Illegal Mortgage Brokering Conviction
SCARBOROUGH - (July 6, 1998) - On June 1, 1998, an unregistered Scarborough mortgage broker pleaded guilty to the charge of carrying on the business of a mortgage broker while unregistered. Cassim Auzam, who operated B.L.A.C. Financial Services, was fined $7,000 plus a 20 per cent victim fine surcharge, and placed on probation for 18 months.
William Vasiliou, Registrar of Mortgage Brokers, expressed serious concerns about individuals who, because they were ineligible to register on their own, entered into business relationships of convenience to circumvent or defeat the purpose and intent of the Mortgage Brokers Act by "renting the credentials of a qualified person."
In this case, Auzam had approached a fairly inexperienced lawyer to register as a mortgage broker. Auzam and others associated with him did everything necessary to arrange and obtain mortgage financing. The registered broker's role was limited to that of signing the Statements of Mortgage and providing legal services in his capacity as a lawyer.
On sentence, Justice of the Peace Paul Chandhoke rejected a joint submission prepared by the Crown and the defence that a fine equal to the profits plus 15 per cent be imposed. He stated that a much higher fine was warranted in order to deter others from committing the same offence. The fine imposed represented $1,000 per illegally-brokered transaction. This amount was significantly higher than the mortgage fees received for most of the transactions.
Justice of the Peace Chandhoke also said that a higher fine was warranted because Auzam knew full well the requirements of the law and despite that, had proceeded to advertise his services in the newspaper and to generally conduct business as if he were the principal mortgage broker. The court endorsed the Registrar's contention that this unlicensed business activity was unacceptable and that a clear message had to be sent to the community on this matter.
Contact: William Vasiliou
Registrar of Mortgage Brokers