Lawyer faces charges in fraud case after developer flees

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Down payments, which may total more than $12 million, have disappeared and charges have been laid in a Canadian fraud case.

Meerai Cho, a Toronto-based lawyer, represented the developer of the North York condo hotel “Centrium” – a project that fell through earlier this year. The case has become a reminder for brokers and Realtors to advise clients to do their due diligence before forking over their deposit money for pre-construction builds.

“Our thoughts are that it shows how important it is to buy pre-construction through reputable builders. Buyers should always research the project as well as other developments done by the builder,” Erica Smith of Condo Chicks told’s sister publication, CREW. “We would never take clients to a pre-construction sales office without knowing the reputation of the builder.

“It's so important these days considering the amount of fraud and international money in the Real Estate market.”

The developer’s lawyer is facing 75 count related to fraud after the developer disappeared – along with the down payments -- following the dissolution of the project.

According to a police representative, the project seemed legitimate and not a front for a scam.

“From what I can see, from the planning went in from the city of Toronto, some of the paperwork, this was beyond just being a scam,” Toronto Police Detective Constable Chris Devereaux told Global News. “It looks like it was going to be a development, for whatever reason it just collapsed.”

Still, 25 people have already come forward and claimed fraud. One individual is relieved charges have been laid, though he is still out $220,000.
“Relief, a little bit but how do I get my money back?” the man told Global News.
  • Myer Betel on 2014-08-27 12:13:11 PM

    Why are you calling this a Mortgage fraud when there are no Mortgages involved?
    It is either Solicitors negligence, or fraud.

  • Len Lane on 2014-08-27 12:26:55 PM

    Even reputable builders go under, Greenboro Homes in Alberta left a lot of people holding the bag not only on deposits but on work not completed as well. In pre sales I've always thought it was crazy for the money not to go into trust with a lawyer.

  • Guillermo on 2014-08-27 12:30:42 PM

    I agree with Myer Betel. If there were any banks or mortgage brokers involved, the writer left them out. If there weren't, then why would you label it mortgage fraud? While it grabs the attention of your readers, when they dig through the details and see there were no banks or brokers involved it frankly puts them off because it looks like you are trying to gain readership and advertising revenue at the expense of the industry you're trying to serve.

  • Anthony C. on 2014-08-27 12:40:02 PM

    To Jamie Henry...your title to this story is incorrect...the charges are not related to mortgage fraud at all...wondering if this publication has an editor who actually confirms the writer has vetted their sources of information before publication...I think not...

    The charges are 25 counts each of fraud over $5K, possession of proceeds of crime and breach of trust.

    There may be a hint of mortgage fraud charges to follow and committed by the developer since financing was originally funded through Romspen, to fund the original purchase. He defaulted on the loan and Romspen forced sale...and got their money its no loss to them.

    However, the article appears to insinuate that mortgage fraud did occur and i'm having a tough time seeing where exactly that happened.

    Good luck to the authorities on this one...they have their work cut out for them.

  • Anthony C. on 2014-08-27 12:54:29 PM

    @ Len Lane...

    The money was in Trust...she wired-withdrew monies from her trust account and forwarded them to the account of the developer...its called breach of trust and part of the charges laid onto the lawyer...

    Greenboro Homes had prior build outs which were a success...they just had a bad strategy on their last project in addition to cash flow problems which caused the eventual failure of the project and the company.

    This builder in question was new to the industry and had intentions to develop, but was in over his head and owed serious people some serious money overseas...when things got tight, he saw a way out and took all involved. The lawyer is now crying ignorance and in my opinion should be held accountable. The developer targeted early investors/buyers, primarily from his own ethnic persuasion (mostly Asian-South Korean and Chinese) who unfortunately identified with him and were easy marks...shitty for them...but a helluva warning to all future buyers.

  • Ron Butler on 2014-08-27 12:58:17 PM

    There is a constant theme in real estate fraud cases, whether it is a hard fraud mortgage cases based on false ID, missing deposits like this, fraud based of phoney value increases, there is often a lawyer involved or turning a blind eye. I am NOT accusing lawyers as a profession. I direct deals every day to lawyers who dot every I and cross every T with great care and flawless ethics. Even these great lawyers I work with get hit with "one of" ID theft frauds once in a decade. But truth be told to accomplish multiple frauds like this one, a lawyer has to be in on it.

  • Len Lane on 2014-08-27 12:59:41 PM

    Anthony... pretty hard for the lawyer to call ignorance they would have had to approved the transfer. So obviously a blatant abuse of trust. Greenboro did have its day I was in the home building industry for 15 yrs here in Alberta so watched a lot of things unfold over the years.

  • Anthony C. on 2014-08-27 1:07:43 PM

    @ Ron Butler

    Your totally dead-on with your comments...most real estate lawyers are so straight laced, they wouldn't dare to abuse their privilege.

    She was so in on will all come out in time...but she is arrogant and "lawyering up" ...wait until the Crown puts the screws to her.

  • Anthony C. on 2014-08-27 1:14:03 PM

    @ Len

    She can transfer funds out of the account without anybody's consent...She is frozen with fear about now...she knows what she is facing and I think it was a knee-jerk reaction to plead her some time to "buy" some time. She is already out on bail and if there are no travel restrictions, the next story will read "Lawyer on Charges Flies the Coop"

  • steve kates v.p. on 2014-08-27 2:24:06 PM

    I don't see any mortgage fraud case here there are no mortgages .why doesn't your reporter write the real truth .

  • Kuldip S Panesar Homeland Mortgage Corp. on 2014-08-27 4:42:21 PM

    This is not a mortgage fraud . Fraud is committed by the Lawyer and the developer.
    Title of this case to be changed .

  • tom adamson on 2014-08-27 5:00:00 PM

    Not knowing the intricacies of the transaction the only thing people are doing here is speculating. I would think any developer would have extensive documentation, that would include financing, on a deal of this magnitude, which again I would think the police are intelligent enough to read and comprehend. I will be astonished if this lawyer is ignorant. More direct to the point would be the law society and how she/he is going to quantify the disbursement from trust funds. My point or thought here is the purchasers trust funds are gone. I would suggest a significant increase to every lawyer in the province to be imminent creating additional cost to every condo purchaser of yet to be constructed product in the long term, an additional burden not needed.
    Not much doubt that the legal profession will be somewhat disturbed that (voicing my opinion from Hamilton) will lead to the recapture of funds, or at least whats left. A thief cannot hide forever.

  • Angela Wong-Liao - Invis Inc on 2014-08-27 5:22:58 PM

    I always advised clients to check out the builder via the Home Builder Association website when clients are buying new pre-construction developments.
    Yes, even big reputable builder can go under, ie: the collapse of Bramalea in early 1990s when the company was overextended, late 1989 & 1990 was the beginning of the Toronto recession, it lasted for 6 years. I hope this is an isolated incident because I do not want to see the repeat of the very tough Toronto recession, 1990 to 1996.

  • Stella I on 2014-08-28 8:34:52 AM

    When it comes to deposit if the project is covered by pterion they cover up to $40,000 as an insured friends by Terry on which the client would get back

  • Morgan on 2014-08-28 10:16:23 AM

    Terry on?! REALLY!

  • Don McClure on 2014-08-28 10:58:32 AM

    Agree with Myer Betel; the headline for the article is a "grabber" but it appears totally inaccurate. I'm not sure how a fraud perpetrated by a developer and transfer of trust funds by a lawyer through incompetence or fraud can be termed "mortgage" fraud. I do not see ay reference to a consumer mortgage, mortgage lender or mortgage broker/agent in the article.

  • Anthony C. on 2014-08-28 12:19:43 PM

    To Jamie Henry:

    Thank you for changing the article's headline...

  • Jim Neilas on 2014-09-12 8:04:23 PM

    I feel sorry for the lawyer but the fact is that the fraud has been done and the investors are to be paid. Someone will have to face the consequences of this fraud. The same type of case I read a few months back about Jawad Rathore who did fraud with the investors and the consequences were faced by his employees.

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