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Kevin Sheldon Frederick of Edmonton is only 25 years old and he’s figured out the secret to wealth – or at least he thought he had it figured out. He’ll have plenty of time to mull over his plan because he’s just been sentenced to 30 months behind bars for defrauding lenders out of more than $2 million in mortgage funds.
Frederick and a partner received the money for mortgaging 24 different properties. Twenty-two of the properties were insured by Canada Mortgage and Housing Corporation (CMHC) and 17 of them are now in foreclosure. The scheme involved approaching young people and offering them $500 to $3,000 to affix their signatures to mortgage application documents. Then, with the help of a particular appraiser, valuations were submitted that were significantly higher than the properties were actually worth.
The properties were then traded to a businessman or transferred to a numbered company. The full amount of the loss has not yet been set, but CMHC has quantified the losses on ten of the properties at $637,000. Another $96,000 was lost on a single property by CIBC Mortgage Corporation.
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