$2 million fraud scheme targeted Pakistani-Canadians

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On Jan. 11 2022, the Ontario Securities Commission (OSC) announced that Mujahid Ali Syed and Sanjiv Katyal have each been charged with securities fraud and trading without registration.

Syed faces a count of distributing securities without a prospectus, and Katyal was charged with fraud and trading without registration, as well as advising in securities without registration.

The OSC investigation involved collaborative assistance with Peel Regional Police’s fraud bureau. The investigation disclosed that Syed allegedly accepted about $2 million from mostly Pakistani-Canadian investors whom were offered a pretense that the funds would be invested.

Katyal, a registrant and CIBC bank manager at the time, is alleged to have referred potential investors to Syed after selecting them from the lineup at a Mississauga bank branch he managed. The OSC alleges that Katyal selected potential investors based on their shared background and ethnicity.

This is regarded as a form of affinity fraud.

The scheme begun by encouraging investors to borrow money against their homes, and in the names of family members, in order to raise more funds.

One elderly investor is believed to have paid more than $1 million to the accused.

Investor funds were allegedly directed into Syed’s company, Global Marketing Inc. Syed likely used this money for personal use for him and his family. Funds were withdrawn in cash, or paid to Katyal for referring investors.

J eff Kehoe, OSC director of enforcement, staid “as alleged, Mr. Syed and Mr. Katyal preyed on the trust of vulnerable members of their community to raise funds for their fraudulent scheme by exploiting their shared cultural heritage and role as gatekeepers of the investment industry.”

“The OSC will continue to pursue individuals who commit affinity frauds, as well as those who abuse the trust placed in them as registrants and are responsible for stopping this type of conduct.”

None of the allegations have been proven in court. The pair are scheduled to appear in a Brampton court on Feb. 7.

Advice from OSC about avoiding affinity fraud is available online at getsmarteraboutmoney.ca.

This article was originally sourced by www.insauga.com.