Moishe Alexander Lending News, Alberta, August 4, 2009 – The decision was released Friday. Justice Vital Ouellette ruled that Scott Park, 43, is not guilty of conspiracy to commit fraud. This is seven months after Ouellette quashed over 40 connected charges. Scott Park is an urban lawyer and he has now been cleared on all counts.
“Although there are certain transactions or documentation which raise suspicion and probability of membership by Scott Park in the conspiracy, there is insufficient evidence to establish his membership in the conspiracy beyond a reasonable doubt,” Ouellette wrote in her lengthy judgment. “There is no doubt whatsoever that the real estate practice carried on by Scott Park left much to be desired, but that is not the issue before this court.”
The case is believed to be the largest mortgage fraud in Alberta history.
Last year, Gohar Pervez pleaded guilty to 54 counts of fraud that netted him more than $1.8 million in profits in less than half a decade. The scam, which took place from 2001-05, involved more than 19 lending institutions, over 100 properties and almost 300 real-estate transactions.
Four others have also been sentenced in connection with the scam scheme.
Pedro Brito, 33, pleaded guilty to 10 counts of fraud and was sentenced to one year in jail. Harkamaljit Kahlon, 30, was sentenced to three years in prison after he pleaded guilty to 12 counts of fraud. Rodrigo Caroca, 33, pleaded guilty to five counts of fraud and was sentenced to 90 days in jail.
In January, paralegal Terry Ellis, 61, was sentenced to more than five years in prison after she was convicted of 12 counts of fraud and one count of forgery. She is believed to be the first Canadian convicted of committing an economic fraud on behalf of a criminal organization.
The typical fraud would begin when Pervez bought a ramshackle house. He would then find a straw buyer to purchase the home for much more than he had paid. The straw buyers rarely saw the homes they bought and were only paid for the use of their names to acquire the mortgages.
While the straw buyer’s name was on the title, Pervez would manage the house, often renting it out and using the proceeds to pay the mortgage. He would fix up the properties and force appraisers to over-value the homes. After the bank forwarded the mortgage money, Pervez or one of his associates would assume the mortgage and eventually sell the property to a third person.