 3 although the Applicant would have known and Relative B would have seen that the property was not completely renovated. This does not make sense unless there was no interest in getting the house at the best possible price, which is how a bona fide purchaser would act ‘The same approach was used for Property 4. Its described as ‘completely renovated! and Relative B agreed to pay almost the asking price. ‘The Tribunal concludes that these two properties were listed at inflated prices and that the Applicant knowingly assisted his relative to purchase these properties at inflated prices. The Tribunal finds that the Applicant knew that Relative B would net be able to finance both these properties at the same time through legitimate means, and given Relative B's lack of sophistication and there being no indication that anyone other than the Applicant was involved with Relative B's purchase, and the fact that similar type bank statements and employment letters as those provided were on file, the Tribunal Concludes that itis more likely than not that the Applicant played a role in obtaining the ‘mortgage financing using false documents. Property 5 ‘This property was listed for sale by the Applicant on April 2, 2007, while he was still working for Homeward Really. On May 1, 2007, the Applicant transfered his registration under the Act to Tagari Team Realty and subsequently the isting of Property 5 was changed to that brokerage. The property was listed for $319,000. This price was eventually reduced to $305,500 on July 3, 2007. (On July 5, 2007, Relative C made an offer to purchase Property § for $305,000. There were a number of conditions set out in the offer. Notwithstanding that the Vendor and Relative C had both signed a ‘Confirmation of Co-operation and Representation’ agreement, which stated that the brokerage Tagari Team would represent the interests of both parties, the offer indicates that the brokerage acted only of behalf of the Vendor. ‘A ‘Registrant's Statement as a Buyer’ was also completed in this transaction. Relative CC was identified as being a broker representing the Tagarl Team although she was not a registrant atthe time. In that document Relative C declared "! am buying this proper (on (Sic) my sister (Sic) name because of guarantee sale within 90 days or! will buy it. ‘The brokerage was to receive $18, 00 in commission for this trade. enti 4 7 @