Vansanity posted a link to this story in the Vancouver Sun. Two men have just been charged for one of the biggest financial frauds in BC history:
Gill’s method of operation — as described in the Benchers’ Bulletin (the law society’s in-house publication) — was to develop a property and sell it to one of his nominees. The nominee would arrange a mortgage on the property and then sell it to an innocent purchaser.
The purchaser, in turn, would arrange financing from his lending institution and forward the money to Wirick on his undertaking to pay off the original mortgage loan and register a new first mortgage. But rather than disburse the money as promised, Wirick simply paid the funds to Gill and his Vanview group of companies.
In many cases, Wirick would provide false discharge documents, and a portion of the purloined money would be used to keep the original mortgage payments current, so neither the purchaser nor the original mortgage lender would be any wiser.
The new mortgage lender, meanwhile, naturally assumed he had obtained a first mortgage against the property. But since the original mortgage hadn’t really been discharged, he was actually in second position.
In some cases, this process was repeated, enabling Gill to mortgage the property many times over and generate more money than it was worth. Eventually the scheme collapsed, revealing a tangled web of transactions, mortgages and competing claims.
When the scheme was uncovered, law society officials took over Wirick’s practice and audited his books and records. They also obtained access to Gill’s records through the court, which gave them a good idea of where the money went.
Real estate always goes up, but not fast enough for Gill & Wirick it seems..
