Bhaktraj Singh is a Canadian businessman who has faced several charges of fraud after he was caught running a major Mortgage fraud scheme.
The FSCO, Canada’s premier regulatory authority, took stringent action against the scammer.
Who is Bhaktraj Singh and What he Claims to Be:
Bhaktraj Singh is a scammer. However, he claims to be a responsible entrepreneur.
Hazelton Group, a business that oversees the construction of mid-rise residential condominium developments, is led by Bhaktraj Singh as CEO. In his role, Singh is responsible for managing all facets of Hazelton Group projects, from land selection and acquisition to delivery and registration. The employment of architects, engineers, planning consultants, construction management, and sales/marketing teams to carry out each project is also largely handled by him.
Details About the Mortgage Fraud Investigation into Bhaktraj Singh
The Ontario Provincial Police (OPP) is investigating fraud allegations involving syndicated mortgage investment funds at Bhaktraj Singh’s Tier 1 group of companies, according to a Globe & Mail report from November 8, 2017.
The mortgage pools, according to a Globe & Mail article, “raised $119 million from 1500 investors to fund a development company seeking to build condominiums and student apartments.”
The Financial Services Commission of Ontario Act, 1997 (FSCO Act), which formed FSCO, also outlined its legal scope.
The purpose of FSCO’s legal mandate is to offer regulatory services that uphold public trust in the industries it oversees while safeguarding the public interest.
The Ontario co-operative corporations, the insurance industry, pension plans, loan and trust businesses, credit unions, the mortgage industry, and service providers who bill auto insurers for statutory accident benefits claims are all governed by the FSCO. The Ministry of Finance is responsible for the FSCO.
The FSCO Act establishes a three-part organization for FSCO, which consists of the Commission, the Superintendent of Financial Services and Staff, and the Financial Services Tribunal, in order to support the legal mandate for FSCO (Tribunal).
Guyana man under investigation for mortgage fraud in Canada
One of the mortgage brokers under investigation in Ontario for syndicated mortgages that caused significant losses for small investors and raised concerns about the regulator’s actions is Guyanese businessman Bhaktraj Singh, who lives and works in Canada.
According to a Globe & Mail article from November 8, 2017, the Ontario Provincial Police (OPP) is looking into claims of fraud surrounding the use of syndicated mortgage investment funds at Singh’s Tier 1 group of firms.
As per the Globa and the mail report – “The mortgage pools raised Cdn$119 million from 1500 investors to fund a development group planning to build condominiums and student residences.”
The OPP’s anti-rackets branch is reportedly looking into a condominium project at 28 McMurray St. W. in Bracebridge, Ontario, which was one of the developments financed by the syndicated mortgage loans, according to a report by accounting firm Grant Thorton, which was appointed trustee for the mortgage investors.
According to the report, the OPP wrote to investors in the McMurray project to let them know that it is looking for victims and witnesses who will cooperate with the investigation.
The Royal Canadian Mounted Police (RCMP) was also alerted about the matter, according to Grant Thornton. According to the trustee’s report, police will likely seek the names of investors in the other, connected projects as the investigation progresses and it is asking the court for permission to provide the names of investors in the McMurray loans.
According to Toronto attorney David Franklin, who is representing investors who lost money in the Tier 1 mortgage pools, the OPP was informed about the issue because Franklin felt that it indicated that investors had lost money as a result of fraud.
Franklin asserted that he thinks the Financial Securities Commission of Ontario (FSCO) waited too long to act on complaints of impropriety that had existed for years, and as a result, the majority of the investors’ money was lost.
Court documents state that FSCO revoked the two mortgage broker businesses’ licenses in October 2016 following an inquiry that revealed they had offered and promoted mortgage investments in contravention of the laws governing mortgage lending. Singh, a top executive at the mortgage broker firms that were promoting the syndicated loans, was allegedly involved in a number of conflicts of interest, according to FSCO.
“Mr. Singh fills several roles in respect of both the development projects and the syndicated mortgage transactions.
He is a director, officer, and sole shareholder of Tier 1 Transaction, which is engaged in unlicensed activity including the solicitation of borrowers and lenders on the security of real property, the provision of information about a prospective borrower to a prospective lender, the assessment a prospective borrower on behalf of a prospective lender and the negotiation or arrangement of a mortgage.
Mr. Bhaktraj Singh is also a licensed mortgage agent authorized to deal or trade in mortgages for First Commonwealth, a shareholder of several of the borrower development companies in the syndicated mortgage transactions. He is the sole director, officer, and shareholder of the special purpose trustee corporations incorporated to hold and administer the mortgage on behalf of the investors.
Finally, Mr. Bhaktraj Singh has an ownership interest in the borrower companies. In contravention of the Act, these conflicts of interest and interrelationships were not disclosed to investors and give rise to significant risks to investors because Mr. Bhaktraj Singh, through the special purpose trustee corporations, is required to administer and enforce the mortgages on behalf of the investor as against the entities in which he enjoys an economic interest”.FSCO
According to the Globe and Mail report, Grant Thornton, which is in charge of 11 companies that held mortgages issued with the money of investors, stated in court filings that it had come to the conclusion that most of the companies had loans outstanding for projects carried out by the Davies Developers, a group led by real estate developer John Davies. Singh was among the group, along with others.
The trustee petitioned the court earlier this year to name KSV Kofman Inc. as receiver to take possession of the eight Davies Developers properties.
In a report submitted to the court in June, KSV found that while millions of dollars were paid to the Davies Developers group in management fees, consulting fees, dividends, and loans, only a small portion of the money borrowed from the investors appeared to have been used for its intended development purposes.
According to Reuters, worries concerning syndicated mortgages have prompted inquiries about what the FSCO did.
According to the report, regulators were looking into syndicated mortgages connected to Fortress Real Developments in June 2014 because the company was a prominent player in Canada’s multibillion-dollar market for hazardous investments. It said that compliance officers at FSCO had evidence that syndicated mortgages were being marketed and sold in ways that broke the law, putting the savings of thousands of Canadian small investors in danger.
According to Reuters, the compliance officials discovered that brokers connected to Fortress were suggesting to clients that they place their investments in retirement savings accounts managed by a trusted company that lacked an Ontario business license. The team came to the conclusion that the Olympia Trust Co.’s operation without an Ontario license and the brokers’ recommendation of Olympia Trust Co. both constituted violations of provincial law.
According to the individuals and records, the compliance officers informed FSCO investigators of their findings and later suggested that Olympia be ordered to cease operations in the province with the largest population in Canada.
According to Reuters, the FSCO’s investigators took no action. In May 2015, their boss, Executive Director for Licensing and Market Conduct Anatol Monid, determined that there was insufficient proof to move on with the document show.
According to Reuters, that choice was part of a wider, more alarming pattern. According to Reuters, it was discovered that senior FSCO investigators from 2011 to 2015 repeatedly rejected or disregarded compliance officers’ requests that the organization look into or take action to stop the promotion and sale of Fortress syndicated mortgages.
Since then, mounting investor outcry over the products has drawn attention from the public and the government to FSCO’s inadequate market oversight, according to Reuters. According to regulatory sources, over 20,000 retail investors have invested up to Cdn$1.5 billion (US$1.17 billion) in syndicated mortgages over the previous ten years, primarily in Ontario. Around 90% of those assets, according to Reuters sources, have lost money or are in danger of doing so, and more than half of those investments are in Fortress ventures.
FSCO takes action against Bhaktraj Singh for improper practices involving syndicated mortgages.
The Ontario Financial Services Commission (FSCO) is dedicated to safeguarding customers. FSCO takes its responsibilities seriously, and we will keep taking legal action against those who break the law.
With this in mind, the Superintendent of Financial Services has issued a cease and desist order against Tier 1 Transaction Advisory Services Inc. and has suspended the licenses of Tier 1 Mortgage Corporation, First Commonwealth Mortgage Corporation, Bhaktraj Singh, Jude Cassimy, and Dave Balkissoon for practices that contravene the Mortgage Brokerages, Lenders and Administrators Act, 2006, arising in certain syndicated mortgage transactions.
Mortgage brokers and agents are no longer permitted to conduct business on behalf of these entities as a result of the FSCO’s enforcement actions, beginning immediately. Until you are sponsored by a mortgage brokerage that is “active” and “allowed to sell,” your license will be deemed “inactive” if you are an agent or broker sponsored by Tier 1 Mortgage Corporation or First Commonwealth Mortgage Corporation.
An ongoing investigation is focused on Bhaktraj Singh and other individuals linked to a multi-million dollar Canadian syndicated mortgage fraud scam. The investigation is focused on proving that Bhaktraj Singh and other members of the John Davies-led Davies Developers organization stole millions of dollars from investors’ money. The FSCO’s inaction on Fortress Real Developments, which jeopardized the investments of thousands of small investors by violating provincial laws while marketing and selling syndicated mortgages, is also covered in the study. It is critical to recognize the mounting public outrage, political attention, and public concern regarding FSCO’s deficient market regulation, which has caused large losses for Ontario retail investors.
The Ontario Financial Services Commission (FSCO) is dedicated to safeguarding customers.
FSCO takes its responsibilities seriously, and we will keep taking legal action against those who break the law.
Canada-based businessman Bhaktraj Singh is one of a number of mortgage brokers who came under investigation in Ontario for syndicated mortgages that have left small-scale investors with huge losses and now questions have been asked that what the regulator has been doing. Bhaktraj Singh’s one company has been under observation by Ontario provincial police over fraud allegations which have resulted in him in a huge loss of wealth and reputation.