Enforcement order

IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006,
S.O. 2006, c.29, as amended (the “Act”), in particular sections 19 and 21;

AND IN THE MATTER OF Dinesh Khanna also known Dinish Khanna and Dennis Khanna

NOTICE OF PROPOSAL TO REVOKE LICENCE

TO: Dinesh Khanna also known Dinish Khanna and Dennis Khanna

TAKE NOTICE THAT pursuant to sections 19 and 21 of the Act, and by delegated authority from the Chief Executive Officer of the Financial Services Regulatory Authority of Ontario (the “Chief Executive Officer”), the Head, Licensing and Risk Assessment, Market Conduct (the “Head of Licensing”) is proposing to revoke the mortgage agent licence issued to Dinesh Khanna also known as Dinish Khanna and Dennis Khanna.

Details of the reasons for this proposal are described below. This Notice of Proposal includes allegations that may be considered at a hearing. The allegations contained in this Notice of Proposal are unproven until the Financial Services Tribunal has determined their validity or, if no hearing is requested, the Chief Executive Officer has issued an order.

SI VOUS DÉSIREZ RECEVOIR CET AVIS EN FRANÇAIS, veuillez nous envoyer votre demande par courriel immédiatement à : contactcentre@fsrao.ca.

YOU ARE ENTITLED TO A HEARING BY THE FINANCIAL SERVICES TRIBUNAL (THE “TRIBUNAL”) PURSUANT TO SECTIONS 21(2) AND 21(3) OF THE ACT. A hearing by the Tribunal about this Notice of Proposal may be requested by completing the enclosed Request for Hearing Form (Form 1) and delivering it to the Tribunal within fifteen (15) days after this Notice of Proposal is received by you. The Request for Hearing Form (Form 1) must be mailed, delivered, faxed or emailed to:

Address:

Financial Services Tribunal
25 Sheppard Avenue West, 7^th Floor
Toronto, Ontario M2N 6S6

Attention: Registrar

Fax: 416-226-7750

Email: contact@fstontario.ca

TAKE NOTICE THAT if you do not deliver a written request for a hearing to the Tribunal within fifteen (15) days after this Notice of Proposal is received by you, orders will be issued as described in this Notice of Proposal.

For additional copies of the Request for Hearing Form (Form 1), visit the Tribunal’s website at www.fstontario.ca

The hearing before the Tribunal will proceed in accordance with the Rules of Practice and Procedure for Proceedings before the Financial Services Tribunal (“Rules”) made under the authority of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended. The Rules are available at the website of the Tribunal: www.fstontario.ca. Alternatively, a copy can be obtained by telephoning the Registrar of the Tribunal at 416-590-7294, or toll free at 1-800-668-0128 extension 7294.

At a hearing, your character, conduct and/or competence may be in issue. You may be furnished with further and or other particulars, including further or other grounds, to support this proposal.

REASONS FOR PROPOSAL

I. INTRODUCTION

These are the reasons for the proposal by the Head of Licensing to revoke the mortgage agent licence unknowingly issued to Dinesh Khanna also known as Dinish Khanna and Dennis Khanna (“Khanna”). Khanna applied for and was issued a licence as a new licensee, under an altered first name, Dinish Khanna.

II. BACKGROUND

A. Licensing History

From July 1, 2008 until December 22, 2015, Khanna was licensed as a mortgage broker (licence # M08000505), under the name Dinesh Khanna (also known as Dennis Khanna).

During the period from July 1, 2008 until December 22, 2015, Khanna was also the principal broker of Metro Financial Planning Ltd. (“MFP”) (brokerage licence # 10696). At that time, Khanna was the sole mortgage broker, majority shareholder, sole director, sole officer and controlling mind of MFP.

By Orders dated May 9, 2017, the Superintendent of Financial Services (“Superintendent”) of the Financial Services Commission of Ontario (“FSCO”) refused to issue a license under the Act to Khanna and revoked the license of MFP after a hearing before the Financial Services Tribunal (the “Tribunal”).

Khanna obtained a new mortgage agent licence (licence # M21001272) after submitting an application intended for individuals who have never been licensed and under an alternate spelling of his legal name, Dinish Khanna.

B. Previous Licence Revocation of Khanna and MFP

On December 22, 2015, the Superintendent of FSCO issued a Notice of Proposal to Revoke both the mortgage brokerage license of MFP and the mortgage broker license of Khanna (licence #M08000505) pursuant to subsection 19(1) of the Act (the “Revocation Notice”). The Superintendent also issued an Interim Order Suspending both MFP’s brokerage license and Khanna’s mortgage broker license, which was extended until the Revocation Notice was finally determined by the Tribunal.

On December 24, 2015, Khanna, on behalf of himself and as principal broker for MFP, requested a hearing before the Tribunal.

Khanna’s license, which was the subject of the forementioned revocation proceedings, expired on March 31, 2016 as he did not file an application for renewal prior to expiry.

On May 5, 2016, Khanna submitted a renewal application for his mortgage broker licence.

On September 7, 2016, the Superintendent issued a Notice of Proposal to refuse Khanna’s mortgage broker licence application (the “Refusal Notice”).

On September 14, 2016, Khanna requested a hearing with respect to the Refusal Notice before the Tribunal.

The Tribunal held a 9-day hearing to address both the Revocation Notice and the Refusal Notice, which took place between November 4, 2016 and December 1, 2016. During the hearing, 8 complainants detailed encounters with Khanna that included:
1. forged signatures on mortgage documents,
2. unlicensed/inappropriate/predatory mortgage administration activities,
3. non-disclosure of Khanna’s relationships with lenders (i.e. spouse, sister-in- law, nephew and brothers-in-law),
4. flawed mortgage suitability assessments,
5. misappropriated mortgage proceeds,
6. numerous fraudulent mortgage transactions performed without their knowledge or consent,
7. provision of false information/documentation,
8. non-compliance with the Act and Regulations and record keeping obligations
9. inappropriate overtures of a sexual or romantic nature, and
10. inappropriate touching.

On May 8, 2017, the Tribunal ordered that the Superintendent carry out the proposal to revoke MFP’s mortgage brokerage license and refuse Khanna’s mortgage broker license application. The Tribunal upheld the Superintendent’s previous determination that Khanna was not suitable to be licensed under the Act.

Specifically, the Tribunal found that “Mr. Khanna’s misconduct has a predatory element to it. He clearly operated his business to service vulnerable individuals who are in situations of severe financial hardship, have few other viable options and lack the sophistication to ask the right questions or seek independent advice to avoid being victimized”.¹

15. The Tribunal further noted that “...we find that on the terms of clear, cogent and convincing evidence that Mr. Khanna’s misconduct calls into question his honesty and integrity and his willingness to abide by the law”.² The Tribunal also noted that “The misconduct disclosed by the Complainants is very serious and significant harm has been caused to members of the public. The risk of further harm to the public if he is granted a licence is, accordingly, significant.”³

On May 9, 2017, pursuant to subsection 21(4) of the Act, the Superintendent issued Orders to revoke MFP’s mortgage brokerage license and to refuse Khanna’s application for a mortgage broker license.

Khanna, on behalf of himself and as principal broker for MFP, submitted a Request for Review of the Tribunal’s decisions. The Tribunal denied the Request for Review and upheld the decision of May 8, 2017. On June 26, 2017 the Superintendent was directed to carry out the proposals to revoke MFP’s mortgage brokerage license and to refuse Khanna’s mortgage broker license application.

C. False Information on May 2020 License Application

On May 21, 2020, Khanna submitted an application for a mortgage agent licence. An alias of “Dennis Khanna” was indicated on this application (“2020 Application”). Khanna disclosed on the 2020 Application that he had been previously licensed as a mortgage broker (licence #M08000505). The 2020 Application was sponsored by the brokerage 2380376 Ontario Limited, operating as Ambassador Mortgage Solution (licence # 12407) (“Ambassador”).

Khanna, on his 2020 Application, did not disclose his prior licensing refusal in 2017 nor that MFG, the brokerage for which he was principal broker, also had its licence revoked in 2017. Specifically, Khanna answered “no” to the question:
“Have you ever been successfully sued or has a complaint ever been made against you to a regulatory body in any province, territory, state, or country that was or is, based in whole or in part, on fraud, theft, deceit, misrepresentation, forgery, or similar conduct; or based in whole or in part, on professional negligence or misconduct (including claims paid by your errors and omissions insurance carrier or bonding company)?” [emphasis added]

Khanna did not disclose any criminal charges or convictions on his 2020 Application. Specifically, Khanna answered “no” to the question:
“Have you ever pleaded guilty or been found guilty of an offence under any law in any province, territory, state or country, or are you currently the subject of any charges?” [emphasis added]

In making the 2020 Application, Khanna swore to have truthfully answered all questions, and certified that:
“Providing false or misleading information in this application/declaration and/or any attachment is an offence under the MBLAA, and doing so may be sufficient grounds to reject the application/declaration, revoke or refuse to renew a licence or, if you are an officer/director/partner, result in refusal of the brokerage or administrator licence applied for, or result in your prosecution.”

By confirming the 2020 Application, Khanna also swore to have “truthfully answered all questions contained within this electronic application and consent to the Collection, Use and Disclosure by FSRA of this information”.

During their review of the 2020 Application, FSRA contacted Khanna regarding his undisclosed criminal and disciplinary record. In response, Khanna withdrew his 2020 Application.

Khanna never provided any new information or demonstrated a material change in circumstances regarding the previous refusal of his licence application.

D. False Information on March 2021 License Applications

a. March 1, 2021 Application

On March 1, 2021, Khanna again submitted an application for licensing, this time as a new, never previously licensed, mortgage agent (“First 2021 Application”). Khanna submitted his First 2021 Application under an altered first name of “Dinish” and an alias of “Dinesh”. The First 2021 Application was sponsored by Ambassador.

A new, never previously licensed, mortgage agent application is intended for individuals who have never held a mortgage agent or broker licence in Ontario. As Khanna was previously licensed, neither he nor Ambassador should have submitted this new licensee application.

Notably, given Ambassador’s involvement in the 2020 Application, they ought to have been aware that this new application provided an altogether new first name and alias and that Khanna was not an individual who had never been licensed under the Act.

Khanna, on his First 2021 Application, answered “mortgage agent licence previously applied about 6 months ago and was refused. and i [sic] subsequently withdrew the application” to the question:
“Have you ever been refused registration or a licence under any legislation which required registration or licensing to deal with the public in any capacity (e.g. insurance agent, RIBO broker, securities dealer, motor vehicle dealer etc.) in any province, territory, state, or country; have you held such a licence and been the subject of a disciplinary proceeding that resulted in a penalty being imposed (e.g. suspension, termination, reprimand, surrender, etc.); are you the holder of such a licence and currently the subject of an investigation or upcoming disciplinary proceeding that may result in a penalty being imposed?” [emphasis added]

29. Khanna further answered “found guilty of 3 counts of sexual assault, and received 1 year probation and 80 hours of community work. in [sic] the date of feb 28 2019. Got exonerated from all fraud charges at the same time. Approximately 5 years I admitted to a small charge against the TD Bank for a personal matter [sic]” to the question:
“Have you ever pleaded guilty or been found guilty of an offence under any law in any province, territory, state or country, or are you currently the subject of any charges?” [emphasis added]

However, Khanna’s criminal record shows that he was convicted of an additional charge under the Criminal Code of Canada on March 13, 2018.

Khanna also answered “Metro financial broker licence was revoked on Dec 15, 2015 [sic]” to the question:
“Have you ever been successfully sued or has a complaint ever been made against you to a regulatory body in any province, territory, state, or country that was or is, based in whole or in part, on fraud, theft, deceit, misrepresentation, forgery, or similar conduct; or based in whole or in part, on professional negligence or misconduct (including claims paid by your errors and omissions insurance carrier or bonding company)?” [emphasis added]

However, Khanna did not disclose that he was previously licensed as a mortgage broker, that his license had previously been the subject of revocation proceedings before he reapplied for renewal which ultimately resulted in a refusal that was upheld by the Tribunal.

In submitting the First 2021 Application, Khanna swore to have truthfully answered all questions, and certified that:
“Providing false or misleading information in this application/declaration and/or any attachment is an offence under the MBLAA, and doing so may be sufficient grounds to reject the application/declaration, revoke or refuse to renew a licence or, if you are an officer/director/partner, result in refusal of the brokerage or administrator licence applied for, or result in your prosecution.”

By confirming the First 2021 Application, Khanna also swore to have “truthfully answered all questions contained within this electronic application and consent to the Collection, Use and Disclosure by FSRA of this information”.

When Khanna completed the “affidavit” section of the First 2021 Application on the FSRA licensing system, he was required to e-sign his name. At that step he entered the e-signature of “Dinish Khanna” as opposed to his legal name “Dinesh Khanna”.

As this was a new licensee application, a CPIC was performed which did not generate any criminal record as the name searched was “Dinish Khanna” instead of his correct legal name “Dinesh Khanna”.

Based on the false information, including false name, provided on the First 2021 Application, and the clear criminal record search, Khanna was granted a licence which expired on March 31, 2021.

b. March 29, 2021 Application

On March 29, 2021, Khanna submitted an application to renew his mortgage agent licence (“Second 2021 Application”). Khanna submitted his Second 2021 Application, yet again, under the same altered first name of “Dinish” and an alias of “Dinesh”. The Second 2021 Application was once more sponsored by Ambassador.

Khanna, on his Second 2021 Application, answered “previously disclosed” to the question:
“Have you ever been refused registration or a licence under any legislation which required registration or licensing to deal with the public in any capacity (e.g. insurance agent, RIBO broker, securities dealer, motor vehicle dealer etc.) in any province, territory, state, or country; or have you held such a licence and been the subject of a disciplinary proceeding that resulted in a penalty being imposed (e.g. suspension, termination, reprimand, surrender, etc.); or are you the holder of such a licence and currently the subject of an investigation or upcoming disciplinary proceeding that may result in a penalty being imposed?”

Khanna further answered “previously advised” to the question:
“Have you ever pleaded guilty or been found guilty of an offence under any law in any province, territory, state or country, or are you currently the subject of any charges?”

However, the information Khanna disclosed on this question was “metro financial broker licence was revoked on Dec 15, 2015 [sic]”.

Khanna did not disclose that he was previously licensed as a mortgage broker or that his license had previously been the subject of revocation proceedings before he reapplied for renewal which ultimately resulted in a refusal that was upheld by the Tribunal. Furthermore, Khanna also did not disclose all his criminal convictions.

In making the Second 2021 Application, Khanna again swore to have truthfully answered all questions, and certified that:
“Providing false or misleading information in this application/declaration and/or any attachment is an offence under the MBLAA, and doing so may be sufficient grounds to reject the application/declaration, revoke or refuse to renew a licence or, if you are an officer/director/partner, result in refusal of the brokerage or administrator licence applied for, or result in your prosecution.”

By confirming the Second 2021 Application, Khanna also swore to have “truthfully answered all questions contained within this electronic application and consent to the Collection, Use and Disclosure by FSRA of this information”.

Again, when Khanna completed the “affidavit” section of the Second 2021 Application on the licensing system, he was required to e-sign his name. At that step he entered the e-signature of “Dinish Khanna” as opposed to his legal name “Dinesh Khanna”.

Based on the false information, including false name, provided on the Second 2021 Application, Khanna’s licence was renewed.

On April 22, 2021, FSRA received an enquiry from another licensee as to whether Dinesh Khanna was licensed and operating under a different spelling of his first name “Dinish”.

Based on this new information, FSRA identified that Khanna had provided false information and a falsified version of his legal name to obtain new licensing under the Act.

III. GROUNDS FOR REVOCATION OF LICENCE

Section 4 of Ontario Regulation 409/07 provides “an individual whose mortgage broker’s licence has been revoked, or whose application for a mortgage broker’s licence or for renewal of such a licence has been refused, cannot apply for a mortgage broker’s licence unless:
1. 12 months have passed since the revocation or refusal; and
2. the individual satisfies the Chief Executive Officer that new or other evidence is available or that material circumstances have changed.

Section 19(1) of the Act states that the Chief Executive Officer may, by order, revoke a licence in any of the circumstances in which he or she is authorized to suspend a licence.

According to section 18(1) of the Act, such circumstances are:
1. if the licensee ceases to satisfy the prescribed requirements for issuance or renewal, as the case any be, of the licence;
2. if the Chief Executive Officer believes, on reasonable grounds, that the licensee is no longer suitable to be licensed having regard to the circumstances, if any, prescribed for the purposes of subsection 14(1) or 16(4), as the case may be, and such other matters as the Chief Executive Officer considers appropriate;
3. if the licensee contravenes or fails to comply with a requirement established under this Act; or
4. if such other circumstances as may be prescribed.

Section 10 of Ontario Regulation 409/07 states that, in “determining whether an individual is not suitable to be licensed as a mortgage broker or agent, the Chief Executive Officer is required to have regard to the following prescribed circumstances:
1. Whether the individual’s past conduct affords reasonable grounds for belief that he or she will not deal or trade in mortgages in accordance with the law and with integrity and honesty.
2. Whether the individual is carrying on activities that contravene or will contravene the Act or the regulations if he or she is licensed.
3. Whether the individual has made a false statement or has provided false information to the Chief Executive Officer with respect to the application for the licence.”

Furthermore, as set out in section 45(1) of the Act “No person or entity shall give false or misleading information to the Chief Executive Officer or a person designated by the Chief Executive Officer in respect of any matter related to this Act or the regulations.”

The Head of Licensing is satisfied that Khanna contravened section 45(1) of the Act, by failing to disclose his legal name, full criminal record, previous licensing history and licence refusal in the 2020 Application, the First 2021 Application, and the Second 2021 Application.

Khanna’s conduct speaks to a concerted effort to mislead FSRA into thinking he was a different person and new licensee after his attempt to obtain a license under the Act in May 2020 under his legal name was unsuccessful. The fact that the licensing applications dated May 21, 2020, March 1, 2021 and March 29, 2021 were submitted through the same sponsoring brokerage suggests collusion between Khanna and the brokerage to provide false information willfully and knowingly to FSRA.

Given Khanna’s criminal and regulatory history coupled with his current misconduct, the Head of Licensing believes that he is not suitable for licensing and is not a candidate for supervisory conditions given the risk of public harm. To obtain a license under the Act, Khanna was required to demonstrate pursuant to section 4(b) of Ontario Regulation 409/07 “that new or other evidence is available or that material circumstances have changed” since May 8, 2017 when the Tribunal ordered that the Superintendent carry out the proposal to revoke MFP’s mortgage brokerage license and refuse Khanna’s mortgage broker license application on the basis that they were not suitable for licensing. Khanna has failed to provide any such evidence. In fact, his conduct and provision of a fake name was an attempt to circumvent an accurate assessment of his current suitability.

Khanna’s false statements on the 2020 Application as well as the First and Second 2021 Licensing Applications prevented FSRA from making an accurate determination of whether they should be accepted. The questions posed to those who apply for licenses or renewals under the Act are vitally important to FSRA in assessing the suitability and qualifications of applicants. These questions are a necessary screening tool to protect the public from unqualified, unsuitable and unscrupulous persons.

The Head of Licensing is satisfied that Khanna’s conduct in obtaining his current license provides reasonable grounds for the belief that he has demonstrated an unwillingness to operate in the mortgage industry in accordance with the law or with integrity and honesty.

The Head of Licensing is not satisfied that Khanna has shown that new or other evidence is available or that material circumstances have changed since his license refusal. In fact, by obtaining his license through deceit, Khanna has shown that he has not changed and is unwilling to change his behaviour. Nothing has changed since the Tribunal found that there was significant risk associated with granting a license to Khanna. Khanna is still a danger to the public and should not be licensed under the Act.

For these reasons, and such further and other reasons as may come to FSRA’s attention, the Head of Licensing proposes to revoke Khanna’s mortgage agent licence.

DATED at Toronto, Ontario, June 11, 2021

Original signed by

Wendy Horrobin
Head, Licensing and Risk Assessment, Market Conduct

By delegated authority from the Chief Executive Officer

Si vous désirez recevoir cet avis en français, veuillez nous envoyer votre demande par courriel immédiatement à : contactcentre@fsrao.ca.

¹ Metro Financial Planning Limited and Dinesh Khanna v. Ontario (Superintendent Financial Services), 2017 ONFST 4, [MFP et al. v. Ontario] para 282
² MFP et al. v. Ontario, para 283(d.)
³ MFP et al. v. Ontario para 295(b.)