W5: Desperate borrowers fleeced in fee-for-loan scheme
Published Saturday, March 19, 2011 6:45PM EDT
Tanyia Kingyens needed a loan.
Though she had been caring for seniors out of her home in Summerside, P.E.I, Kingyens wanted to run her own retirement residence.
Young and without substantial savings or collateral, Kingyens didn't qualify for bank financing. So she turned to a private lender based in Toronto -- Canadian Funding Corporation. CFC agreed to loan Kingyens $1.3 million for a mortgage on a building she'd been eyeing.
Though the principals of CFC initially remained anonymous, Kingyens later received documents from CFC which listed the president of the company as Craig Hutchens.
Kingyens had no idea that Craig Hutchens' full name was Sandy Craig Hutchens, that he went by other aliases, that he had a checkered criminal history -- and a tendency to back out of his loan commitments.
"He's claiming that he is a generous, kind hearted man," Kingyens told W5, describing happy pictures of satisfied borrowers she found on Hutchens' website .
In 2005, Kingyens was confident she would be one of those satisfied customers. Before approving the loan, Hutchens asked Kingyens to sign off on a stack of conditions. He also asked her to send hefty advance fees to secure the loan -- more than $32,000.
Sure the loan had been approved and the money would soon be advanced, Kingyens proceeded with her business plans and seniors signed up to move in to her new residence, to be named Parkhill Place.
Meantime, Hutchens started demanding new information from Kingyens. She met all the conditions of the deal, but when the loan money didn't show up as expected, Kingyens grew concerned.
"We had borrowed money from our family to send to this individual and we had already committed and had people committed to living at Parkhill Place. We were due to open in two weeks and we realized then that we weren't going to have the money to pay for the building," Kingyens recalled.
That's when Kingyens searched Hutchens' name on the computer.
"What I saw just made me sick because it came back showing that he had committed fraud to other people," said Kingyens. "I realized then that what we were dealing with was not an honest individual and we'd been taken."
Kingyens discovered that Sandy Hutchens had been convicted only months earlier on four counts of fraud and one count of trafficking narcotics.
But Hutchens told Kingyens that he was a changed man and had put his past behind him. Hutchens, raised a Baptist, was converting to Orthodox Judaism. She believed he was sincere.
"We did attempt briefly to try to get a deal going. According to him, that was all in his past and he was choosing a different way of life now and that had no bearing on the reason why the money wasn't coming," Kingyens said.
However, when Hutchens introduced entirely new terms for their deal, Kingyens refused to comply. That's when Hutchens reneged on the deal -- but kept Kingyens' up-front fees.
W5 found dozens of cases like Kingyens' from across North America, where desperate borrowers paid up-front fees to Sandy Hutchens but never received their loans.
Hutchens' accountant, Martin Lapedus, admitted in a February, 2011 court affidavit that Hutchens "failed to close hundreds of transactions," and "never had an intention to fund (them)."
Lapedus said: "It is my belief that Hutchens would provide the loan commitment, receive the advance fee and then find a reason to blame the borrower for refusing to close the transaction."
In the affidavit, Lapedus claims that over four years, Hutchens loaned out less than $500,000 but collected more than $9 million in front fees from desperate borrowers.
"They were praying that somehow there would be a miracle and he would fund the deals," Lapedus told W5. "The only miracle he did was fatten his own bank account."
Tanyia Kingyens wasn't prepared to just let Hutchens walk away with her money or railroad her business plans. A conscientious member of the community loaned her the money she needed to open Parkhill Place Retirement Residence on time.
Then, Kingyens sued Hutchens for the $32,000 advance fees, along with an additional $70,000 in related costs she incurred. In 2007, a judge ruled in Kingyens' favour and ordered Hutchens to pay her $130,000.
Despite the court order, Hutchens didn't pay. When Kingyens registered the judgment in Ontario and hired a Sheriff to collect from Hutchens, he couldn't find any assets in Canadian Funding Corporation.
Through it all, Tanyia Kingyens has remained defiant.
"Despite his best effort, he was not successful in bringing us down," Kingyens said. "The business has flourished in spite of what (Hutchens) tried to do to us. We really just want to see him brought to justice so he cannot do this to someone else."