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Yarmouth mortgage fraud case leads to a fine, court costs of $50,025 against company

novanewsnow.com | July 7, 2015

By Tina Comeau

YARMOUTH – A limited numbered company has been ordered by the court to pay $50,025 in a fine and court costs after a guilty plea was entered to a charge of defrauding financial institutions of money by submitting false mortgage applications.

The offence against 3070763 Nova Scotia Limited (10304 Highway 3, Arcadia) dates back to having occurred between Jan. 20, 2006 and Aug. 3, 2009, although the charge was only sworn with the court on Feb. 4 of this year.

A sentencing took place in Yarmouth Provincial Court on June 15, in which the judge handed down a fine of $43,500 and victim fine surcharge costs of $6,525.

The charge the company pleaded guilty to reads that it did “by deceit, falsehood or other fraudulent means, defraud Canadian financial institutions of money by facilitating the submission of false mortgage applications of a value exceeding $5,000 contrary to section 380(1)(a) of the Criminal Code.”

A search of the province’s Registry of Joint Stock Companies last week listed Wade Doucette as the current director, president, secretary and recognized agent of the numbered limited company.

On the day of the sentencing, Wade Doucette and Genesta Marie Doucette’s names were listed on the court docket alongside of numerous counts of fraud allegations. Those charges were laid in 2011 when the RCMP’s Commercial Crime Section charged 11 people with a total of 147 charges that the police alleged at the time to be a mortgage fraud scheme.

In court on June 15, the Crown said it was not proceeding with the charges against Wade Doucette and Genesta Doucette, offered no evidence before the court and all of the charges were withdrawn against these two individuals.

“My clients are glad that this is behind them,” said their lawyer Phil Star, who noted due to the complexity of the charges, these cases have been before the court for years.

Star was the defence lawyer for the sentencing of 3070763 Nova Scotia Limited. He said he wouldn’t define the case as straightforward mortgage fraud, but rather as “mortgage fraud allegations.” He said there had been letters provided to banks, “which made it look like borrowers were getting money from other people, like their parents or that type of thing, when in fact some of the money they were coming up with was coming from that numbered company.

“The nature of the crown allegation is that the mortgage applications may not have been granted or approved but for these letters,” Star said. “That’s the alleged fraud.”

Star said his recollection from the sentencing was that no numbers were mentioned “as to what loses, if any, the banks sustained.”

“As you can appreciate, a mortgage application could be granted, hypothetically, fraudulently, but the alleged victim could still, hypothetically, lose no money if the mortgages are in fact paid,” he said.

The Vanguard sought comment from the Crown about the recent June 15 sentencing but did not hear back from him.

When the RCMP laid its charges in June 2011, following a three-year investigation, the RCMP said at that time they believed the total value of the fraud stemming from all of the 147 charges to have been around $6 million.

Of the charges laid, Ray Michael Nelson faced the most with 96. In March 2013, the former real estate broker was fined $8,000 and had to pay $1,200 in court costs after pleading guilty to a charge of uttering forged documents, which involved mortgage documents and applications from years earlier. Rather than proceeding with all of the individual charges, the counts against him were merged, resulting in a 10-count list of charges. The charge Nelson pled guilty to stated that between Jan. 31, 2006, and Oct. 23, 2008, he did knowingly cause financial institutions to use forged documents, as if they were genuine, for properties in the Yarmouth area.

At the time of the sentencing his lawyer said other people involved in the industry, such as appraisers and lenders, were not as diligent as they should have been in dealing with transactions that had come before them. But the lawyer also said Nelson suspected financial figures listed on documents were false and inflated but he still passed them on to financial institutions.

The RCMP’s investigation into mortgage activity was still underway in 2009 when a housing situation came to a head in Yarmouth and tenants found themselves being turned onto the street by landlords who were unable to keep up with utility bills and mortgage payments. That same year the Yarmouth Vanguard had looked into properties that had had mortgages reassigned to them and found in some cases the mortgages were up to three or four times what the assessed value of the properties were.

 

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