CONSUMER WARNING – Allegations of Forgery, Odometer Tampering, Fraudulent Vehicle Transfers & Illegal Sales

Allegations of forgery, odometer tampering, fraudulent vehicle transfers and illegal sales has resulted in the IMMEDIATE SUSPENSION of KK Motors Canada Inc., 6295 Mississauga Rd, Unit 215A, Mississauga, and of Kajendran Kasippillai, KK’s sole officer and director, by Ontario’s regulator of vehicle sales, OMVIC. As a result, KK Motors Canada Inc. and Kasippillai may not legally sell, lease, buy or consign vehicles.

OMVIC found the dealer purchased insurance write-offs from salvage auctions. These vehicles were repaired and sold to consumers, often not by KK Motors directly, but rather by unregistered businesses or individuals working for, or with, the dealer. “OMVIC believes that in order to distance themselves from these vehicles, KK Motors Canada Inc. forged documents and fraudulently transferred these vehicles into the names of past customers, prior to making the vehicles available for sale by the unregistered businesses and individuals, ” states John Carmichael, OMVIC CEO and Interim Registrar. “Most purchasers didn’t know about KK Motors; they thought they were buying the vehicles privately.”

Of 13 vehicles OMVIC investigated, six appeared to have rolled-back odometers. One, a 2007 Honda Odyssey was sold in June by one of KK Motors’ associated sellers with an odometer reading of 141,411 kms; four months earlier the mileage for the Odyssey was reported as 335,230 kms. “OMVIC is alleging the fraudulent manipulation of odometers was done by, or on behalf of, KK Motors Inc.,” explained Carmichael.

An investigation of the unregistered businesses and individuals who actually sold the vehicles is ongoing.

Dealer’s Past-History

KK Motors Canada Inc. and Kajendran Kasippillai have a past history of non-compliance: in 2012 the dealer was found in breach of the Motor Vehicle Dealers Act and fined $1,500 for advertising a vehicle without disclosing in the ad that it had been placed by a registered dealer.  Additionally, the dealer was found to be in breach of OMVIC’s Code of Ethics and fined $5,000 in 2014 for failing to properly disclose material facts related to the past use, history and condition of vehicles it sold, including significant accident repair histories.

Immediate Suspensions

OMVIC only issues an immediate suspension order when the regulator believes a dealer’s conduct may place the car-buying public at risk. Note: a dealer may appeal an Immediate Suspension Order and a hearing will be held within 15 days before the Licence Appeal Tribunal (LAT). The Tribunal will determine if the order should be extended until a final determination is made regarding the associated Proposal to Revoke Registration.

Advice to Past Customers of KK Motors Canada Inc.

OMVIC encourages consumers who have previously purchased from KK Motors Canada Inc. or Kajendran Kasippillai to have their vehicle inspected by an independent mechanic for problems not disclosed by the dealer/salesperson. Consumers should also consider purchasing a Used Vehicle Information Package (UVIP) available from ServiceOntario, or a CARPROOF/CARFAX Canada Vehicle History Report to check odometer histories.

OMVIC also encourages previous KK Motors Canada Inc.’s customers to run a credit check to ensure that their name/identity was not used fraudulently, and to visit any ServiceOntario location to purchase a ‘personal history’ report of all vehicles that have been registered to them. This is sometimes referred to as a personal RIN search. The cost is $12.

CONSUMERS ARE WARNED not to buy or lease vehicles from, or sell or consign vehicles to, KK Motors Canada Inc. or Kajendran Kasippillai while the dealer’s registration is suspended. Consumers who trade with an unregistered business or individual are not protected by the Motor Vehicle Dealers Compensation Fund.

Consumers with questions or concerns should contact OMVIC’s Complaints and Inquiries Team at: 1-800-943-6002×3942.

About OMVIC Registration
Ontario’s Motor Vehicle Dealers Act (MVDA) requires all dealers and salespeople be registered with OMVIC. Unregistered selling (curbsiding) is a serious offence: individuals convicted of curbsiding can be fined $50,000 and/or be jailed for up to two years less a day.

About OMVIC
OMVIC (Ontario Motor Vehicle Industry Council) administers and enforces the Motor Vehicle Dealers Act (MVDA) on behalf of the Ministry of Government and Consumer Services. OMVIC maintains a fair and informed vehicle sales marketplace by regulating dealers and salespersons, regularly inspecting Ontario’s 8,000 dealerships and 27,900 salespeople, maintaining a complaint line for consumers and conducting investigations and prosecutions (or discipline proceedings) of industry misconduct and illegal sales (curbsiding). OMVIC also administers the Motor Vehicle Dealers Compensation Fund on behalf of its Board of Trustees.

About the Motor Vehicle Dealers Compensation Fund

The Motor Vehicle Dealers Compensation Fund is funded by Ontario’s registered motor vehicle dealers and provides compensation to consumers who have a valid claim against an Ontario-registered dealer. Qualifying consumers may be eligible to receive up to $45,000 for each valid claim to the Compensation Fund. Since its inception on July 1, 1986, the Compensation Fund has paid out more than $5 million to consumers.

SOURCE Ontario Motor Vehicle Industry Council (OMVIC)

Five of six Montreal area men get bail in alleged lottery scam

By Pierre Saint-Arnaud

THE CANADIAN PRESS

MONTREAL _ Five of six Montreal-area men charged in an alleged lottery scam involving Americans have been granted bail.

The six are facing extradition to the United States to face charges related to the alleged fraud of US$1.35 million between 2011 and 2013.

They are aged between 53 and 72.

The five who were freed in Montreal on Friday had to post bail ranging from $8,000 to $20,000, while the sixth will seek bail on June 14. Their extradition proceedings are scheduled to resume July 6.

They also face a curfew between 11 p.m. and 7 a.m. and must report to the RCMP once a week.

One woman from Pennsylvania who is among the alleged victims of the lottery scheme has previously testified she lost nearly US$300,000.

Court documents provide similar testimony from two other alleged victims in Pennsylvania as well as two from California, and one each from Massachusetts and Oregon. They were all led to believe they had won a Canadian lottery.

The documents allege the Pennsylvania woman was first targeted in November 2011, when a man identifying himself as a Canadian-based attorney told her she had won $80,000 in a lottery in Canada.

But before she could receive the prize, she was allegedly told she had to pay taxes and customs fees totalling $8,000. The fees could be paid through Western Union and/or MoneyGram.

After she wired that amount, an individual who claimed to be a U.S. customs officer allegedly contacted her and said the prize was actually $800,000, meaning additional taxes of more than $88,000.

The court documents allege she was then contacted by another person claiming to be an agent with the Internal Revenue Service. She was told there was an additional $900,000 lottery prize but again had to pay taxes and fees before she could collect. The woman was also provided with lenders to help her pay for the additional fees.

In the end, the American lost about $295,000 _ her life savings _ because of the allegedly fraudulent sweepstakes.

The fraud artists allegedly used prepaid cellphones to call the Americans and then tell them to send money to cover taxes, transfer fees and insurance.

The phones were obtained and listed under fictitious names.

The six accused, who allegedly conspired with one another, were arrested at the request of prosecutors in Pennsylvania.

American authorities allege the group was part of a network that operated out of Montreal from May 2011 through at least October 2013.

The alleged victims never received the winning lottery money they were promised.

The recent arrests came after a three-year inquiry that involved the RCMP and Quebec provincial police.

It was part of a U.S.-Canada initiative known as “Project COLT,” which targeted telemarketers.

BMO and CIBC’s Simplii warn fraudsters may have accessed clients’ data

Two of Canada’s biggest banks warned Monday that “fraudsters” may have accessed certain personal and financial information of up to 90,000 customers.

The Bank of Montreal said hackers contacted the bank on Sunday claiming to be in possession of the personal information of fewer than 50,000 customers and threatened to make it public.

“We became aware of unverified claims that customer personal and financial data may have been accessed by a fraudster,” said spokesman Paul Gammal in an emailed statement Monday, May 28, 2018.

“A threat was made. Our practice is not to make payments to fraudsters. We are focused on protecting and helping our customers,” he said.

The bank said it believes the attack originated outside Canada, but did not elaborate on the type of data they accessed.

Gammal said the bank is conducting a thorough investigation and is working with the relevant authorities.

The disclosure followed a warning from CIBC’s direct banking brand Simplii Financial that also said “fraudsters” may have electronically accessed certain personal and account information for approximately 40,000 Simplii Financial clients.

Simplii said Monday it learned of the potential issue on Sunday and has implemented additional online security measures such as enhanced online fraud monitoring, adding it is working with the relevant authorities.

Gammal said the potential breach at BMO appears to be related to the CIBC issue. Royal Bank, Scotiabank and Toronto-Dominion Bank said they have no indication they were affected.

Both BMO and CIBC said they will be contacting clients, and recommended that customers monitor their accounts and notify their financial institution about any suspicious activity.

“We are investigating to determine the validity of the claims and the type of the information that may have been accessed,” CIBC spokesman Tom Wallis said in an emailed statement.

Minister of Finance Bill Morneau has spoken to the chief executives of the affected institutions, ministry spokeswoman Jocelyn Sweet said.

“We are monitoring the situation closely with the Office of the Superintendent of Financial Institutions,” she said in an emailed statement. “The situation is being investigated by the institutions in collaboration with law enforcement.”

The Office of the Privacy Commissioner said Monday that both financial institutions have notified it about the issue.

“We are working with the organizations to better understand what occurred and what they are doing to mitigate the situation,” said spokeswoman Valerie Lawton in an email.

“At this point in time, we are in contact with the companies; we have not opened a formal investigation.”

Simplii said Monday that clients who are victims of fraud because of the issue will receive 100 per cent of the money lost from the affected bank account. It added that there is no indication that clients who bank through CIBC have been affected.

CIBC launched Simplii in November and absorbed the accounts of some two million President’s Choice Financial account holders. CIBC had provided the back-end banking services for PC Financial for nearly 20 years, but last August the bank struck a deal with PC’s parent company Loblaw to go their separate ways.

The potential data breaches reported by Simplii and BMO on Monday are the latest cybersecurity incidents involving Canadians.

Last fall, credit reporting service Equifax notified the public that hackers accessed or stole the personal data of 145.5 million U.S. customers and 19,000 Canadians. In January, Bell Canada warned some of its customers that their information, such as names and email addresses, had been illegally accessed in a data breach.

In November, ride-sharing company Uber said hackers stole names, email addresses and cellphone numbers of millions of riders. Uber in December said that 815,000 Canadian riders and drivers may have been affected as part of the worldwide data breach.

New federal data breach regulations which would require mandatory reporting of security breaches are set to take effect on Nov. 1.

The regulations require organizations to determine if a data breach poses a risk to any individual whose information was involved and then to notify the federal privacy commissioner and affected individuals “as soon as feasible.” Previously, companies that had been hacked had been alerting the public on their own timeline.

Six Montrealers facing extradition to the U.S. for alleged fraud

A Pennsylvania woman who is among the alleged victims of a lottery scheme involving six Montreal-area men has testified she lost nearly US$300,000.

The six are facing extradition to the United States to face charges related to the alleged fraud of US$1.35 million.

Court documents provide similar testimony from two other alleged victims in Pennsylvania as well as two from California, and one each from Massachusetts and Oregon. They were all led to believe they had won a Canadian lottery.

The documents allege the Pennsylvania woman was first targeted in November 2011, when a man identifying himself as a Canadian-based attorney told her she had won $80,000 in a lottery in Canada.

But before she could receive the prize, she was allegedly told she had to pay taxes and customs fees totalling $8,000. The fees could be paid through Western Union and/or MoneyGram.

After she wired that amount, an individual who claimed to be a U.S. customs officer allegedly contacted her and said the prize was actually $800,000, meaning additional taxes of more than $88,000.

The court documents allege she was then contacted by another person claiming to be an agent with the Internal Revenue Service. She was told there was an additional $900,000 lottery prize but again had to pay taxes and fees before she could collect. The woman was also provided with lenders to help her pay for the additional fees.

In the end, the American lost about $295,000 _ her life savings _ because of the allegedly fraudulent sweepstakes.

The fraud artists allegedly used prepaid cellphones to call the Americans and then tell them to send money to cover taxes, transfer fees and insurance.

The phones were obtained and listed under fictitious names.

The six accused, who allegedly conspired with one another, range in age from 53 to 72 and were arrested at the request of prosecutors in Pennsylvania.

American authorities allege the group was part of a network that operated out of Montreal from May 2011 through at least October 2013.

The alleged victims never received the winning lottery money they were promised.

The recent arrests came after a three-year inquiry that involved the RCMP and Quebec provincial police.

It was part of a U.S.-Canada initiative known as “Project COLT,” which targeted telemarketers.

RCMP investigators say the accused are to appear in Quebec Superior Court in early June.

New ICBC survey shows that customers believe society simply tolerates people who commit insurance fraud

Source: ICBC

Results from a new ICBC customer survey* shows that 47 per cent of customers feel that committing auto insurance fraud is an accepted practice in B.C. In fact, 79 per cent believe that up to half of all claims made with ICBC contain an element of fraud.

While ICBC knows that the vast majority of its customers are honest, and that industry estimates say that fraud affects only about 10 to 20 per cent of all claims, the perception that British Columbians condone insurance fraud is troubling.

The survey showed that respondents:

  • believe that most ICBC claims contain an element of fraud,

  • have heard stories from other people of someone committing fraud (54 per cent), and

  • and personally know of someone who has intentionally committed fraud against ICBC (17 per cent).

    “It’s disturbing to hear from our customers that they feel our society has gotten to a point where committing fraud is simply accepted,” said Chris Fairbridge, manager of ICBC’s Special Investigations Unit. “To us, small lies and the exaggeration of truth are serious offenses and will not be tolerated. B.C. drivers are financially impacted by every case of insurance fraud, and we need the public’s help to identify and report fraud as soon as they suspect it.”

    The most common examples of fraudulent claims that ICBC sees are exaggerating the extent of injuries or damage to a vehicle, claiming old damage, claiming an inability to work despite having fully recovered from a crash, excluding a previous medical condition and providing a false or misleading account of how a crash happened.

    Last year, ICBC’s Special Investigations Unit completed more than 16,000 investigations for suspected fraud, of which 54% were found to contain an element of fraud. Guilty individuals have served jail time, paid substantial fines, had their claim denied or reduced, paid for the other party’s repair costs, denied future optional coverage and entered into a restorative justice program.

    “From using technology to catch anomalies, training our adjusters to sniff out scams and expanding our investigation team to catch fraud in the act, ICBC continues to ramp up its efforts to put an end to these dishonest acts, large and small,” said Fairbridge.

    Insurance industry studies estimate that fraudulent and exaggerated claims make up about 10 to 20 per cent of all claims costs, potentially adding more than $100 to everyone’s annual ICBC auto insurance bill.

    British Columbians can report suspicious activities related to insurance fraud to ICBC’s toll-free tips line at 1-800-661-6844 or submit a tip online. Tip information is confidential and callers can remain anonymous. For more information, visit icbc.com/fraud.

    *Survey conducted by ICBC through its Customer Advisory Panel. Total respondents = 1,373. Data collected April 12 – 19, 2018. 

Founder of Chinese company with billions in B.C. assets gets 18 years for fraud

SHANGHAI _ A court in Shanghai sentenced the founder of the Chinese insurance company that owns New York City’s Waldorf Hotel to 18 years in prison on Thursday after he pleaded guilty to fraudulently raising billions of dollars from investors, state media reported.

Shanghai’s No. 1 Intermediate People’s Court also ordered the confiscation of 10.5 billion yuan ($1.6 billion) in assets from Wu Xiaohui, the former chairman of Anbang Insurance Group, which had gained a reputation for ambitiously expanding into hotels, real estate and insurance from Canada to South Korea.

Wu, who founded privately owned Anbang in 2004, has been accused of misleading investors and diverting money for his own use. He was detained last year and regulators seized control of Anbang in February. He was shown on state TV in March admitting guilt.

Wu initially had denied his guilt at his one-day trial, according to an earlier court statement.

According to Xinhua, Wu concealed his ownership of shares in companies controlled by Anbang, filed false statements with financial authorities and lured investors by offering rates of return above that offered elsewhere. Much of the business relied on selling insurance products to raise investment capital.

It said he used more than 100 companies under his control to manage funds and authorities later recovered bank savings, real estate and other assets. Wu used his position to misappropriate 10 billion yuan ($1.5 billion) in Anbang’s deposits, according to Xinhua’s lengthy report.

Xinhua said the court determined the length of the sentence according to the facts of the case, the severity of the crime, and its “degree of social harm.” It said more than 50 people were present at the sentencing, including Wu’s relatives and journalists.

Anbang last month said it was receiving a $9.6 billion bailout from a government-run fund. That would mean the government fund owns 98 per cent of the company, wiping out most of the equity stake once held by Wu and other shareholders.

The company had engaged in a global asset-buying spree in recent years, raising questions about its stability. Anbang discussed possibly investing in a Manhattan skyscraper owned by the family of U.S. President Donald Trump’s son-in-law and adviser, Jared Kushner. Those talks ended last year with no deal.

The negotiations with Kushner Cos. about 666 Fifth Ave. prompted members of the U.S. Congress to raise ethics concerns.

The Anbang case is one of a string of scandals in what had been a stodgy Chinese insurance industry long-dominated by state-owned insurers. The industry’s former top regulator was charged in September with taking bribes and other insurers have been accused of reckless speculation in stocks and real estate.

The Communist Party has made reducing financial risk a priority this year after a surge in debt prompted rating agencies last year to cut Beijing’s credit rating for government borrowing.

Anbang is being run by a committee of officials from China’s insurance regulator, central bank and other agencies. They have said its obligations to policyholders and creditors are unaffected.

Over the years, Anbang grew to more than 30,000 employees with 35 million clients. It diversified into life insurance, banking, asset management, leasing and brokerage services.

Speculation is rife over possible sales of Anbang’s assets, which, in addition to the iconic Waldorf purchased for almost $2 billion include Dutch insurer Vivat NV, the San Francisco Westin St. Francis and hotels, real estate and insurance holdings in Canada, Belgium and South Korea.

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