A broker in Vancouver who was suspended over a decade ago has been slapped with an order to cease and desist activities by the Financial Institutions Commission (FICOM) after arranging $511.6 million in mortgage loans.
Jay Kanth Chaudhary was also found to have a vast network of registered submortgage brokers that operated together between 2009—the year after his license was suspended—and 2018. Vancouver police and FICOM staff entered Chaudhary’s premises and seized his computers and documents, the latter of which included a spreadsheet with 875 files worth $5.28m in client fees and $642,344 in referral fees “paid by the registered submortgage brokers who submitted the applications to lenders on his behalf,” according to a FICOM notice posted online last week.
Chaudhary was first suspended in 2008 after lenders raised concerns about his conduct. The latest notice alleges Chaudhary fooled borrowers into believing he was a broker who dealt with lenders directly. Moreover, he’s accused of collecting referral fees and submitting false or altered documents to brokers who filed on his behalf.
In the middle of 2017, two complaints were brought to the Registrar of Mortgage Brokers, and upon investigating Chaudhary determined 25 out of 26 mortgage applications submitted to CMLS Financial Ltd. on his behalf by an unnamed broker included altered Canada Revenue Agency tax documents.
BlueShore Financial internally audited mortgage files submitted by the unnamed broker between 2012 and 2017 and realized that 15 out of 48 had discrepancies. More than half of the tainted files were insured by either Genworth or the Canada Housing and Mortgage Corporation.
Chaudhary also operated with different aliases, phone numbers and email addresses to fix mortgages with false information, according to the FICOM order. Not only did Chaudhary bloat incomes, he included the names of accounting firms that weren’t, in fact, involved with preparing the files.
One of the spreadsheets identified at least 20 registered submortgage brokers and realtors Chaudhary relied upon for referrals.