Charges Laid in Bankruptcy Fraud Investigation

TORONTO, Feb. 18, 2015 /CNW/ - The Integrated Bankruptcy Enforcement Unit, comprised of the Royal Canadian Mounted Police (RCMP) Greater Toronto Area Financial Crime Section and the Ontario Region Special Investigation Unit of the Office of the Superintendent of Bankruptcy (OSB SIU), charged Sevan Hermiz YOUHANNA, a 39 year old male from Toronto, with offences under the Criminal Code (CC) and Bankruptcy and Insolvency Act (BIA).  The allegations relate to fraud and the abuse of the bankruptcy process.

An investigation was launched in August 2012, after the RCMP/OSB SIU received information of possible wrongdoing by Mr. YOUHANNA, specifically his involvement in obtaining a loan by making fraudulent representations with respect to his income and major assets.  Investigation revealed instances of 'Bust-Out' fraud against institutional creditors and the use of counterfeit documents to secure loans. Mr. YOUHANNA had approximate assets of $5000 and liabilities of $197,500.

As a result of this investigation, Mr. YOUHANNA has been charged with the following offences:

  • Section 380(1)(a) Criminal Code (CC) – Fraud over $5,000;
  • Section 368(1) Criminal Code (CC) Uttering a forged document (3 counts);
  • Section 362(1)(b) Criminal Code (CC) Obtain credit by false pretence;
  • Section 198(1)(b) Bankruptcy and Insolvency Act (BIA) – Refuse or neglect to answer fully and truthfully all proper questions at an examination;
  • Section 198(1)(e) Bankruptcy and Insolvency Act (BIA) – Obtain credit or property by false representation;
  • Section 198(1)(g) Bankruptcy and Insolvency Act (BIA) Hypothecate, pawn, pledge or dispose of property obtained on credit (3 counts).

The matter is scheduled for first appearance at the Ontario Court of Justice – Old City Hall in Toronto on February 20, 2015

'Bust-Out' fraud is a scheme that involves an individual acquiring credit from financial institutions and businesses offering credit cards. The credit levels are maintained in such a way that provides the creditor with the level of comfort that would allow them to provide increased amounts of credit – sometimes by only paying minimum amounts as suggested on the credit statement. The available credit is exhausted by large cash advances and purchases before bogus payments are made to 'pay off' the debt in full.  The credit limit is restored by the creditor and the fraudster takes advantage of this opportunity to again exhaust the available credit before the payments are found to be bogus.  The end result is the fraudulent debtor has received up to twice the amount of the prescribed credit limit.  No further payments are made to the account and the debtor declares bankruptcy.

The RCMP and the OSB SIUs will continue to combine their efforts to investigate allegations of criminal wrongdoing related to bankruptcy and insolvency matters in order to protect the integrity of the insolvency system in Canada.

Website: RCMP in Ontario 
Twitter: @RCMPONT
Facebook: RCMP.Ontario

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SOURCE Royal Canadian Mounted Police

For further information: For media inquiries contact: Cst. Jean JUNEAU, RCMP Media Relations, "O" Division (Ontario), 613-937-7357

RELATED LINKS
http://www.rcmp-grc.gc.ca/

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