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RCMP uncovers complex fraud scheme leading to charges for Toronto family

Newmarket, Ontario – A Royal Canadian Mounted Police (RCMP) investigation has led to fraud charges related to over $1 Million in fraudulent funds obtained through the Canada Small Business Financing Program (CSBF). The purpose of the CSBF loan program is to assist small and medium Canadian businesses with financial resources (the program is unrelated to any of the COVID-19 government programs).

In December 2017, the RCMP began investigating suspicious loan applications granted through the CSBF after a referral from Innovation, Science and Economic Development Canada. A number of these loans were granted to members of one family, with the applications containing fraudulent documents designed to increase the likelihood of approval.

The scheme involved a complex network of fake and legitimate companies whereby the proceeds of crime were either transferred through or co-mingled with legitimate funds to obscure the trail. Some of the companies and bank accounts were set up exclusively for the purpose of moving the proceeds of crime.

Once the loans were approved and the funds deposited into the account of the applicant company, they were immediately transferred out. The applicant company eventually defaulted on the loans leaving the federal government and the financial institution liable for the loss.

Instead of being used for their intended purposes, the funds were traced through a complex series of fake companies or legitimate corporations for personal gain.

On April 19, 2022, Kageepan Nadarajah, Sinnathamby Nadarajah and Karunadevi Nadarajah were charged with:

Fraud over $5,000, contrary to Section 380(1)(a) of the Criminal Code

Possession of property obtained by crime, contrary to Section 354(1) of the Criminal Code

Money laundering, contrary to Section 462.31 of the Criminal Code

Providing false documents, contrary to Section 16 (1)(a) of the Canada Small Business Financing Act

Kageepan Nadarajah was charged with an additional count for Fraud over $5,000, contrary to Section 380(1) of the Criminal Code.

The RCMP would like to thank Innovation, Science and Economic Development Canada and FINTRAC for their support during the investigation.

The forensic accounting services were provided by the Forensic Accounting Management Group (FAMG) of Public Services and Procurement Canada.

Law enforcement agencies work diligently to make our communities safer places to live but your assistance in remaining vigilant and informing us of any suspicious activities will help us be even more effective. If you have any information about a fraud or wish to report other criminality, you can contact your local police, the Ontario RCMP at 1-800-387-0020, or report anonymously through Crime Stoppers at 1-800-222-8477 (TIPS), at any time.

This article was originally sourced by www.canadapolicereport.ca.