Police cripple organized crime group involved in massive mortgage frauds

Police say the $200,000 luxury vehicle was purchased as a proceeds of crime by one of the accused.

Story Update Feb. 7, 2023 - The charges against a fourth person were stayed on March 4, 2015.

Story Update May 17, 2018 - The charges against Farhan Sattar that are listed below were stayed on May 5, 2015.

Four people are facing 30 criminal charges in a complex mortgage fraud scheme that allegedly cost taxpayers and banks millions.

ALERT teams started an investigation in October 2013 and say the scheme was perpetrated by a Calgary-based organized crime group.

They say the group is alleged to have aided and abetted a large cross-section of Calgary’s underworld with fraudulent mortgages and used fake companies to commit mortgage fraud by falsifying documents related to employment records, bank statements, credit information, and tax assessments.

Investigators say the scheme involved the purchase of more than 20 homes in Calgary, Fort McMurray, and British Columbia that ranged in price from $300,000 to well over $1 million.

Police say the group used many variations and methods of the scheme, which allowed them to profit from these illegal activities.

“This group would utilize straw buyers to purchase homes using falsified documents. They would profit from exorbitant service fees, inflated values of the mortgages, and borrowing against the mortgages. The crime would then be continued by fraudulently purchasing additional homes,” said Inspector Gerry Francois, Commander Calgary ALERT team.

“Through obtaining these mortgages fraudulently, this group was receiving service fees from some of the other people that were involved. They were relying on increased values of the property and also withdrawing second mortgages, third mortgages etcetera on each property and pulling out the equity. This would allow them to perpetuate further purchases of property and continue the cycle,” said S/Sgt Martin Schiavetta from ALERT.

Investigators say the group allegedly directed mortgage brokers, individuals in the banking industry, realtors, and lawyers to facilitate the mortgage frauds.

“We have crippled their operations and are in the process of seizing their assets and exploring civil forfeiture options. The $200,000 luxury vehicle that you see parked out front was purchased as a proceeds of crime by one of the accused,” said Francois. “The new wave of organized crime is highly sophisticated and will utilize any means for financial gain.”

Investigators say the following four fraudulent companies were established to obtain mortgages:

“The companies were used as shell companies, they were fraudulent in nature and the documents related to those companies were allowing them to mislead the financial institutions thinking that the people receiving the mortgages, for example, were employees of those companies. They were fraudulently manufacturing tax assessments, employment records, letters of employment, income verifications, documents of that nature,” said Schiavetta.

Four people were arrested on December 10 and are charged with:

Ricco King, 42, from Fort McMurray and resides in Calgary – 9 charges

Farhan Sattar, 35, from Golden, B.C. and resides in Calgary – 9 charges (*Ed. note: Charges later stayed)

Jared Jenkins, 30, from Calgary – 5 charges

A 30-year-old from Calgary – 6 charges (*Ed. note: Charges later stayed)

“The victim here is the Alberta taxpayer. Many of these mortgages were insured through Canadian Mortgage and Housing Corporation so ultimately it’s the taxpayer who is going to be paying a lot of these bills,” said Schiavetta.

Police say more charges and arrests are expected and anyone who may have been in contact with these individuals or these companies, are asked to review their mortgage with their lending institution and to monitor their credit rating.