Fines & Licence Suspensions Aren’t Enough

Justice FBA few months back, B.C.’s mortgage broker regulator fined and banned Jorawar Singh Gosal from the broker industry for 10 years. Mr. Gosal admitted to doctoring a client’s income documents to get his mortgage approved.

Given Gosal’s admission, we asked FICOM if it had referred his case to the authorities for prosecution (hoping it would say “yes”). Unfortunately, FICOM’s spokesperson couldn’t speak to the specifics of the case, citing legal reasons.

He did say this: “As a matter of course, in any file where there may be potential criminal activity or breaches in other regulatory areas, we refer files to the appropriate agencies, regardless of whether or not they choose to pursue the information.”

So that’s good. We’ll infer that FICOM sent Gosal’s case to law enforcement.

Make no mistake, altering documents to deceive a lender for personal gain is a criminal offence.

According to the Department of Justice:

Subsection 366(1) of the Criminal Code prohibits forgery, which is where a person “makes a false document, knowing it to be false,” with the intent that the document should be acted on as though it was genuine.

Under section 321 of the Code, “false document” is defined to include: a document “that is made by or on behalf of the person who purports to make it but is false in some material particular”. The offence of forgery is complete, where the person who makes it knows it is false, and where they intend that some other person act on the document believing it to be genuine.

Subsection 368(1) prohibits the use of a forged document as though it were genuine. The offences of making a false document and using a false document are both punishable by a maximum of 10 years in prison.

Under section 380 of the Code, fraud comprises two elements: (1) deception or some other form of dishonest conduct, coupled with (2) deprivation or risk of deprivation of another person’s property. Mortgage-related fraud is subject to the Criminal Code and is punishable by a maximum of 14 years in prison, where the value of the fraud was over $5000, and by a maximum of 2 years where the value was less than $5000.

So, given all this, we could assume Gosal was investigated by law enforcement and that they’re taking all appropriate measures. Or can we?

So far there’s been no formal charges laid that we could find in court records. Perhaps it’s just a matter of the criminal investigation needing more time.

Mortgage Fraud_FBWhat we do know is that consent orders are not enough. Document fraud usually gets handled internally in the lending industry, without the benefit of public exposure (which would strengthen deterrence). When it is referred to law enforcement—which by no means happens in the majority of cases—it’s all too often not pursued due to “insufficient resources.” That’s exactly what keeps the back door open for bad apple brokers.

Weasel agents need to be eradicated from our business, not only for the risk they cause lenders and borrowers, but for degrading consumer confidence in our profession. Regulators need to reward whistleblowers, like the OSC now does, and make offenders pay for those rewards.

It’s time to make examples of such embarrassments to our industry. Criminals fear jail time more than a $4,000 fine and a licence ban (which should be a lifetime ban, by the way, not just 10 years).

While we’re on this topic, whatever became of those alleged fraudsters who sent bad paper to Home Trust? Nary a peep about whether any of them were charged. That’s unfortunate. Really…and truly…unfortunate.


  1. Great points Rob, I really like “weasel agents need to be eradicated” hits the nail on the head. There is no question the brokerage who spearheaded the Home Trust document fraud is open and doing mortgages today. It is amazing since that brokerage actually caused Canadian shareholders a loss of $800 Million. I have asked this question of cops that I meet when attending various fraud seminars and they all have exactly the same response: we are too busy pursuing fraud for profit, we have zero time for fraud for rate or fraud for shelter. They also have another issue, in the case of fraud for rate or shelter if the fraudster paid every single mortgage payment to the lender perfectly on time what were the damages? Naturally uttering false documents is a crime in Canada so there are laws available to pursue the evil doers but the police only have so much time and resources and their white collar crime units are chronically understaffed. I am afraid until there is more power given to the provincial bodies that regulate mortgage brokers we will continue to see more of the same.

  2. Like Ron said, all excellent points.

    Me, I’d like to see:
    – A federal regulator.
    – All types of fraud punished with a heavy hand. I would include rentals being sent in as a primary residence or second home. Argue all you want, it’s still fraud and I would add; this is fraud for profit, not for shelter.
    – Easier ways to report fraud to regulators. I wouldn’t be surprised to hear 99% of fraud is not reported to regulators because 1) It’s not easy and 2) Fear of repercussions.

Your email address will not be published. Required fields are marked *

More Stories
canadian mortgages
Majority of Canadian Buyers Borrowing Their Maximum Approved Mortgage
Copy link