Nearly eight years after provincial regulators launched an investigation into an alleged mortgage fraud network, no criminal charges have been laid, BIV has confirmed with Crown prosecutors.
This comes four years after its central figure, Jay Kanth Chaudhary, admitted to systematically falsifying documents.
Earlier this month the B.C. Financial Services Authority (BCFSA), via a public memo, lifted the veil on the extent of its multiyear investigation into the activities of Chaudhary. It’s alleged that between 2009 and 2018, he arranged an estimated $511 million of mortgage loans with lenders as an unregistered, so-called “shadow” broker.
Some of those loans have been proven to be based on falsified records.
Chaudhary had been a registered submortgage broker up until 2008, when he failed to renew his license after being suspended for four months for submitting false documents in applications.
He went on to continue working in the industry until some lenders blew the whistle on him in 2017.
The regulator’s investigators and Vancouver police searched Chaudhary’s home in January 2019 and seized, among other items, an Excel spreadsheet identifying his clients.
The regulator issued a cease-and-desist order in May 2019. But Chaudhary’s never faced an administrative hearing after investigators claimed he earned $6 million in fees and commissions from his unregistered activity using various pseudonyms.
Chaudhary was summoned to the Commission of Inquiry into Money Laundering in B.C. in February 2021, where he admitted he systemically falsified Canada Revenue Agency documents, job letters and bank statements for mortgage applications brought to him by his network of licensed real estate agents and mortgage brokers.
Commissioner Austin Cullen noted in his final June 2022 report there was no direct evidence Chaudhary’s clients were using proceeds of crime to pay down their mortgages.
Chaudhary gave testimony under guidance from his criminal defence lawyer, Joel Whyshall, who told the commission his client “is the subject of an ongoing investigation, and there is a search warrant being executed on him, and the CRA is investigating, and that matter is in charge approval.”
But charges were never issued against Chaudhary.
“As a matter of policy, the PPSC does not speak to a matter unless or until charges are laid,” the Public Prosecution Service of Canada said in response to an inquiry from BIV.
Likewise, B.C. prosecutors have not issued charges.
“I can confirm that there are no matters involving Jay Chaudhary under charge assessment," the BC Prosecution Service told BIV.
According to the commission’s final report, a BCFSA investigator gave evidence that he “brought the Chaudhary file to the leadership of the RCMP’s ‘E’ Division, but that the RCMP ultimately declined to take on the matter. To his recollection, the reason given was that the matter did not fall within their mandate.”
The only individuals who have faced any consequences are 22 real estate agents and mortgage brokers who worked with Chaudhary to obtain mortgages for their clients and, in some cases, themselves.
Prior to its March 13 public memo on the Chaudhary file, the BCFSA had shielded Chaudhary’s name in hearing notices against the agents and brokers, identifying Chaudhary only as “Individual 1.”
The BCFSA updated its hearing publication policy so that third-party participant names and identifiers will now be published in notices and decisions if the third-party participant is the subject of a related decision.
While BIV revealed an extensive amount of potential cases against Chaudhary last fall, it wasn’t until the policy change that the full scope could be explicitly revealed by the officials.
The regulator revealed 22 individuals associated with Chaudhary had been charged in administrative proceedings.
However, the BCFSA has relied nearly exclusively on consent orders to obtain judgments. Some have been penalized up to maximum fines of $50,000 or $75,000, and/or the loss of their licenses.
While one mortgage broker and eight real estate agents are awaiting hearings or the prospect of reaching a settlement, a BCFSA fact sheet shows 12 other current or former brokers or agents have entered into settlements for working with Chaudhary.
Meanwhile, agent Rashin Rohani has appealed both the findings of liability from a tribunal hearing on Jan. 11, 2024, as well as the sanctions ordered against her on May 17, 2024.
The tribunal found Rohani falsified her income to purchase five North Vancouver properties through Chaudhary. She has been barred from the industry and ordered to pay a $40,000 penalty, and $90,000 to the BCFSA for enforcement costs.
The Mortgage Brokers Act allows for fines of up to $50,000, but the BCFSA says it will soon be repealed and replaced by the Mortgage Services Act to allow for greater penalties for misconduct. When the MSA is in force, penalties will increase to $250,000 per contravention, or $500,000 per contravention in the case of a corporation.
Current or former brokers or agents who have entered into settlements for working with Chaudhary:
- Agent Molenia Golshani, who had her licence cancelled and was issued a $75,000 penalty for misconduct that included buying her home with false documentation provided by Chaudhary. Golshani referred at least 14 clients to Chaudhary.
- Agent Homayoun Karimloo, who bought two homes using Chaudhary to arrange mortgage financing and by using falsified income information. Karimloo had his licence cancelled and was issued a $75,000 penalty for the misconduct.
- Agent Jin Luo, who admitted to buying a $2.18-million property with falsified income documents. Luo, a former real estate agent with Green Team Realty Inc. while licensed with City Realty Ltd. (Re/Max City Realty), handed in his licence.
- Agent Mehdi Parsaeian AKA Mohammad Mehdi Parsaeian, who was penalized $20,000 and undertook remedial courses at the University of B.C.
- Agent Afsaneh Zarshenas, who referred at least 14 buyer clients to Chaudhary; Zarshenas was penalized $50,000 and her licence remains in good standing.
- Agent Sayna Mirzadeh, who had her licence cancelled after she worked with Chaudhary and with falsified income information to buy her home.
- Unregistered broker Shane Cristopher Ballard, who agreed never to apply for licensing in the industry and to pay a $50,000 penalty for arranging dozens of mortgages with Chaudhary.
- Unregistered broker Sarbjit Bains, who agreed to cease all activity and pay a $35,000 fine.
- Unregistered broker Ksenia Ivanova, who agreed to pay a $35,000 fine for unregistered activity.
- Submortgage broker Sophiya Sadrudin Dewshi, who agreed to pay a $15,000 fine for documentation misconduct and remains registered.
- Submortgage broker Jordan Lee Ly, who submitted to lenders mortgage applications on behalf of borrowers without having met the borrowers, agreed to pay a $10,000 fine and not re-apply for a now-expired licence.
- Submortgage broker Kambiz Parvizi, who obtained financing to purchase two properties with the assistance of two other registered submortgage brokers but with certain information and income tax documents that were not genuine. Parvizi primarily worked as a construction worker despite his licence and agreed to pay a $50,000 fine.
