Is the scam behind the fraudulent transfers of titles to
five Richmond Hill homes part of a much larger operation involving
properties all over the Greater Toronto area?
Why is it seemingly so easy to steal someone else's property title and bilk
mortgage companies of hundreds of thousands of dollars?
What kind of appraisals have to be performed to prevent such frauds?
Where is the loophole in the land registration system to allow crooks to
register bogus mortgages?
What can ordinary homeowners do to protect themselves from title fraud?
Would title insurance have helped?
These and dozens of other questions flooded into my e-mail and fax machine
following my Feb. 9 column on Emanuele Tesoro, a fraud artist who forged and
registered ownership to five properties on Strathearn Ave., Alessia Ct.,
Blackwalnut Cr., Heatherwood Cr., and Hoodview Ct. in Richmond Hill. After
registering false deeds in his own name, Tesoro registered forged discharges
of the existing mortgages and then bilked the Royal Bank and Bank of Nova
Scotia of more than $1.5 million by placing new "first" mortgages on the
houses he didn't really own.
The column, entitled Stolen dreams, has produced more reaction than any
other Title Page column. (The column is archived at
www.aaron.ca under Toronto Star columns.)
Among the more interesting e-mails was one from my colleague Wayne Lipton, a
lawyer who is president of Stewart Title in Toronto. "We insured three of
the fraudulent mortgages you referred to," he wrote. Stewart is awaiting a
compensation decision by the Land Titles Assurance Fund before making a
decision on its own coverage. By law, the fund assumes primary
Stewart Title is no stranger to fraud claims. Last September, Stewart paid
out $851,000 in two fraud claims similar to the Tesoro scam. "Real estate
fraud is a growth industry," he added.
Even my own bank manager was shocked at the extent of the Tesoro fraud.
Peter Morgulis e-mailed me from the head office branch of the
Toronto-Dominion Bank at King and Bay. "I am stunned at how easy it was for
this fraud to be committed," he wrote.
It certainly is easy. Rick Holden wrote to ask me to clarify how the
individual homeowners lost the title to their properties. He wondered if
they signed any documents to allow Tesoro to change title. The answer is
that the title documents were created with forged versions of the owners'
signatures but without their knowledge or consent.
Pae Chien wrote to say, "I am horrified by this type of fraud and shocked
with the light punishment Tesoro received why he only got 38 months for
each fraud, and to be served concurrently. He should be put away for life so
he could never enjoy this money.
"I am also perplexed as to where the real loophole is to allow these crooks
to take advantage of the system," Chien added. "Is the Land Registry Office
the one to blame for accepting false documents? What preventive steps can
homeowners take to protect themselves?"
|Purchase title insurance when
buying the home. If you already
own the house, it's too late
that's like getting fire insurance
after the firefighters leave the
Good questions. Forgery may not be the oldest profession,
but it's right there near the top of the list. It's just gotten much more
sophisticated in recent years.
On the plus side, the Newmarket land registry office is now fully
computerized and no longer accepts documents with regular signatures. All
registrations are electronic and a bogus document can instantly be traced to
the computer of the person responsible.
Although it's impossible to prevent fraudulent dealing with property titles
in the non-computerized registry offices, my personal recommendation to
every homeowner is to purchase title insurance when buying the home. If you
already own the house, it's too late to buy insurance after the fact
that's like getting fire insurance after the firefighters leave the
Ultimately, the Land Titles Assurance Fund, using taxpayer dollars, should
be responsible for paying the damages caused by people like Tesoro, although
the owners of the five properties whose titles he forged have been waiting
months for a decision on compensation from the fund.
Another reader was dismayed that I did not question what banks can do to
prevent such fraud and what they are doing to fight it.
Joe Freitas is a local businessman who feels that the lending institutions
should "properly screen" their customers, and if they cannot tell the
difference between what is real and what is not, they, and not the public,
should pay for the losses.
I received e-mails from a number of my legal colleagues. Harry Thorsteinson
is a senior partner with a law firm in St. Catharines. He was puzzled by the
impression drawn from my column that the true owners of the properties were
victims. He thought the titles could easily be restored to the rightful
owners subject to the original mortgages.
Unfortunately, that is not the case. The original mortgages are history,
even though they were fraudulently discharged. The mortgagees have to seek
compensation from either the Land Titles Assurance Fund or the title
The deeds have to be rolled back to the rightful owners by court order.
Right now, there are about a dozen lawyers working on the fallout from the
Tesoro fraud, but the titles are still in limbo. Putting Humpty Dumpty back
together again is not nearly as simple as it would seem. It could be months,
or even years, before everybody is made whole again.
Thorsteinson wanted to know if photo ID would have helped in this situation.
I told him I didn't think so, since Tesoro actually used his own name and
his real identity papers.
As if the Tesoro case is not bad enough, it seems there are quite a few
similar situations out there. I agree with a number of readers who wrote to
say there should be a province-wide police task force to root out the
perpetrators of these frauds.
Ontario residents need to have confidence in the security of their property
Bob Aaron is a leading Toronto real
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