Far more than five many years soon after dozens of Better Toronto Place investors identified out they’d shed the thousands and thousands they collectively invested in syndicated mortgages, their law firm has been disbarred by the Law Society of Ontario’s tribunal. 

Christopher Di Giacomo acted on behalf of 84 clientele who invested much more than $7.7 million on 16 genuine estate tasks with Black Bear Houses, a enterprise managed by a convicted fraudster. 

In a syndicated home finance loan a borrower — in this circumstance Black Bear Properties — finds much more than just one private financial institution to devote income in a development house in its place of likely to a lender. 

These individual syndicated mortgages had been really large-risk because the agreements offered no security for the clients’ investments, which were meant to go toward renovating or making homes in Crystal Seaside, Ont., a local community about 30 kilometres south of Niagara Falls on the shores of Lake Erie. 

Instead, the contracts permitted for the clients’ mortgages to be postponed at the rear of upcoming mortgages for design funding, and there have been no restrictions on Black Bear’s use of the funds. So when the developer defaulted on its financial loans, the new first mortgagees bought the attributes beneath energy of sale, leaving the syndicated mortgage loan traders with very little.

‘Deliberately dishonest’

In its scathing selections in December and March, the Law Society Tribunal Hearing Division identified Di Giacomo never ever spelled out any of all those challenges to his purchasers and “was deliberately dishonest with his customers and totally unsuccessful to defend their pursuits and investments.”

“The extent of the misconduct, which includes basic failures to connect with customers, conflicts of interest, and mishandling of have faith in money, spans the gamut of violations of a lawyer’s fundamental responsibilities and obligations,” wrote Frederika M. Rotter for the tribunal’s panel. 

Look at | 120 buyers dropped millions in home loans tied to convincted fraudster:

Lawyer disbarred a long time immediately after GTA clientele misplaced .7M in syndicated home loans

120 investors possible shed $9M in syndicated home loans tied to convicted fraudster

Additional than 120 folks from the Better Toronto Area’s Chinese local community have probable misplaced virtually $9 million in syndicated home loan investments solicited by someone they trustworthy and then loaned to a convicted fraudster, a CBC Information investigation has found. 2:32

Aspects of Di Giacomo’s misconduct contain failing to demonstrate the syndicated home loans were being for more than the order price tag of the qualities, postponing his clients’ home loans with no their know-how — in some conditions — irrespective of understanding Black Bear Houses experienced previously defaulted on its fascination payments to clients, and failing to disclose a conflict of fascination prior to postponing his clients’ mortgages on 4 jobs guiding mortgages from Di Giacomo’s own father.

By way of his law firm, Di Giacomo declined to comment for this story due to the fact he is now attractive the tribunal’s penalty decision to revoke his licence. 

Retirees shed much more than $150K

Margaret Wong, a retiree who invested and missing $200,000 throughout 4 Black Bear Properties initiatives, suggests she’s at last regained some faith in lawyers. 

“I just hope the law modern society will stand by their choice to revoke his license,” she reported. 

“So other lawyers will be designed aware that there will be penalties if they are willfully continuing with such ignorance and no obligation to their obligations.” 

Alexander Wong and Margaret Wong claimed they hope the legislation society will now rethink its decision to deny them cash from its payment fund for customers who have shed income mainly because of the dishonesty of a attorney or paralegal. (Nicole Brockbank/CBC)

Alexander Wong — a close friend of Margaret Wong’s from church — dropped $160,000 he invested throughout three jobs.

“This influenced our life,” he explained to CBC News. “I assume they produced the suitable choice … to make confident the regulation modern society will have self esteem from the community in the administration of justice.”

Equally of them reported they blame Di Giacomo in portion for their losses, and other investors’ losses, since he postponed their mortgages on title powering other folks without informing them. 

“By signing that we have entirely dropped management of the home,” explained Margaret Wong. “The worth of the home was 100 for each cent mortgage loan and Black Bear has by no means contributed a cent to the properties.”

CBC News very first documented on these syndicated home loans in a 2017 investigation, which disclosed how Wong and far more than 100 others from the Bigger Toronto Area’s Chinese neighborhood invested, and possible lost, $9 million in investments with Black Bear Properties.

The syndicated mortgages were being solicited by Dominic Ha, a then-registered home loan agent, whom numerous of the traders understood from church.

Convicted fraudster Gary Fraser, centre back, and then-registered mortgage loan agent Dominic Ha, 3rd from remaining, took buyers on a tour of qualities below development in Crystal Beach, Ont. (Submitted)

Ha received 10 per cent of the money for each and every syndicated property finance loan he solicited for “mortgage orientation, referral, management and consulting charges,” in accordance to the contracts. 

The legislation society’s panel uncovered that Ha was also one particular of the principals of Black Bear Houses, a genuine estate organization controlled by Gary Fraser, a convicted fraudster. 

Fraser was previously convicted of 28 counts of fraud above $5,000 in 2008 for defrauding 13 victims of extra than $2 million involving 2000 and 2007, in accordance to Niagara Police.

No legal fees

No legal costs have ever been laid in the Black Bear Properties case. York Regional Police seemed into the syndicated mortgages, but closed their investigation in October 2017.

Following the CBC Information investigation, Ha’s mortgage agent licence was revoked by the provincial regulator in 2018 and he and his organization the two declared bankruptcy. 

Di Giacomo also failed to disclose that Ha was in a conflict of fascination by advising his consumers on their investments, according to the tribunal selection. 

Ha did an job interview on Chinese tv in 2015 to encourage syndicated home loans. His home loan agent licence was revoked by the provincial regulator in 2018 and he and his company both equally declared bankruptcy. (WowTV)

He by no means advised his consumers Ha was a principal of Black Bear Homes and was acquiring a 10 per cent payment from each house loan investment. 

Di Giacomo submitted to the panel that he was not mindful of the fee Ha gained from each individual shopper. But the panel did not believe that him, pointing out that the payment is stated in the mortgage loan documents and Di Giacomo’s customer rely on ledgers show he advanced the cash for the rate in every venture to Ha’s business.

Di Giacomo promises ‘extreme incompetence’

Di Giacomo’s attorney and a attorney representing the Regulation Society of Ontario (LSO) presented a joint submission to the tribunal panel in which Di Giacomo admitted to misconduct, but stated his steps ended up the outcome of “intense incompetence.”

These submissions argued Di Giacomo did not realize his obligations to his clients, did not realize who he was acting for, and that he assumed his shopper was Black Bear Homes — not the syndicated home loan buyers.

As a end result, they proposed a penalty of a just one-calendar year licence suspension, alongside a permanent restriction banning Di Giacomo from do the job involving syndicated mortgages. Di Giacomo would also have to refund the customers roughly $120,000 he acquired from them in charges. 

The panel failed to acknowledge that Di Giacomo failed to know what he was accomplishing. Rather, they referred to him as a “seasoned experienced” who had practised regulation in the U.S. for 13 a long time devoid of incident and completed different transfers of money for the syndicated home loans, as outlined in the contracts, with no issue.

These syndicated home loan properties were marketed beneath electric power of sale by the new first mortgagees, leaving traders with practically nothing. (Nicole Brockbank/CBC)

“The circumstantial evidence leads to an inference, on the balance of chances, that the Law firm was not duped, but acted intentionally or wilfully or recklessly,” reads the selection.

“The law firm most popular the passions of Black Bear to the interests of his consumers. He also favored the interests of his father.”

In his discover of charm, Di Giacomo claimed the tribunal panel erred in legislation by refusing the joint submission penalty, by failing to accept his conduct as serious incompetence, and by drawing conclusions of dishonesty and/or wilful or reckless misconduct without the need of sufficient evidence.  

The panel did accept pieces of the joint submission. It requested Di Giacomo to refund the 84 customers for his solutions, and to spend $150,000 in expenses to the LSO. 

Now Margaret Wong and Alexander Wong are hoping the LSO will reconsider their selection to deny the traders compensation by way of the Regulation Society’s Payment Fund, which helps clients who have shed dollars due to the fact of the dishonesty of a law firm or paralegal.