20 incidents, 4 suspects, $4.5M stolen: Inside the real estate fraud targeting vulnerable homeowners

The first suspect, Barchichat, is set to appear in court on June 4 via videoconference under charges of “fraud exceeding $5,000, use of forged documents, and conspiracy.” The other suspects were released from custody on a condition they were to appear in court at a later date.

Montreal police stated that the four men were involved in a real estate scheme specifically targeted at homebuyers who were financially vulnerable, CTV News notes. They allegedly posted online advertisements to lure in homeowners and earn their trust before offering debt solution services and other remedies for their financial problems.

But the scheme was much more insidious than a false promise of help.

“In the process, victims were taken to a notary and, without realizing it, signed documents transferring ownership of their property,” the police stated in a release.

The investigation began with a probe in 2023 and covered approximately 20 alleged incidents involving real estate fraud and a vehicle rental scheme.

The scheme affected residents in multiple Quebec municipalities including Dollard-des-Ormeaux, Longueuil, L’Épiphanie, Sorel, Lambton and Sainte-Praxède in the Eastern Townships, the outlet reported.

Real estate fraud across the nation

While the Montreal case is alarming, it is far from isolated. Real estate fraud has become an increasingly common threat for homeowners across Canada.

The Financial Consumer Agency of Canada (FCAC) identifies three different types of real estate fraud. Title fraud occurs when bad actors steal your personal information to take the title of your property and use it to sell the residence out from under you, or apply for a mortgage against it. Foreclosure fraud happens to homeowners that are having trouble making their payments, which is what occurred in the most recent Montreal real estate fraud case. Scammers trick financially vulnerable homeowners into transferring their property title to them in exchange for a loan or other credit. Mortgage fraud, or application fraud, is when a person provides false information on a mortgage application — or when an individual falsifies a mortgage application for another person or encourages them to do so.

These types of scams have occurred across the nation in recent years.

In January of 2022, a Toronto family left Canada to work overseas. Months later, they learned their property was sold entirely without their knowledge. According to Toronto police, a man and woman used fake IDs to pose as the homeowners, then hired a realtor to list the house. Police confirmed the house was sold and new homeowners took possession of the property.

In 2023, Montreal police arrested 17 people in connection with an alleged real estate fraud scheme worth more than $5 million. Police stated that the team used fake IDs to secure loans against the value of five different properties that they did not legally own. Once the financing was received from private lenders, it was then quickly withdrawn. At the time, the real property owners were “tied to mortgages they never took out and the lenders have lost all the money they lent out,” according to police insight.

More recently, the Financial Services Regulatory Authority of Ontario (FSRA) released its first Enforcement Annual Report for the 2024–25 years and signalled a shift towards stronger enforcement of regulations in the mortgage space. In fact, the regulator started 100 enforcement actions — mostly against mortgage brokers — and imposed over $1.2 million in monetary penalties for inappropriate actions.