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 Frank (Frankie) Attard.

NOTICE OF PROPOSAL TO REFUSE TO RENEW LICENCE AND
TO IMPOSE ADMINISTRATIVE PENALTIES

TO: Frank (Frankie) Attard

TAKE NOTICE THAT pursuant to sections 16 and 21 of the Act, 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”) is proposing to refuse to renew the mortgage agent licence of Frank (Frankie) Attard.

AND TAKE NOTICE THAT pursuant to section 39 of the Act, and by delegated authority from the Chief Executive Officer, the Director is proposing to impose five (5) administrative penalties in the total amount of $25,000 on Frank (Frankie) Attard:

Three (3) administrative penalties of $5,000 each in the total amount of $15,000 for giving false or deceptive information and documents when dealing in mortgages in Ontario, contrary to section 43(2) of the Act;
An administrative penalty of $5,000 for providing false or misleading information to the Chief Executive Officer, contrary to section 45(1) of the Act;
An administrative penalty of $5,000 for doing or omitting to do anything that might reasonably be expected to result in his brokerage failing to comply with a requirement under the Act, contrary to section 3 of Ontario Regulation 187/08.

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 21(2), 21(3), 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, 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. 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

These are reasons for the proposal by the Director to:
1. Refuse to renew the mortgage agent licence of Frank Attard, who also uses the name Frankie Attard (“Attard”); and
2. Impose five administrative penalties in the total amount of $25,000 on Attard.

II. BACKGROUND

A. FSRA Licensing History

Attard is currently licensed as a mortgage agent, level 2 (licence # M16001014), under the Act. He has been licensed since May 3, 2016.
Attard is currently sponsored by The Mortgage Alliance Company of Canada Inc. o/a Mortgage Alliance (“Mortgage Alliance”) (licence # 10530).
Attard is currently under a condition of supervision for two years, beginning in or around February 2023. He also paid an administrative penalty of $2,000 for failing to disclose being a defendant in a civil proceeding on his April 4, 2022 licence application.
On March 31, 2024, Attard applied to renew his mortgage agent licence which was set to expire on that same date.

B. The Complaint

On February 1, 2023, FSRA received a complaint from a consumer, VB, alleging, among other things, that Attard was negligent, altered documents, and misrepresented information with respect to VB and her husband’s mortgage transaction.
In July 2021, VB and her husband, ZB (collectively the “Complainants”), were looking to purchase a property. Attard was their mortgage agent.
The Complainants provided Attard with a completed mortgage application and supporting documents. Attard then provided the Complainants with a mortgage pre-approval letter for $800,000, purportedly from Bank #1. The pre-approval was false and never issued by Bank #1.
On December 4, 2021, several months after they believed they had been pre-approved for a mortgage, the Complainants were informed that their offer to purchase a property was accepted and provided the required deposit of $47,000. The transaction was scheduled to close on January 24, 2022.
Between January 6 and January 24, 2022, Attard provided Bank #1 with false information in relation to the Complainant’s mortgage application including false tax documents and bank statements with inflated incomes.
On or about January 12, 2022, Attard emailed a number of documents to VB for signature, including a mortgage commitment letter from Bank #1, a pre-filled mortgage application form, and related mortgage application consent and disclosure documents. VB provided Attard with the completed mortgage commitment letter and consent and disclosure documents that same day.
On January 24, 2022, the closing date of the transaction, Attard informed VB that Bank #1 had withdrawn the mortgage commitment due to her being untruthful about applying for financial support from the government.
In fact, Bank #1 withdrew the mortgage commitment because of discrepancies in the information submitted by Attard.
Without a mortgage commitment, the Complainants’ property purchase could not close. However, Attard assured VB that he could get them a mortgage from another bank.
Following this assurance from Attard, the Complainants sought an extension of the closing date, under the condition that they would forfeit their deposit of $47,000 if the transaction did not close on the new proposed closing date of February 14, 2022.
On or about February 5, 2022, Attard arranged for a mortgage application on behalf of the Complainants with Bank #2. He submitted the same false information to Bank #2 as he had earlier sent to Bank #1.
On February 11, 2022, the Complainants signed the mortgage related documents for Bank #2 and Bank #2 conditionally approved the mortgage application pending approval of their mortgage default insurer.
The mortgage default insurer refused to proceed with the mortgage application due to “inconsistencies in the file.” Bank #2 also declined the mortgage application because of inconsistencies found in the documents provided to them.
On February 14, 2022, the closing extension agreement expired. The Complainants were unable to purchase the property and lost their $47,000 deposit because they could not secure financing.

C. False or Deceptive Information or Documents to Others

Attard provided the following false or deceptive information and documents in relation to the Complainants’ mortgage transactions:

False or deceptive information or documents provided to the Complainants

Fabricated mortgage pre-approval letter from Bank #1.
Altered letter of direction authorizing a brokerage fee of $10,000 to be paid directly to 2279253 Ontario Inc., instead of Mortgage Alliance. Attard is the sole director of 2279253 Ontario Inc. The altered letter falsely stated the brokerage name as 2279253 Ontario Inc. and listed the brokerage address as Attard’s residential address.
False or misleading information to VB when Attard told her Bank #1 cancelled her mortgage commitment due to her untruthfulness regarding her applying for government assistance when, in fact, Bank #1 cancelled the mortgage commitment due to the false bank statements.
False or misleading assurances to VB after Bank #1’s alleged commitment was withdrawn that Attard would have a new mortgage commitment for her the next day, that everything was fine, and they would be able to close as scheduled.

False or deceptive information or documents provided to the Banks

Altered tax documents and bank statements of ZB with total income amounts inflated by approximately $180,000, purporting to show that ZB had more income than he actually did.
False information on the Mortgage Alliance mortgage application, including false account balances and income.
Altered corporation documents for the Complainants’ business showing a false date of incorporation purporting to show that the Complainants’ business had been established for years, instead of only a few months.
False bank statements for the Complainants’ business showing numerous large transactions and high account balances that were non-existent.

D. False or Deceptive Information to FSRA

As a result of the complaint, FSRA investigated Attard.
During the investigation, the Complainants confirmed to FSRA investigators that the financial information and documents they provided to Attard for their mortgage application was different from the information Attard provided to the banks.
FSRA investigators interviewed Attard on January 24, 2024.
During the interview, Attard provided false or deceptive information to FSRA by claiming he did not provide ZB’s documents to anyone other than Bank #1, that he had no connection to RBC, and that he was receiving documents from VB in person.
However, the same false tax documents and corporation records that Attard provided to Bank #1 matched documents received by Bank #2 as part of their mortgage application, and VB stated that she and her husband never met Attard in person.

E. Brokerage’s Failure to Maintain Records

Mortgage Alliance confirmed that Attard did not provide it with the Complainants’ supporting documentation for their mortgage application causing the brokerage to fail its requirement to maintain and retain required records.
Mortgage Alliance policies also required all deals to be uploaded to their system within 90 days of the previously scheduled closing date.

III. CONTRAVENTIONS OR FAILURES TO COMPLY WITH THE ACT

A. False or Deceptive Information or Documents to Others

Section 43(2) of the Act provides that no mortgage agent shall give, assist in giving or induce or counsel another person or entity to give or assist in giving any false or deceptive information or document when dealing in mortgages in Ontario or trading in mortgages in Ontario. Such conduct is prohibited whether or not the agent is aware that the information is false or deceptive.
The Director is satisfied that Attard contravened section 43(2) of the Act by providing false or deceptive information and documents on at least eight instances to the Complainants and two banks in relation to two mortgage applications. The false documents included a false pre-approval letter; an altered letter of direction, tax documents, bank statements, and corporation documents; false information on a mortgage application; and false or misleading information to the Complainants in respect of their mortgage applications.

B. False or Deceptive Information to FSRA

Section 45(1) of the Act provides that 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 the Act or the regulations.
The Director is satisfied that Attard contravened section 45(1) of the Act by making false and/or deceptive statements on at least three instances to FSRA investigators during his interview.

C. Breach of Duty to Brokerage

Section 3 of Ontario Regulation 187/08 under the Act prohibits a mortgage agent from doing or omitting to do anything that might reasonably be expected to result in the brokerage on whose behalf he is authorized to deal or trade in mortgages to contravene or fail to comply with a requirement under the Act.
The Director is satisfied that Attard contravened section 3 of Ontario Regulation 187/08 by failing to provide his brokerage with the Complainants’ supporting documentation for their mortgage application, which is a requirement of the brokerage under the Act.

IV. GROUNDS FOR REFUSAL TO RENEW LICENCE

Section 16(4) of the Act states that the Chief Executive Officer shall renew a licence unless the CEO believes, on reasonable grounds, that the applicant is not suitable to be licensed having regard to such circumstances as may be prescribed and such other matters as he considers appropriate.
Section 10 of Ontario Regulation 409/07 under the Act, in determining whether an individual is not suitable to be licensed as a mortgage broker or agent, the Chief Executive Officer is required by subsections 14(1) and 16(4) of the Act 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.
Given Attard’s actions with respect to the Complainants’ mortgage transaction, the Director believes that Attard is no longer suitable to be licensed as a mortgage agent under the Act, and that his licence renewal application should be refused, because his past conduct affords reasonable grounds for belief that he will not deal or trade in mortgages in accordance with the law and with integrity and honesty.
The Director also believes Attard is no longer suitable to be licensed as a mortgage agent due to his provision of false or deceptive or misleading information or documents to FSRA and to others, and causing his brokerage to fail to comply with a requirement under the Act.
Attard contravened section 43(2) of the Act by providing false or deceptive information or documents to others in relation to two mortgage applications for the Complainants by providing false or altered documents and false information on at least nine instances. Attard further contravened section 45(1) of the Act by providing false or misleading information to FSRA investigators on at least three instances during an interview in attempt to diminish his culpability and mislead the regulator.
Attard’s conduct also attempted to deceive lenders into providing a mortgage based on false information. He also deceived the Complainant by assuring them he would secure them financing. The Complainant’s relied on his assurances to their detriment and ended up forfeiting their $47,000 deposit as a result. Attard also attempted to receive his brokering fee for this transaction outside the brokerage in an effort to circumvent his own regulatory requirements, contrary to the public interest.

V. GROUNDS FOR IMPOSING ADMINISTRATIVE PENALTIES

The Director is satisfied that imposing administrative penalties on Attard under section 39 of the Act will satisfy 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.
The Director is satisfied that five administrative penalties in the total amount of $25,000 should be imposed on Frankie Attard as follows:
1. Three (3) administrative penalties of $5,000 each in the total amount of $15,000 for giving false or deceptive information and documents to the Complainants, Bank #1 and Bank #2, respectively, when dealing in mortgages in Ontario, contrary to section 43(2) of the Act;
2. An administrative penalty of $5,000 for providing false or misleading information to the Chief Executive Officer, contrary to section 45(1) of the Act;
3. An administrative penalty of $5,000 for doing or omitting to do anything that might reasonably be expected to result in his brokerage failing to comply with a requirement under the Act, contrary to section 3 of Ontario Regulation 187/08.
In determining the amount of the 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.
2. The extent of the harm or potential harm to others resulting from the contravention or failure.
3. The extent to which the person or entity tried to mitigate any loss or take other remedial action.
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.
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.
In respect of the first criterion, the Director is satisfied that Attard’s actions were intentional. By providing false/altered tax documents, bank statements, and corporation documents, Attard intentionally attempted to deceive two banks into providing a mortgage based on false information in support of the Complainants’ mortgage applications. Attard attempted to deceive these lenders into providing a mortgage to the Complainants that they otherwise would not qualify for and which would generate a fee that he intended to receive directly, outside of his brokerage. The Complainants relied on the false pre-approval letter purportedly from Bank #1 to their detriment.
Attard also purposely provided false information during his interview with FSRA investigators in an attempt to mislead them and hide his contraventions of the Act.
In respect of the second criterion, the Director believes that Attard created actual consumer harm as the Complainants relied on assurances from Attard that he would ultimately secure them financing. This assurance caused the Complainants to agree to purchase a property and to request an extended closing date, which they were not able to secure financing by, resulting in the loss of the home they wanted and forfeiture of their $47,000 deposit.
Also, Attard created a potential risk of harm to the banks by attempting to deceive them into providing a mortgage based on false information. This could have also harmed the Complainants as they would have been approved for a mortgage they could not afford, potentially causing them to default on mortgage payments and lose their home.
In respect of the third criterion, the Director is unaware of any efforts by Attard to mitigate any loss or take other remedial action.
In respect of the fourth criterion, Attard provided the Complainants with an altered letter of direction, that, had the mortgage transaction closed, would have resulted in him receiving remuneration for the transaction outside his brokerage, circumventing his regulatory requirements under the Act to deal in mortgages while acting on behalf of a licensed mortgage brokerage and receive his portion of the fee from Mortgage Alliance.
In respect of the fifth criterion, Attard is currently under a condition of supervision for two years, which was placed on his licence on February 16, 2023, and was issued an AMP in the amount of $2,000, for failing to disclose being a defendant in a civil proceeding on a previous licence application.
The Director is satisfied, having regard to all the circumstances, that the proposed amount of the administrative penalties is 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.
Such further and other reasons as may come to the attention of the Director.

DATED at Toronto, Ontario, October 1, 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.

NOTICE OF PROPOSAL TO REFUSE TO RENEW LICENCE AND TO IMPOSE ADMINISTRATIVE PENALTIES