Canadian crime and risk management expert Chris Mathers explained that while real estate fraud is just the newest form of identity theft in Canada, it's potential for financial harm to its victims is enormous.

Mortgage fraud is an absolute epidemic, a huge problem in the developed countries, especially here in Canada," said Mathers, a specialist speaking at the International Fraud Investigators Conference hosted by the Toronto Police Services. "And I don't see it changing anytime soon."

Mathers said while credit card and mass marketing scams are still a large concern, the potential for real estate fraud is huge.
So how big is the threat to Canadian homeowners?

Just asked mortgage fraud victims Ravi Raina of Toronto or Victor and Barbara Hanisch of Winnipeg. Both families fell prey to con artists using classic variations of real estate fraud scams.

Variations on Mortgage Fraud in Canada 

One approach is Title Fraud. This scam commonly involves criminals using stolen identities or forged documents to illegally obtain a registered owner's title. The con artist then gets a mortgage on the property and disappears with the money.

Another approach is Title Transfer Fraud. This involves a criminal persuading, conning or coercing the homeowner into signing over title to their property. Once that transfer document is signed and delivered to the Land Registry Office, the original homeowner no longer owns their property, and the thieves can do anything they want including mortgaging, selling or occupying it.

But no matter which type of real estate fraud is committed against the titleholder, it quickly escalate into a nightmare for the real owners, who are left fighting the system for months, even years.

In the case of Ravi Raina and his family, simple "title fraud" was committed on their $650,000 dream home in Toronto.

Just as the new immigrants to Canada were settling into their place, con artist Emanuele Tesoro, a 47 year old with a history in the illegal betting business, was onto a new scam so simple, it would later amaze authorities.

Tesoro simply drove one upscale neighbourhood, jotting down addresses. He later ran each address through Ontario's Land Title Registry which told him who owned the home and the complete details about their mortgage(s).

Armed with that critical information Tesoro picked up a couple of legal "do-it-yourself" real estate forms, available at any stationary store. Using a simple bill of sale, the con artist filled it in as if he had just bought the Rainas' home, simply forging a lawyer's and Ravi Raina's signatures.

Later, Tesoro took the home-made document to a land title registry office, paid the land transfer tax ($9,500) and registration fee. That was it!! A complete stranger now owned legal title to the Rainas' home.

And sadly, it's still that simple in nearly every province.

For Victor and Barbara Hanisch, the con was a little more complicated. Like thousands of Canadian homeowners each year, due to health and financial reasons, the Hanisches fell behind in property taxes to the City of Winnipeg.

This embarassing little financial fact was easy for ID thieves to discover since every year all municipalities publish a list of homeowners falling short on their property tax payments. A private company also publishes a weekly list of property owners going through foreclosure proceedings.

But it's seemed like a miracle with "Richard" appeared on their doorstep with the perfect solution to the Hanisches money problems. "He just dropped by, out of the blue all of a sudden," Victor said.

Richard told the couple he represented a group of investors. He offered to pay their back taxes and a couple of liens on their homes. All they had to do was make one easy payment each month.

Victor and Barbara couldn't believe their good fortune. They signed some papers after a second meeting with Richard. They thought they were signing something like a mortgage and their home would be used as collateral.

But the papers they signed weren't a loan or mortgage agreement at all. The papers transferred ownership of their home over to Richard, while requiring the Hanisches to pay him a monthly fee. When they stopped paying, Richard started eviction proceedings and the Hanisches were shocked to discover they no longer owned their home.

And as the producers of the consumer television show CBC Markerplace discovered, neither did another six families in Winnipeg. All were conned out of their home's ownership by the same man.

So what happened to these Canadian victims of mortgage fraud? We'll give you the details in the third and final part of our series on Real Estate fraud in Canada.