IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c.29, as amended (the “Act”), in particular sections 16, 21, 38 and 39;

AND IN THE MATTER OF Rohan (Ron) De Silva and Real Mortgage Associates Inc.

MINUTES OF SETTLEMENT AND UNDERTAKING

PART I – INTRODUCTION

Rohan (Ron) De Silva (“De Silva”) is licensed as a mortgage broker under the Act (licence # M08011187). De Silva is the Principal Broker of Real Mortgage Associates Inc. (“RMA”) a brokerage licensed under the Act (licence # 10464).
On May 30, 2024, the Director, Litigation and Enforcement (the “Director”), by delegated authority from the Chief Executive Officer (“CEO”) of the Financial Services Regulatory Authority of Ontario (“FSRA”), issued a Notice of Proposal in respect of De Silva, RMA and others (the “NOP”).
De Silva and RMA disputed the allegations and, on or about June 13, 2024, requested hearings before the Financial Services Tribunal (the “Tribunal”) in respect of the NOP.
De Silva, RMA and the Director, by delegated authority from the CEO, (collectively the “Parties”) wish to resolve this matter on consent and without a hearing before the Tribunal.

PART II – AGREED FACTS

Masoud Asnafi (“Asnafi”) is a mortgage broker at RMA. Asnafi submitted 19 mortgage applications to a lender (the “Lender”) that contained false or misleading information. Eighteen of the mortgage applications were ultimately funded by the Lender, with almost $12 million advanced.
The false or misleading information submitted by Asnafi included false or altered bank statements, fabricated Master Business Licences, and altered or fabricated income tax documents.
When submitting the applications through RMA, Asnafi was required to submit the brokerage’s “Mortgage Fraud Checklist” which was a document unique to RMA (the “Checklist”). The Checklist requires the agent or broker to identify the steps they took to prevent fraud, like verifying identity, employer phone number and borrower address. The Checklists were only partially completed by Asnafi for the 19 mortgage applications.
Besides the Checklists, RMA and De Silva did not take steps to verify that the documents submitted with the 19 mortgage applications were authentic to ensure Asnafi did not submit false or misleading documentation to lenders.
Asnafi used a personal email to communicate with borrowers, including receiving from borrowers documents and written information. FSRA requires all brokerages to have access to material correspondence of brokers and agents used in communicating with clients and RMA and De Silva did do not have direct access to the personal email account used by Asnafi.M
During its investigation, FSRA sought email records related to 23 borrowers. Asnafi was only able to provide communications related to 9 of the 23.
RMA had no separate record of email communications between Asnafi and the borrowers and, as a result, could not produce them requested by FSRA.
RMA is currently working to update its file management process, fraud checklist, and policies and procedures manual. The implementation for these updates is scheduled for on or around October 30, 2024.

PART III – NON-COMPLIANCE WITH THE ACT

By engaging in the conduct described above in Part II, RMA admits and acknowledges that it breached the Act by not maintaining complete and accurate records of all documents or written information obtained from a borrower as required by section 46 of Ontario Regulation 188/08.
By engaging in the conduct described above in Part II, De Silva admits and acknowledges that he contravened section 2 of Ontario Regulation 410/07 by not taking reasonable steps to ensure the brokerage and each broker or agent complies with requirements established under the Act in two instances.
In particular, De Silva did not ensure RMA complied with the requirement to maintain complete and accurate records, and he did not take reasonable steps to ensure that Asnafi complied with the requirement not to submit false or deceptive information in support of mortgage applications.

PART IV – TERMS OF SETTLEMENT

RMA and De Silva admit the facts contained in Part II of these Minutes.
RMA and De Silva acknowledge and agree that they have been given the opportunity to seek independent legal advice and have done so (or have waived the right to do so) and are entering into these Minutes of Settlement and Undertaking (“Minutes”) voluntarily, understanding the consequences of doing so.
RMA and De Silva acknowledge that these Minutes are an undertaking within the meaning of the Act, and that failure to comply may result in immediate regulatory action including, but not limited to, the issuance of a Notice of Proposal to revoke the licence, a Notice of Proposal to impose an administrative penalty, or a prosecution under the Provincial Offences Act.

(a) Issuance of Order

RMA and De Silva acknowledge that, upon execution of these Minutes by both Parties, the order attached as Schedule “A” to these Minutes (the “Order”) will be issued, pursuant to which:
1. De Silva will pay two administrative penalties of $7,500 each, totalling $15,000; and
2. RMA will pay an administrative penalty of $15,000.

(b) Process for Execution of Settlement

RMA and De Silva acknowledge that these Minutes are not binding on the Director until signed by the Director.
These Minutes may be executed in counterparts, and may be executed and delivered by facsimile or e-mail, and all such counterparts and facsimiles or e-mails, as applicable, shall together constitute one and the same agreement.
Upon receiving an executed copy of these Minutes from FSRA, RMA and De Silva will withdraw their Requests for Hearing (Form 1) in respect of the NOP before the Tribunal by completing a Withdrawal/Discontinuance (Form 5) and filing it with the Registrar at the Tribunal within two (2) business days.
Upon confirmation from the Tribunal that the Requests for Hearing have been withdrawn and the hearings have been cancelled, the Parties agree that the Director will issue an Order in the form attached as Schedule “A” to these Minutes.
The Parties accept and understand that these Minutes and any rights within the Minutes shall enure to the Parties and to any successors or assigns of the Parties.

(c) Disclosure of Minutes and Order

The Parties will keep the terms of these Minutes and the Order confidential until the Order is issued, except that:
1. The Director shall be permitted to disclose the Minutes and the Order within FSRA; and
2. The Parties shall be permitted to inform the Financial Services Tribunal.
If one of the Parties do not sign these Minutes or the Director does not issue the Order:
1. These Minutes, the Order, and all related discussions and negotiations will be without prejudice to FSRA, RMA and De Silva; and
2. FSRA, RMA and De Silva will each be entitled to all available proceedings, remedies and challenges, including proceeding to a hearing of the allegations contained in the NOP. Any proceedings, remedies and challenges will not be affected by these Minutes, the Order, or any related discussions or negotiations.
Upon issuance of the Order:
1. RMA and De Silva agree that these Minutes and the Order form part of their administrative record for the purposes of any future licensing decision or as an aggravating factor in respect of a future administrative penalty or prosecution against them or any affiliated entities;
2. RMA and De Silva acknowledge that these Minutes and the Order are public and will be published by FSRA on its public website (or that of its successor) along with a press release that summarizes these Minutes and the Order; and
3. The Parties agree not to make representations to any member of the public or media or in a public forum that are inconsistent with these Minutes or the Order.

(d) Further Proceedings

Whether or not the Order is issued, RMA and De Silva will not use, in any proceeding, these Minutes or the negotiation or process of approval of these Minutes as the basis for any attack on FSRA’s jurisdiction, alleged bias, alleged unfairness, or any other remedies or challenges that may be available.
Upon issuance of the Order:
1. RMA and De Silva waive all rights to a hearing before the Tribunal regarding the NOP;
2. RMA and De Silva waive all rights to a judicial review or appeal of the Order;
3. The Director agrees that FSRA will not take any further proceedings against RMA and De Silva arising solely from the facts contained in Part II of these Minutes, unless facts not disclosed by RMA or De Silva come to the attention of FSRA that are materially different from those contained in Part II of these Minutes or if RMA or De Silva fail to comply with any term in the Order; and
4. RMA and De Silva agree that should they fail to comply with any term in these Minutes or the Order, FSRA is entitled to bring any proceedings available to it.

DATED at , Ontario, September 13, 2024.

Original signed by

Ron De Silva
Real Mortgage Associates Inc.

DATED at , Ontario, September 13, 2024.

Original signed by

James Bell
Name of Witness

DATED at Toronto, Ontario, September 18, 2024.

Original signed by

Elissa Sinha
Director, Litigation and Enforcement
Financial Services Regulatory Authority of Ontario

By delegated authority from the Chief Executive Officer

APPENDIX A

IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c.29, as amended (the “Act”), in particular sections 16, 21, 38 and 39

AND IN THE MATTER OF Rohan (Ron) De Silva and Real Mortgage Associates Inc.

ORDER TO IMPOSE ADMINISTRATIVE PENALTIES

Rohan De Silva (“De Silva”) is licensed as a mortgage broker (licence # M12001788) under the Act. De Silva is the principal broker of Real Mortgage Associates Inc. (“RMA”), a mortgage brokerage licensed in Ontario (licence # 10464).

On May 30, 2024, by delegated authority from the Chief Executive Officer of the Financial Services Regulatory Authority of Ontario (the “Chief Executive Officer”), the Director, Litigation and Enforcement (the “Director”) issued a Notice of Proposal to impose administrative penalties on RMA, De Silva and others, including:

An administrative penalty on RMA for not maintaining complete and accurate records of all documents or written information obtained from a borrower, contrary to section 46 of Ontario Regulation 188/08.
Two administrative penalties on De Silva for not taking steps to ensure that the brokerage and each broker or agent complies with the Act, in contravention of section 2 of Ontario Regulation 410/07.

Requests for Hearings (Form 1s), dated June 13, 2024, and June 18, 2024, were delivered to the Financial Services Tribunal (the “Tribunal”) in accordance with section 39(5) of the Act respecting the Notice of Proposal.

On [date], RMA and De Silva withdrew their Requests for Hearing, and, on [date], the Tribunal closed its file in respect of this matter. Therefore, pursuant to section 39(7) of the Act, the Director makes the following order.

ORDER

Two administrative penalties in the total amount of $15,000 are hereby imposed on Rohan De Silva (“De Silva”), for the reasons set out in the Minutes of Settlement.

DATED at Toronto, Ontario,

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

ORDER

An administrative penalty in the amount of $17,500 is hereby imposed on Real Mortgage Associates Inc. (“RMA”), for the reasons set out in the Minutes of Settlement.

DATED at Toronto, Ontario,

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

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