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Huge Canadian Mortgage Fraud…

♬ Everything is not what it seems
When you can get what you want by the simplest of means
Be careful not to mess with the balance of things
Because everything is not what it seems…♬

Lyrics and music by: John R. Adair, Ryan David Elder, Bradley Jay Hamilton, Stephen R. Hampton, recorded by: Selena Gomez.

CBC News on May 4, 2010 in an on-line article entitled: “Bank of Montreal alleges huge mortgage fraud” reported on a potential $30 million mortage/real estate fraud in Alberta.

The article is disturbing, as the size of the fraud and . . . [more]

Posted in: Practice of Law: Practice Management

Fraudsters Now Using Counterfeit Bank Drafts and ID of Major Banks on Mortgage Deals

This afternoon LAWPRO sent an e-blast warning Ontario lawyers to be on the lookout for the latest fraud scheme targeting them. For the first time LAWPRO is seeing a counterfeit bank draft fraud scheme that targets real estate lawyers on mortgage deals. Furthermore, the new scenario may include the supposed fraudster using the identity of a major national financial institution as the actual lender in the transaction.

This new type of fraud works as follows: A new and previously unknown client or lender contact allegedly from a major bank will ask a lawyer to act on mortgage matter. The source . . . [more]

Posted in: Practice of Law, Practice of Law: Practice Management

Warning Re: Claims Exposure Where Private Mortgage Advance Goes to Third Party

[The following is the text of a LAWPRO alert sent October 7, 2014. This post mirrors the alert, but includes samples of the new exemption clauses we have seen in claims files.]

LAWPRO has become aware of a new exception to coverage in certain title insurance policies which could expose real estate practitioners to claims from their private lender clients.

The issue has recently arisen in connection with private residential mortgage transactions, and in particular where the lender and borrower are separately represented, as required, because the loan is more than $50,000. This is the basic scenario: After the lender’s . . . [more]

Posted in: Announcements

Practice Pitfalls: Beware of Shelter Fraud in Real Estate Transactions

In the September 2010 issue of LAWPRO Magazine, we asked our claims counsel about what they feel are the biggest malpractice hazards in each area of law based on the claims files they work on every day. Here is an excerpt from that article dealing with clients who urge a quick settlement. Click here to read the full article “Practice Pitfalls”.

When lawyers think about real estate fraud, they tend to think about fake clients with forged ID obtaining fraudulent mortgages, or flip frauds where the value of a property is artificially inflated. They rarely think of shelter fraud – . . . [more]

Posted in: Reading

Keep Your Guard Up: Bogus Cheque Fraudsters Continue to Target Lawyers

Almost every day lawyers send me copies of emails they have received that attempt to dupe them into acting on a matter involving a bad cheque or bank draft. Some of these messages are clearly attempts at fraud; others can look very legitimate. We have seen some one in which a lawyer is contacted and asked to refer the matter to another lawyer, presumably to fool the lawyer getting the referral.

Thankfully, most lawyers seem to recognize when they are being targeted. But we are still seeing some lawyers that are getting fooled – including one just this week on . . . [more]

Posted in: Practice of Law

Lawyers as Targets of Fraud: The Common Misconceptions

(This article comes from the latest issue of LAWPRO’s new Webzine and magazine.)

Almost every day LAWPRO receives calls and emails from lawyers who are acting on files that are possible or obvious frauds. The types of sham matters targeting lawyers range from collections and commercial loans to real estate and mortgage transactions.

Based on feedback, we believe that lawyers and law office staff are generally more aware of the red flags that warn of potential fraud. Lawyers are more often identifying and stopping frauds targeting them.

However, these calls also tell us that several recurring misconceptions are preventing . . . [more]

Posted in: Practice of Law, Practice of Law: Practice Management

Wednesday: What’s Hot on CanLII

Each Wednesday we tell you which three English-language cases and which French-language case have been the most viewed* on CanLII and we give you a small sense of what the cases are about.

For this last week:

1. Gorham et al. v. Behm et al., 2020 ONSC 6469 (CanLII)

[18] I find on a balance of probabilities that the Defendants were motivated to express themselves with a view to communicating with a community they were part of in hopes of bringing about positive change to that community. Their motivation strikes me as reasonable and their communication was consistent with . . . [more]

Posted in: Wednesday: What's Hot on CanLII

Delay and Access to Justice: Revisited

“…Why, some of the work that I have by me now has been in my possession for years and years, and there isn’t a fingermark on it. I take a great pride in my work; I take it down now and then and dust it. No man keeps his work in a better state of preservation than I do.”

Jerome K. Jerome, Three Men in a Boat (To Say Nothing of the Dog)

In my last Slaw column I wrote about the potential impact of the Supreme Court’s decision on delay in criminal proceedings (R. v Jordan). In . . . [more]

Posted in: Dispute Resolution

Wednesday: What’s Hot on CanLII

Each Wednesday we tell you which three English-language cases and which French-language case have been the most viewed* on CanLII and we give you a small sense of what the cases are about.

For this last week:

1. Chin v. The Law Society of Upper Canada, 2018 ONSC 2072

[2] On May 15, 2015, the Hearing Division of the Respondent Law Society of Upper Canada (the “Law Society”) found that the Appellant knowingly participated in mortgage fraud in respect of six residential real estate transactions. Her licence to practice law was revoked. The Hearing Tribunal found that maintaining public . . . [more]

Posted in: Wednesday: What's Hot on CanLII

Shining Light on Exclusion Will Assist Diversity

Despite 5 years of research, detailed consultations, and ample careful thought, the resistance towards the Challenges Faced by Racialized Licensees Working Group’s recommendations continues to grow among the fringes of the legal profession, although some of the most vocal voices do not practice at all, and are far removed from the realities that most practitioners in Ontario face today. Sadly, the Statement of Principles that has to date attracted the greatest scrutiny is still only one part of a larger program underway.

For those of us who have been involved in supporting these initiatives, and who are better informed of . . . [more]

Posted in: Justice Issues

Steer Clear of Real Estate Claims by Asking These Five Questions on Every Deal

The real estate lawyer’s job is more than just conveying title, and not every matter will be straightforward. Communication errors and inadequate investigation are the biggest causes of real estate claims at LAWPRO, respectively 41 per cent and 26 per cent of claims reported in the past 10 years. Busy, high-volume practices often lead to situations where the lawyer is not taking the time to communicate with the clients properly.

Lawyers need to take the time to speak to clients to ensure they’ve gathered all the relevant information.

Here are five questions lawyers should be asking their clients or themselves . . . [more]

Posted in: Practice of Law

Candid but Unsure

The principal duties owed to clients are well known: commitment, confidentiality, candour and competence.[i] Much has been written and debated about commitment and confidentiality. Their nature and scope are reasonably well understood. Competence and its legal twin negligence are conceptually simple enough, albeit fact-specific.

Candour is another matter. Candour seems straight-forward. Simply be honest with your clients, tell them what you know and all will be well. But this naïve approach is problematic. As is often the case in legal ethics, difficult issues arise because duties can collide. Candour and confidentiality can be irreconcilable duties and confidentiality is pervasive . . . [more]

Posted in: Legal Ethics