Imagine what it would be like to
wake up one morning and discover that you no longer own the house you're
living in it was apparently sold to someone and then re-mortgaged without
You no longer have a deed in your own name. As a result, you are not able to
move because you can't sell the house. You can't refinance the house to take
advantage of low interest rates or send your child to college. Nor can you
use it to secure a car loan or to accomplish any other goal that requires
mortgaging or selling your house.
That's exactly what happened to five sets of Richmond Hill homeowners in
late 1999 and early 2000, when a fraud artist named Emanuele Tesoro decided
to use their property titles to bilk several private and institutional
mortgage lenders of more than $1.5 million.
The properties are on Strathearn Ave., Alessia Ct., Blackwalnut Cr.,
Heatherwood Cr. and Hoodview Ct. The houses and their owners are no
different from thousands of other homes and homeowners in Richmond Hill, or
anywhere else, except that they became the victims of a well-orchestrated
and highly sophisticated real estate fraud.
Last summer, Tesoro, age 47, pleaded guilty to 33 counts involving real
estate fraud at the Ontario Court of Justice in Newmarket. The charges
included fraud over $5,000, uttering forged documents and signing a false
affidavit. Unfortunately, the homeowners and their mortgage lenders are
still waiting for a solution to the mess.
At the time of his guilty plea, Tesoro signed a lengthy declaration that
detailed to the court his role in the fraud. Under oath, he admitted he
caused certain deeds to be signed and registered to transfer title to five
properties to himself without payment to the owners and without their
After registration of the fraudulent deeds, he then registered forged
discharges of four mortgages in favour of the Royal Bank and one in favour
of the Bank of Nova Scotia, even though no money had ever been paid to those
Tesoro then approached several mortgage brokers and lenders to obtain new
mortgages on the properties, which appeared to be free and clear. None of
the parties knew he was not the true owner of the properties.
Two private lenders, along with Equitable Trust Company and MCAP Service
Corporation, advanced mortgage funds ranging from $210,000 to $350,000 for
each property, for a total borrowed of more than $1.5 million.
Tesoro did not have his own lawyer on any of the transactions. He said in
his declaration that he went to the offices of each lender's lawyer, signed
whatever documents were presented to him, and provided his driver's licence
and other identification showing his real name.
After the deals closed and Tesoro received the proceeds, he arranged for
most of the money to be converted to U.S. funds through local foreign
exchange companies. The funds, he said, "were sent out of the country and
cannot be retrieved." The money that left the country is not traceable, nor
was it converted into assets that can be traced or seized.
The balance of the money that remained in Canada was spent, and there is
At the time of his guilty plea, Tesoro's stated he had no assets, was
unemployed and bankrupt. He was still the registered owner of the five
properties, and the original mortgages in favour of the Royal Bank and
Scotiabank remain discharged. The new mortgages given by Tesoro in his real
name to the new mortgagees remain on title but are in default.
Following his guilty plea before Judge Roy E. Bogusky in Newmarket court,
Tesoro was sentenced to 38 months in jail on each of the charges, to be
served concurrently. In addition, a compensation order was issued directing
him to pay the victims $1.545 million, but their chances of recovery are
Recently, I went to York Regional Police headquarters to talk to the
officers involved in the investigation. Det.-Const. Phil Shrewsbury-Gee and
Det.-Sgt. Kevin O'Grady were very helpful in providing background on the
frauds, and even showed me a pile of forged real estate documents from the
local land registry office, complete with purple fingerprint powder that
highlighted the fingerprints of those who had handled them.
I learned that York Region is not the only area where this type of real
estate fraud is going on. Police forces in Halton, Peel and Toronto also
have their hands full with frauds involving both artificially inflated
purchase prices (known as Oklahomas) and fraudulent title transfers and
The fraudulent transfer of titles and the forging of mortgage discharges
strikes at the heart of the land registration system in this province.
Ordinary members of the public, as well as the country's financial
institutions, are losing millions of dollars to these types of fraud.
I'm told the four police jurisdictions are co-operating with each other in
exchanging information but, to me, the issue is so vital to the public
interest, I think there should be a joint task force co-ordinating the
I left York's police headquarters with more questions than when I entered.
Nobody is saying the banks or lenders are responsible for these losses, but
why is it so easy, I wondered, for one person to obtain so much money from
different institutional lenders within a short time period? Don't they
exchange credit information with each other? Who did the appraisals on the
property? Didn't anybody knock on the doors of the houses to check out
whether the owners knew about the new mortgages?
I'm told Tesoro's money was taken out of the country in U.S. funds in cash
by one courier. Who was the courier? Was anybody else involved in setting up
the fraud? Is it that easy to take $1 million-plus in cash across the
border? Who converts $1 million into U.S. cash without asking questions? Why
didn't the agent or institution report the transactions to the police?
Why did the Newmarket court refuse to give me copies of Tesoro's statement
and tell me to apply under the Access to Information laws? Aren't these
Why did the Newmarket land registry office, according to Shrewsbury-Gee,
make York Regional Police pay for the title searches when they were
investigating the forged documents?
Who prepared the phoney documents for Tesoro to sign? Who concocted the
scheme? Who else was involved and who got the benefit of the more than $1
million obtained by fraud?
Above all, why are the families still waiting for compensation from the Land
Titles Compensation Fund while they put their lives on hold? This fund is
administered by Ontario to provide funds when people lose their property
rights as a result of fraud.
The tragedy is there's nothing anyone can do with the title to their homes
to protect themselves from this kind of fraud.
Watch this column for future developments.
Bob Aaron is a leading Toronto real
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