By Aleksandra Sagan
THE CANADIAN PRESS
VANCOUVER _ The bank accounts of a Toronto brokerage are frozen to protect consumer deposits after Ontario’s real estate professional regulatory body discovered “a substantial amount” missing.
The Real Estate Council of Ontario issued a freeze order for the first time in about six years on Nov. 1 against RE/MAX Right Choice Inc.
“This is very rare,” said RECO spokesman Daniel Roukema, who could not elaborate further on the sum of money in question.
The Toronto brokerage, located at Centerpoint Mall in the north part of the city, did not immediately respond to requests for comment and its website appeared to be down. A person with the mall’s answering service told The Canadian Press the office appeared to be closed, despite its hours indicating it should be open until 9 p.m. ET.
RECO discovered the discrepancy between how much money the brokerage should have held in trust in its accounts and the amount it possessed last week during a routine check, Roukema said.
People making an offer to buy a home in Ontario must provide proof of a deposit typically about five per cent of the sale price _ to the seller either when the offer is made or shortly thereafter. The brokerage of the realtor representing the buyer will hold the deposit in the brokerage’s real estate trust account until it must be paid to the seller on the closing date.
RECO froze the brokerage’s accounts to protect consumers from further harm, Roukema said.
It’s urging homebuyers and sellers who are involved with the agency or their lawyers to contact the council, he said.
“If anyone has deposited money, then they do have options to file a claim,” he noted. The Canada Deposit Insurance Corporation protects eligible deposits at its member financial institutions up to $100,000.
RECO’s investigation is ongoing and the council has not been in contact with police, Roukema said.
RE/MAX Integra, a sub-franchisor that represents about a third of the worldwide RE/MAX network, terminated Right Choice as one of its franchises Monday, Oct. 23 _ prior to RECO beginning its investigation, said Galen Wright, a consultant with Toronto-based FleishmanHillard’s reputation management practice, in an email.
“We recognize that buying a home is one of the most important decisions a person can make,” he said. “We pride ourselves on the values of honesty, fairness and accountability, and we support RECO in their efforts to protect consumers.”
RE/MAX Integra is unable to provide further details on why it terminated the brokerage’s contract, he said.
By David Paddon
THE CANADIAN PRESS
TORONTO _ When former financial planner Daniel P. Reeve was convicted this month of defrauding 41 investors out of about $10 million, it was a bitter lesson.
As with many financial frauds, the victims didn’t see it coming, and there’s little to no chance they will recover their money.
At the outset, Reeve sold legitimate products such as mutual funds and insurance. However, unbeknownst to clients, in 2007 he lost his insurance license and by 2008 he was no longer presenting himself as a financial planner, although people at his offices did have official designations.
Impressed by past performance, clients stuck by him.
In the meantime, Reeve begain directing investors to other investments, such as restaurants and hotels that he was developing, often promising little or no risk, despite the shakiness of his failing ventures.
“Yet, Daniel (Reeve) continued to flog his investments in the summer and fall of 2008 either knowing that the investors would never get their money, or not caring whether they would,” Justice Toni Skarica wrote in an Oct. 13 ruling.
Reeve pleaded not guilty to the charges of fraud and theft against him, but the judge did not believe his testimony and convicted him.
“This had a devastating impact on the victims,” says Crown prosecutor Fraser McCracken, who presented the case against Reeve through a trial in Kitchener, Ont., that spanned 18 months.
“That’s why we remind people to take steps to avoid fraud in the first place,” says Tyler Fleming, director of the Ontario Securities Commission’s Investor Office.
Fraud which depends on deceiving the victim comes in many forms and can be difficult to detect.
“The unfortunate reality is that the bad guys are always thinking up new ways to separate you and your money,” Fleming says.
But he says there are several warning signs that should raise red flags for investors:
_ Promises of big returns for little or no risk. (Generally low-risk investments have low potential returns.)
_ Advice based on “hot tips” and “insider
information.”(They’re usually false and potentially against the law
to act upon.)
_ Pressure to buy or decide quickly. (Haste is usually not in the investor’s best interest.)
_ Lack of registration with a provincial securities commission or other financial service regulator.
McCracken says the victims represented a cross-section of people with varying levels of education, investor sophistication and occupation.
Among the dozens of people who trusted Reeve’s record as a money-maker were:
_ A retired teacher who attended one of his investment presentations in early 2007. She and her husband wanted safe investments but lost at least $250,000.
_ The owner of an international trucking firm, who had been advised by Reeve since 1993 with good results until things began to unravel. He lost $683,000 in principal plus unpaid interest.
_ A nurse who asked in 2007 for safe investments, shortly before her husband died of pancreatic cancer. She lost $775,000.
Andrew Kriegler, CEO of the Investment Industry Regulatory Organization of Canada, stresses investors should always ask advisors who they are regulated by , and what their disciplinary history is.
He acknowledges that it’s not always clear where to look, but insists it’s always worth the time and effort..
“If it’s under our jurisdiction, then we can look into it. If it’s under somebody else’s jurisdiction, we will send that person to the right place,” Kriegler says.
IIROC operates two call centres in Toronto and Vancouver that take questions from the public.
The provincial commissions have a national registration search
for individual advisers and investment firms at
By Neil Bowen, Sarnia Observer
A man who traveled Ontario with a gang fabricating fake credit cards was jailed for nine months in Sarnia court.
Cris Castro, 45, formerly an Alberta resident, previously pleaded guilty to defrauding two Sarnia businesses, possession of stolen property and fraudulent use of credit cards but sentencing was delayed until Wednesday in Sarnia court.
Through a man Castro had met while custody in Alberta on unrelated charges he became involved with the fraud ring.
The crimes started in Montreal when the group used a fraudulent card to rent a vehicle for a trip to Alberta.
While heading to Sarnia to cross the border enroute to Alberta the group used stolen data stored on a cell phone and another device fabricate credit cards. The device could program the cards’ magnetic strips.
The group bought Rolex watches, designer clothes and sunglasses. The plan was to sell the goods in Alberta and use the cash to buy drugs. Castro was using the stimulant methamphetamine at the time.
The group tried to enter Michigan via the Blue Water Bridge. American authorities sent them back to Canada after finding the credit-card equipment.
In Canada they were arrested but Castro was released with conditions including staying away from the co-accused and a ban on possession of fraudulently-obtained cards.
Surveillance cameras recorded Castro violating both conditions when two local businesses were defrauded of $2,220.
“He can offer no excuses. . . Everything fell apart at the beginning of this year and he spiraled down,” said defence lawyer Nick Cake previously in support of a nine-month sentence.
It was a pre-planned, sophisticated identity-stealing operation but Castro was not the mastermind, said assistant Crown attorney David Nicol previously in support of the joint submission by Crown and defence lawyers for nine months.
A significant jail sentence was justified and could have been longer than nine months, said Justice Deborah Austin who had delayed sentencing for further presentations in support of the joint submission.
Castro’s minimal criminal record, his early guilty plea and not being a lead player in the operation allowed her to accept the joint submission, said Austin.
The nine-month sentence included the equivalent of 142 days of pre-sentence custody and will be followed by a year’s probation.
During probation Castro must take substance-abuse counseling while staying from others involved in the crimes and not having credit cards unless they are lawfully obtained in his own name.
By David Shipley, CBC News
The fallout of the Equifax data breach is going to be felt by companies, individuals and government for years to come.
This digital disaster will cause millions of people significant stress as they are dragged into a near never-ending battle with identity thieves.
It will cost billions to contain, and attempt to clean-up, and the proceeds of the crime will throw even more fuel onto the roaring fire that is global cybercrime.
What is Equifax and what happened?
Equifax is one of the big four credit bureaus — they rank a person’s worthiness to receive credit — things like car loans, mortgages, credit cards or sometimes even services such as telephone, cable and, in the US, even health care.
Their database includes personally identifiable information — names, addresses and most crucially, data like social security numbers in the US or social insurance numbers in Canada.
‘Companies aren’t yet required to report data breaches or disclose any information about such breaches. We are severely lagging behind many countries in this regard … ‘— David Shipley
In May, an unknown group successfully breached Equifax’s online services by exploiting a vulnerability in their web servers.
A software fix, called a patch for the vulnerability, had been available in March but was not put in place. Equifax only reported the breach last week. As many as 143 million Americans and reportedly as many as 44 million people in the UK are affected.
As of this weekend, all we know about Canada is that some people are affected, but no idea exactly how many or how much personal information has been compromised.
Reportedly 10,000 Canadian Automobile Association (CAA) subscribers in Canada have been notified that their information was included in the breach.
Why don’t we know more?
To be honest, it’s the result of gaping holes in Canada’s privacy legislation.
Companies aren’t yet required to report data breaches or disclose any information about such breaches. We are severely lagging behind many countries in this regard including the U.S. but leagues behind leaders like Europe.
We’ve passed some laws in 2015 regarding breach reporting, but haven’t brought the required regulations to support the law into force yet.
‘Firms of the size of Equifax aren’t going to change their behaviour for $100,000 fines,’ says Shipley.
Canada’s federal privacy commission issued a statement on Tuesday urging Equifax to provide this information to Canadians, pointedly noting they were first notified of the breach through media reports and have been “seized” with this issue.
The Commissioner says Equifax is “cooperating” with their office.
The privacy commissioner also took the unusual step of recommending Canadians not use the U.S. website Equifax has set up as it is only designed for use with U.S. Social Security numbers.
The new regulations under Canada’s digital privacy act will help a bit — they have fines of up to $100,000 for failing to report a breach like this, but fixed fines such as that have little impact on massive corporations.
What Canada should be doing?
Canada should move to adopt new European regulations called the General Data Protection Regulation or GDPR.
Fines under those rules can run up to $30 million Canadian or 4% of revenues, whichever is higher.
Those are numbers that are causing firms that do business in Europe to stand up, take notice, fix shoddy products and services and pay more attention to defending against attackers.
Firms the size of Equifax aren’t going to change their behaviour for $100,000 fines.
The bigger you are the easier you fall
Breaches such as what happened to Equifax happen every day for a combination of reasons ranging from people falling victim to scam e-mails, to delays in properly updating or patching software or servers, to not investing in appropriate security technologies or audits.
What many people don’t know or realize is that large firms have something called technical debt.
Technical debt begins to accrue when you build a new complex IT system — say a system for gathering and sharing people’s credit scores. Companies invest millions or even billions to build these systems and then launch them.
‘Sadly, there’s not much Canadians who now have to live with the mess created by the breach can do to prevent something awful from happening to their finances,’ says Shipley. ((iStock))
But over time, the technology ages.
If firms aren’t careful, the system they built can become vulnerable as more and more flaws are found in it over time.
If they don’t fix those bugs or flaws — which may cause further issues and can be time consuming, expensive or cause service outages — then as time goes on the probability of a data breach increases dramatically.
What can Canadians do?
Sadly, there’s not much Canadians who now have to live with the mess created by the breach can do to prevent something awful from happening to their finances.
Credit monitoring services help, but they can’t stop identity theft. They can only alert you that it’s happened or at best, in-progress.
Some of the better credit monitoring or identity theft services can go a bit further by assisting in recovering your identity and paying some of the legal costs, but at the end of the day a lot of stress and harm can be caused by a data breach.
‘The bigger, longer-term issue that the Equifax breach has cast a spotlight on is the obsolescence of the social insurance number … ‘— David Shipley
In the U.S., there is an option for a credit freeze, though it can cost you money and take many steps to get in place.
Americans can ask the four major credit bureaus including Equifax not to provide their information to anyone, which will stop anyone from trying to get a car loan or credit in their name if the financial institution or service provider requires a credit check.
But that option really doesn’t exist in Canada.
Some of the bureaus do allow you to flag your account requiring additional ID or someone to contact you to approve any new credit applications, which may be helpful, but not all have that option and it’s not something that’s easy to figure out.
Moving past the SIN
The bigger, longer-term issue that the Equifax breach has cast a spotlight on is the obsolescence of the social insurance number and the need for a new secure form of unique personal digital identifier for government and commercial services.
We have to stop using a nearly 50-year-old approach that just doesn’t work in a 21st-century digital environment that’s full of cyber threats.
Efforts such as New Brunswick’s experiments to create a new secure digital ID are a step in the right direction.
TORONTO _ The Toronto Transit Commission says one current and nine former employees are facing criminal charges in connection with an alleged multimillion-dollar insurance scheme.
The TTC announced the charges Thursday as part of an ongoing investigation by the police and the public transit agency into false health benefit claims.
To date, the TTC says 150 employees have been fired, retired or resigned to avoid dismissal as a result of the investigation, which started in 2014.
All 10 people charged face one count of fraud over $5,000. Of the 10, one is an employee on medical leave.
The allegations centre around Healthy Fit, a Toronto orthotics store, which allegedly provided some or no products that were invoiced to Manulife Financial, the TTC’s insurance provider at the time.
It’s alleged that Healthy Fit then shared the insurance payments with TTC workers involved in a $5-million scheme.
The TTC says it anticipates more employee dismissals as it continues its investigation.
“The TTC has insurance to protect itself against financial loss due to benefits fraud,” the transit agency said in a statement. “Nevertheless, restitution is being sought from anyone who made an improper claim against the TTC’s benefits plan.”
The Hamilton-Niagara Regional Detachment of the Royal Canadian Mounted Police (RCMP) – Financial Crime Section have arrested and charged 48 year old Naeem AKHTAR from Markham, Ontario with Fraud and Money Laundering. The value of the fraud is presently estimated at this time to exceed $3 million dollars.
The scheme involved over one hundred false identities used to obtain credit cards and other loans from Canadian financial institutions. Known as a make-up, pump-up, run-up scheme, the suspect created an elaborate network of false identities and shell companies. The fake identities used included false Ontario driver’s licenses or actual Province of Ontario driver’s licenses created using fake foreign passports, fake Social Insurance Cards or false Canadian Permanent Resident cards. This differed from traditional identity theft in that the personas created did not exist at all, which poses a threat to the Government of Canada’s systems and programs as well the integrity of Canada’s financial institutions.
Credit was created using the fake identities with falsified employment records and paystubs from the shell companies controlled by AKHTAR. The credit was increased by patiently accepting credit increases over the years. The shell companies were used to launder the proceeds of the crime by creating false invoicing for the fraudulent credit cards.
The scheme was further complicated by the use of postal mail forwarding services. Through this AKHTAR was able to provide dozens of seemingly unrelated and innocuous addresses on credit applications but the mail would actually be redirected to rental mailboxes controlled by him. AKHTAR is scheduled to appear in court on August 15th, 2017 in Newmarket, Ontario.
This investigation was assisted by proactive work from the anti-money laundering and corporate security units at Canadian Tire Bank, Canadian Imperial Bank of Commerce, The Bank of Montreal, TD Bank, Royal Bank, Scotiabank, and the Ontario Ministry of Transportation. The RCMP would also like to thank the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) for its collaboration in this investigation.
“The creation and use of synthetic identities by criminals to enrich themselves is a threat to all Canadians and poses a significant risk to Canadian government programs and financial institutions. This investigation is an example of the effective partnership between the RCMP, FINTRAC and Canadian Financial Institutions. The RCMP is committed to working together with our partners to combat this type of fraudulent activity by criminals who only seek to enrich themselves at the expense of Canadians” said Inspector Todd Gilmore, Southwest District Commander.
The investigation is ongoing.
Website: RCMP in Ontario
SOURCE Royal Canadian Mounted Police