Fraudsters hijacked GTA man's company record, tried to mortgage its $12M property for cash

Hitender Sharma was driving from Toronto to Windsor last month when he got a phone call from a private investigator that made him turn his car around.

The investigator told Sharma his holding company had been hijacked by fraudsters looking to gain access to the mortgage-free commercial property Sharma's company owns in Mississauga. Their aim? To cash in on millions of dollars in equity by financing or selling the land.

"It was shocking," said Sharma. "We have all the investment here, [the property] is worth more than maybe $12 million and this will disappear."

The next day, Sharma pulled a copy of the Ontario corporation record for his holding company, which confirmed that someone had changed the director and address of the business in November.

It turns out, his company wasn't the only target. 

According to Brian King, the private investigator who called Sharma, his lot was one of five Greater Toronto Area (GTA) commercial properties pitched to a private lender for financing, or purchase, by a group that took over companies that own the properties late last year.

In one of those cases, which King's firm is working on, he says the group succeeded in selling a Caledon property to the unsuspecting lender for nearly $5 million without the rightful owner's knowledge. For Sharma's property, the group wanted a $5-million mortgage, but didn't get it.

"I suspect there are many more," said King, president and CEO of King International Advisory Group, which specializes in white collar crime. "We're poring through certain records that we now have access to, and I do suspect we're going to find more [properties]."

Title records show Sharma's property remains mortgage-free and hasn't been sold — but he's still working to regain control of his holding company.

CBC Toronto has reported extensively on similar frauds targeting residential properties. In those cases, fraudsters impersonated the homeowners to obtain mortgages or sell houses out from under them.

Although the goal of leveraging equity from a property is the same in this scheme, the steps involved raise new questions and concerns about the security of the Ontario Business Registry.

"With security features in place, someone shouldn't be able to go in and change someone's corporate records," said King. "In my mind, it's a bit of a flaw in our government system right now that needs to be fixed."

Nearly four years ago, the provincial government introduced a new digital Ontario Business Registry to make "life easier" by allowing business owners to make changes and submit filings for their company online, 24/7. 

The system also created a new security feature called a "company key." Each key is a unique sequence of digits and characters assigned to a business and used like a PIN to submit filings and change their corporate record. Since October 2021, new companies have been automatically issued a key after incorporating, but older businesses have to request a key, which is then mailed to their registered office address or email address.