Aug 5, 2010, Charges laid in 12M Calgary mortgage fraud scheme

Alberta Law Enforcement Response Teams (ALERT) have laid charges in a $12-million mortgage fraud scheme.

During a two-year investigation, authorities determined there were 22 properties involved in the scheme.

The police probe also uncovered 12 witnesses, people who were recruited to obtain a mortgage.

“The nominees, known as straw buyers, were asked to allow their name to be used to obtain a mortgage and were then told that the accused would take it over in their own names after six months,” said Insp. Kevin Forsen of the Alberta Law Enforcement Response Teams (ALERT).

“In exchange for their identities, each straw buyer allegedly received between $3,000 to $5,000. Eventually, the accused walked away from the scheme with a large amount of money, leaving the nominees holding the mortgages.”

Alleged ring-leader Ali El-Sayed, 31, surrendered to police on July 29. El-Sayed and his company, Ramses Holdings Inc., have been charged with 23 counts of fraud over $5,000. He also faces one count of extortion.

Christos Fotopoulos, 28, turned himself in August 4, and has been charged with three counts of fraud over $5,000.

An arrest warrant for Russell Kilba, 34, has been issued. Kilba is wanted on 10 counts of fraud over $5,000.

“This investigation was extremely complicated,” Forsen said.

Although organized crime groups remain involved in illegal rackets such as drugs and prostitution, Forsen said they’re increasingly diversifying into more complex crimes.

“Organized crime entities are looking at all kinds of different avenues to raise funds illegally,” he said.

The investigation began in 2008. ALERT had 12 witnesses, all of who were recruited as mortgage nominees and knew or were acquaintances with the accused. The nominees were asked that their names be used to obtain a mortgage and were told the accused would take over the mortgage, in their own name, after six months.

Each nominee was given between $3,000 and $5,000 for use of their name. The accused walked with large amounts of money from the scheme, leaving the victims with the mortgages.

The financial institutions allegedly de-frauded were Scotiabank, TD Bank, ATB Financial, First National Financial, CIBC, Merix Financial, Royal Bank and MCAP Financial.

There is no evidence this scheme is connected to an ongoing RCMP mortgage fraud investigation involving the Bank of Montreal.

By Jason van Rassel and Michelle Butterfield, Calgary Herald