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An order that is made regarding a licence holder reflects a situation at a particular point in time. The status of a licence holder can change. Readers should check the current status of a person’s or entity’s licence on the Licensing Link section of FSRA’s website. Readers may also wish to contact the person or entity directly to get additional information or clarification about the events that resulted in the order.
Financial Services Regulatory Authority of Ontario

IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c.29, as amended (the “Act”), in particular sections 38 and 39;

AND IN THE MATTER OF Po Yuk (Peggy) Chan.


NOTICE OF PROPOSAL TO IMPOSE ADMINISTRATIVE PENALTIES

TO: Po Yuk (Peggy) Chan

TAKE NOTICE THAT pursuant to section 39 of the Act, and by delegated authority from the Chief Executive Officer, the Director, Litigation and Enforcement (the “Director”) is proposing to impose the following sixteen (16) administrative penalties in the total amount of $83,600 on Po Yuk Chan:

  1. Eleven (11) administrative penalties in the total amount of $58,600, for receiving remuneration from a person or entity other than her registered brokerage, contrary to section 4(1) of Ontario Regulation 187/08;
  2. Five (5) administrative penalties in the total amount of $25,000 for giving false or deceptive information or documents when dealing in mortgages in Ontario, contrary to section 43(2) of the Act.

Details of these contraventions and reasons for this proposal are described below. This Notice of Proposal includes allegations that may be considered at a hearing.

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 39(2) AND 39(5) 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, 7th 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.

TAKE FURTHER NOTICE of the payment requirements in section 4 of Ontario Regulation 192/08, which states that the penalized person or entity shall pay the penalty no later than thirty (30) days after the person or entity is given notice of the order imposing the penalty, after the matter is finally determined if a hearing is requested or such longer time as may be specified in the order.

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

  1. These are the reasons for the proposal by the Director to impose sixteen (16) administrative penalties in the total amount of $83,600 on Po Yuk (Peggy) Chan (“Chan”).

II. BACKGROUND

A. FSRA Licensing History

  1. Chan was initially licensed as a mortgage agent (licence # M08000648) under the Act on July 1, 2008. Her licence expired on March 31, 2023.
  2. Chan was terminated by her brokerage, Northwood Mortgage Ltd. (licence # 10349) (“Northwood”), on December 9, 2022 due to a breach of her contract. Chan was not authorized to deal or trade on behalf of any other brokerage from December 9, 2022 until her licence expired.

B. Dealing and Renumeration Outside the Brokerage and False or Deceptive Information or Documents

The Complaint
  1. On May 24, 2022, FSRA received a complaint from a borrower, KT, that Chan falsified mortgage documents and obtained a mortgage on KT’s property without his knowledge or authorization.
  2. KT also alleged that Chan arranged to have the mortgage proceeds deposited into a joint bank account Chan directed him to open with her. Chan transferred money from the joint account to her own account without KT’s knowledge or authorization.
  3. On February 29, 2024, Chan was interviewed by FSRA investigators (the “Chan Interview”).
Transaction #1: The KT Mortgage
  1. In Spring 2022, KT was looking for a $200,000 loan to supplement his household expenses.
  2. Chan offered KT a personal interest free loan for $200,000.
  3. In exchange for this interest free loan, KT was required to assist Chan in earning commission by registering a line of credit in the amount of $800,000 on his property. Chan explained to KT that he did not need to use the line of credit and was only required to register it.
  4. Chan provided KT with the documents for both the $200,000 personal loan and what KT believed was the $800,000 line of credit but were actually documents for a private mortgage.
  5. KT stated that Chan only showed him the first page of each document and flipped through the remaining pages directing him where to sign without allowing him to review the documents. KT was not given a copy of the documents after signing.
  6. Chan also offered to open a joint bank account with KT to help fund his daughter’s education by making periodic payments into the joint account. KT agreed and opened a joint bank account with Chan on May 16, 2022.
  7. After the documents were signed and the joint bank account was opened, KT discovered a deposit was made of $654,639.42 into the joint account on May 17, 2022. In addition, there was a $100,000 transfer out of the account to Chan’s personal bank account on May 18, 2022. As a result of this activity, KT froze the account.
  8. Notwithstanding representations made to KT about the line of credit, KT learned that Chan had in fact placed an $800,000 mortgage on his property. The proceeds of the mortgage had been deposited into the joint account.
  9. The parcel register for KT’s property shows a mortgage of $800,000 registered to a private lender on May 17, 2022.
  10. As a result of Chan’s actions, KT was put in a vulnerable financial position.
  11. During the Chan Interview, Chan admitted to acting as KT’s mortgage agent for the transaction, earning a broker fee of $7,000 while not processing the transaction through her brokerage. She also admitted to removing $100,000 from the joint account without KT’s knowledge or authorization.
Transaction #2: The YHC First Mortgage
  1. In 2018, Chan asked YHC to apply for a mortgage in the amount of $50,000 so Chan could receive a commission. YHC agreed.
  2. YHC is an older adult and does not speak, read, or write English. Chan explained the loan amount and payment terms of the $50,000 mortgage to YHC. The mortgage commitment letter, dated June 11, 2018, had the Northwood logo at the top of the page, the brokerage’s contact details at the bottom of the page, and was written in English.
  3. The mortgage commitment letter stated it was issued and signed by lender RW of City Can Financial. Chan was the sole proprietor of City Can Financial from 2009 to 2014.
  4. On February 2, 2023, the Principal Broker of Northwood confirmed that the mortgage commitment letter was not issued by the brokerage, and that the brokerage does not have any records for a lender named RW.
  5. During the Chan Interview, Chan admitted that she created the mortgage commitment, and that RW is an Australian private lender. Chan said she included the brokerage’s logo on the commitment to show YHC that she worked with the brokerage.
  6. Further, although Chan presented YHC with a mortgage commitment for $50,000, YHC later discovered that a mortgage had been registered on her property for $430,000 on July 3, 2018.
  7. During the Chan Interview, she admitted to acting as YHC’s mortgage agent and earning a broker fee of $4,300 for the YHC first mortgage transaction. She also admitted the transaction was not processed through her brokerage.
Transaction #3: The YHC Second Mortgage
  1. In 2021, YHC signed documents relating to a request from Chan for YHC to hold onto $100,000 for her.
  2. YHC did not review or understand the documents she signed. She also did not receive a copy of the documents.
  3. Three weeks later, Chan gave YHC a cheque for $100,000.
  4. YHC later discovered that the documents she signed were for a private mortgage that was registered on her property on September 16, 2021 in the amount of $300,000.
  5. YHC had previously opened a joint account with Chan who offered to pay YHC a referral bonus fee for every new client referred to Chan. YHC’s mortgage funds were deposited into this joint account, which Chan withdrew the funds from.
  6. During her interview, Chan admitted to acting as YHC’s mortgage agent and earning a broker fee of $3,000 for the second mortgage transaction. She also admitted the transaction was not processed through her brokerage. Chan admitted she withdrew all the YHC mortgage funds and transferred them to other accounts owned by Chan.
Transaction #4: The YTL First Mortgage
  1. In 2019, YTL wanted to buy an investment property but had difficulty obtaining financing from a bank.
  2. Chan told YTL that her mortgage company could act as a guarantor so that YTL could get additional financing. Chan offered to loan YTL $400,000 as collateral interest free for three months. Chan told YTL her company would withdraw the $400,000 loan if the bank approved a loan to YTL.
  3. YTL does not speak, read, or write English. Chan collected documents from YTL to complete the paperwork for the loan and took YTL to a lawyer’s office to sign them.
  4. At the lawyer’s office, a woman spoke to YTL in Cantonese and showed her a three-page document, directing her where to sign and initial.
  5. YTL states that she could not see what she was signing. She initialed at the edge of the document but could not inspect or read it because it was written in English. YTL did not receive a copy of the paperwork.
  6. Subsequently, Chan took YTL to the bank to open a joint account explaining that her company required the funds to be deposited into a joint account since it was not YTL’s money.
  7. YTL noticed a deposit of approximately $330,000 into the joint account and not the $400,000 she thought was going to be deposited.
  8. Instead of an interest free loan, Chan placed a $400,000 mortgage on YTL’s property without her knowledge or authorization. The proceeds of the mortgage were deposited into the joint account.
  9. The parcel register for YTL’s property shows a mortgage of $400,000 registered to a private lender on November 18, 2019.
  10. There were multiple withdrawals on the joint account that YTL did not make.
  11. During her interview, Chan admitted to acting as YTL’s mortgage agent and earning a broker fee of $2,000 for the YTL first mortgage transaction. She also admitted that the transaction was not processed through her brokerage and that she withdrew all the YTL mortgage funds.
Transaction #5: The YTL Second Mortgage
  1. On May 25, 2021, Chan took YTL to a new lawyer’s office. Without ever meeting with the lawyer, Chan presented YTL with a document to be signed. YTL understood Chan was making a second attempt to provide collateral funds of $400,000. Instead, Chan placed another mortgage on YTL’s property in the amount of $392,000, without her knowing.
  2. The parcel register for YTL’s property shows a mortgage of $392,000 registered to private lenders on May 20, 2021.
  3. On May 25, 2021, Chan advised YTL that her company would need to take the “loan” money back.
  4. The joint bank account shows the mortgage funds being withdrawn and transferred over several transactions. Chan confirmed she made all of the transfers to other accounts owned by her.
Various Other Mortgage Transactions
  1. Based on a FSRA investigation, there is further evidence that Chan directly received at least seven (7) other mortgage fees, totalling $15,000, outside her brokerage. Chan admitted that she took the fees directly to keep them for herself and avoid sharing them with her brokerage.

C. Criminal Charges and Other Court Proceedings

  1. On or about September 19, 2023, Chan was charged under the Criminal Code with multiple offences, in part related to the mortgage transactions outlined herein. These charges are pending before the Ontario Court of Justice.
  2. Chan is also involved in civil litigation relating to the KT, YHC, and YTL mortgage transactions.

III. CONTRAVENTIONS OR FAILURES TO COMPLY WITH THE ACT

A. Dealing Outside the Brokerage

  1. Section 2(3) of the Act provides that no individual shall deal in mortgages for remuneration unless they have a licence and are acting on behalf of a mortgage brokerage.
  2. The Director is satisfied that Chan contravened section 2(3) of the Act by dealing in mortgages outside her brokerage for KT, YHC, and YTL.

B. Receiving Remuneration Outside the Brokerage

  1. Section 4(1) of Ontario Regulation 187/08 prohibits a mortgage agent from receiving, directly or indirectly, any fee for dealing or trading in mortgages from a person or entity other than the brokerage on whose behalf he or she is authorized to deal or trade in mortgages.
  2. The Director is satisfied that Chan contravened section 4(1) of Ontario Regulation 187/08 by receiving remuneration, totalling approximately $31,300, for the KT Mortgage, YHC First Mortgage, YHC Second Mortgage, YTL First Mortgage, and the Various Other Mortgage Transactions outside her brokerage.

C. False or Deceptive Information or Documents

  1. Section 43(2) of the Act prohibits a person from giving false or deceptive information or documents when dealing in mortgages in Ontario.
  2. The Director is satisfied that Chan contravened section 43(2) of the Act by providing false information in relation to the KT Mortgage, YHC First Mortgage, YHC Second Mortgage, YTL First Mortgage, and YTL Second Mortgage transactions, and for providing deceptive documents in relation to the YHC First Mortgage transaction. For each of these mortgage transactions, Chan misrepresented to the borrowers what they were signing documentation for and the purpose of the joint accounts.

IV. GROUNDS FOR IMPOSING ADMINISTRATIVE PENALTIES

  1. The Director is satisfied that imposing administrative penalties on Chan under section 39 of the Act will satisfy one or both of the following purposes under section 38(1) of the Act:
    1. To promote compliance with the requirements established under the Act.
    2. To prevent a person or entity from deriving, directly or indirectly, any economic benefit as a result of contravening or failing to comply with a requirement established under the Act.
  2. The Director is satisfied that sixteen (16) administrative penalties totalling $83,600 should be imposed on Chan as follows:
    1. an administrative penalty of $4,000 for receiving remuneration from a person or entity other than her brokerage in respect of a cheque dated September 6, 2018 in the amount of $2,000, contrary to section 4(1) of Ontario Regulation 187/08.
    2. an administrative penalty of $2,000 for receiving remuneration from a person or entity other than her brokerage in respect of a cheque dated April 17, 2019 in the amount of $1,000, contrary to section 4(1) of Ontario Regulation 187/08.
    3. an administrative penalty of $2,000 for receiving remuneration from a person or entity other than her brokerage in respect of a cheque dated May 29, 2019 in the amount of $1,000, contrary to section 4(1) of Ontario Regulation 187/08.
    4. an administrative penalty of $8,000 for receiving remuneration from a person or entity other than her brokerage in respect of a cheque dated July 29, 2020 in the amount of $4,000, contrary to section 4(1) of Ontario Regulation 187/08.
    5. an administrative penalty of $6,000 for receiving remuneration from a person or entity other than her brokerage in respect of a cheque dated August 25, 2020 in the amount of $3,000, contrary to section 4(1) of Ontario Regulation 187/08.
    6. an administrative penalty of $4,000 for receiving remuneration from a person or entity other than her brokerage in respect of a cheque dated September 2, 2020 in the amount of $2,000, contrary to section 4(1) of Ontario Regulation 187/08.
    7. an administrative penalty of $4,000 for receiving remuneration from a person or entity other than her brokerage in respect of a cheque dated September 16, 2020 in the amount of $2,000, contrary to section 4(1) of Ontario Regulation 187/08.
    8. an administrative penalty of $10,000 for receiving remuneration from a person or entity other than her registered brokerage in respect of a cheque dated May 17, 2022 in the amount of $7,000 for the KT Mortgage transaction, contrary to section 4(1) of Ontario Regulation 187/08;
    9. an administrative penalty of $8,600 for receiving remuneration from a person or entity other than her registered brokerage in respect of a cheque dated July 4, 2018 in the amount of $4,300 for the YHC First Mortgage transaction, contrary to section 4(1) of Ontario Regulation 187/08;
    10. an administrative penalty of $6,000 for receiving remuneration from a person or entity other than her registered brokerage in respect of a cheque dated September 16, 2021 in the amount of $3,000 for the YHC Second Mortgage transaction, contrary to section 4(1) of Ontario Regulation 187/08;
    11. an administrative penalty of $4,000 for receiving remuneration from a person or entity other than her registered brokerage in respect of a cheque dated November 18, 2019 in the amount of $2,000 for the YTL First Mortgage transaction, contrary to section 4(1) of Ontario Regulation 187/08; and
    12. five (5) administrative penalties of $5,000 each, totalling $25,000, for giving false or deceptive information or documents when dealing in mortgages in Ontario for the KT Mortgage, YHC First Mortgage, YHC Second Mortgage, YTL First Mortgage, and YTL Second Mortgage transactions, contrary to section 43(2) of the Act.
  3. In determining the appropriate amount of administrative penalties, the Director has considered the following criteria as required by section 3 of Ontario Regulation 192/08:
    1. The degree to which the contravention or failure was intentional, reckless or negligent. The Director is satisfied that Chan’s actions were intentional as she admitted to taking fees outside the brokerage for all eleven (11) mortgage transactions. Chan further admitted she purposely did not process the transactions through her brokerage to avoid splitting her commission. Further, she preyed on vulnerable clients. Chan has shown a repeated and consistent pattern of conduct in continuing to circumvent regulatory requirements.
    2. The extent of the harm or potential harm to others resulting from the contravention or failure. The Director is satisfied that Chan created a risk or potential risk of harm to others by working outside the brokerage, the Act and Regulations. In doing so, Chan undermined the oversight function that brokerages are required to execute. Chan’s actions resulted in significant consumer harm leaving her clients subject to the repayment of large mortgages that they did not consent to, want, or know about.
    3. The extent to which the person or entity tried to mitigate any loss or take other remedial action. The Director is not aware of Chan taking steps to mitigate loss or remediate.
    4. The extent to which the person or entity derived or reasonably might have expected to derive, directly or indirectly, any economic benefit from the contravention or failure. As a result of Chan’s failure to comply with the Act, she received a total of approximately $31,300 in remuneration and accessed mortgage proceeds intended for KT, YHC, and YTL.
    5. Any other contraventions or failures to comply with a requirement established under the Act or with any other financial services legislation of Ontario or of any jurisdiction during the preceding five years by the person or entity. Chan is currently facing multiple charges under the Criminal Code and is a defendant in several civil lawsuits.
  4. The Director is satisfied, having regard to all the circumstances, that the proposed amount of the administrative penalties are not punitive in nature as required by section 3(2) of Ontario Regulation 192/08, and the amount is consistent with one or both purposes of section 38 of the Act.
  5. Such further and other reasons that may come to the attention of the Director.

DATED at Toronto, Ontario, May 14, 2024.

Original signed by

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

Si vous desirez recevoir cet avis en français, veuillez nous envoyer votre demande par courriel immediatement a : contactcentre@fsrao.ca.