Mounties investigate further fraud charges against former Liberal senator
This action put the bank at a potential risk, constituting a fraud. RCMP CPL. GREG HORTON LEAD INVESTIGATOR OF SENATE EXPENSE SCANDAL
OTTAWA — The RCMP have expanded their breach of trust investigation of former senator Mac Harb to include allegations he committed mortgage fraud when he applied for loans on property he claimed to own.
In a statement sworn last month, Cpl. Greg Horton says he is now investigating the former Liberal MP and senator over Royal Bank of Canada mortgages on two properties that Harb owned in Cobden and Westmeath, Ont.
Details of the mortgages were uncovered during Horton’s investigation of expenses Harb charged to the Senate while listing the homes outside of Ottawa as his primary residences.
The mortgage transactions were cited in a previous documen t released last fall, but Horton, the lead investigator of the Senate expense scandal, now believes they may have constituted a crime.
Horton alleges that Harb secured a $ 170,000 mortgage on a home in Cobden in December 2007 and then, only hours later, transferred 99.99 per cent ownership to a diplomat from Brunei named Magdalene Teo.
The change in ownership was never reported to the RBC, Horton said in his statement, called an Information to Obtain a production order, or ITO.
“This action put the bank at a potential risk, constituting a fraud,” Horton said.
Then, in 2010, Harb claimed to be the sole owner of the Cobden property when he applied for a $ 240,000 mortgage on his new home in Westmeath, Ont., when he in fact owned only 0.01 per cent of it — a share worth only $ 58, Horton calculated, based on the home’s $ 567,000 selling price.
“This was a fraudulent misrepresentation of the facts on the Westmeath house mortgage application,” Horton wrote.
Neither Harb nor his lawyer, Sean May, could be reached for comment Friday.
Horton also says the RCMP w ere provided information about Harb’s mortgage by RBC mortgage specialist Sheila Wilson, who told him the bank was never informed of the transfer to Teo.
“She stated that if Senator Harb had defaulted on the mortgage, it is unlikely that the bank would have lost money in that situation, but that it would have cost the bank a lot more in legal fees to resolve the matter,” Horton wrote. “She viewed these actions as fraud in relation to his mortgage obligations with RBC.”
It is unclear why Wilson provided what appears to be private information about Harb’s banking to police without a court order. In December, Horton sought and received a court order compelling the Royal Bank of Canada to produce documents it held relating to the mortgage application. The bank provided Horton the records he requested on Dec. 20, according to a report he filed in court.
In an email to Horton, Teo explained she had a “personal friendship” with Harb but no business relationship.