Vancouver condo developer fights U.S. extradition to face real estate ‘fraud-scheme’ allegations

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The allegations that Vancouver condo developer Mark John Chandler faces in the U.S. “leap over the line between property developer and fraudster,” a Canadian Department of Justice lawyer told B.C. Supreme Court on Thursday.

While Chandler’s lawyer argued the Americans who lost money in Chandler’s Los Angeles real estate project were incentivized investors and not victims, the lawyer representing the Attorney-General of Canada said Chandler obtained their money through deceit and used the funds not for its intended purpose, but for a “lavish” vacation home in Hawaii and spending at Mercedes-Benz and Holt Renfrew in Vancouver.

In the time since Chandler was arrested by U.S. authorities in 2013, the extradition process has unfolded against the backdrop of his dealings closer to home, including a troubled Langley condo development that was mired in a series of multimillion-dollar lawsuits last year before B.C.’s real estate watchdog issued an emergency order and public alert about the developer.

John Gibb-Carsley, a lawyer acting for Canada’s attorney-general on behalf of the U.S. government seeking Chandler’s extradition, summarized the case Thursday before B.C. Supreme Court Justice Jennifer Duncan. According to the record of the case for prosecution certified by an assistant U.S. attorney, an FBI special agent investigated Chandler’s alleged “investment fraud scheme,” in which the longtime Vancouver developer pitched a highrise condo tower on Hill Street in L.A., claiming the project would make a $33-million profit once complete and making “numerous misrepresentations to victim investors.”

Chandler’s lawyer has argued, Gibb-Carsley said, “that this case is about a property developer doing what property developers do. Which is convince investors to put money into something, and turn an empty space — in this case, a parking lot — into something of value — a condominium tower. However, there is a line between real estate developer and someone who commits fraud. And the line is set out by Section 380 of the Criminal Code (defining fraud).

“However, the allegations that I say leap over the line between property developer and fraudster” include Chandler allegedly using fake cheques and forged loan documents, and taking money intended for a real estate project and using it for other purposes, Gibb-Carsley said.

The FBI investigator alleged Chandler falsely told investors he’d been awarded a $30-million settlement, court heard. But court records showed he had not been awarded a settlement, but instead actually had a $35-million lawsuit filed against him in B.C. and another suit for $742,000 for defaulting on loan payments for a yacht.

Chandler’s lawyer, Michael Bolton, raised questions about the reliability of the record of the case for the prosecution filed by U.S. authorities in support of the extradition request. Bolton also argued no false representations were made by Chandler to obtain money from the investors, and said they were not victims, but incentivized investors who took risks in an attempt to make money.

The U.S. record of the case was “unreliable to an extreme degree” in painting investors as victims of fraud, Bolton told the court. “They were obviously victims of the economy and their own choices.”

Gibb-Carsley summarized the circumstances by which Chandler allegedly obtained investors’ funds, according to the U.S. authorities’ investigation, including one woman who allegedly lost $87,000 and the home in which she lived. In addition to pledging her home as collateral, Chandler requested the woman “give him a cash investment to assist with obtaining permits for the Hill Street property,” according to the record of the case.

The investor agreed, according to the record, and Chandler escorted her to banks in Long Beach and Los Alamitos, where she made a series of withdrawals and gave him $34,000 in cash.

About two weeks later, Chandler went to the woman’s home “upset,” and told her “he needed more money for the engineers,” according to the record. She “retrieved $40,000 in cash that was an inheritance from her mother that was stored at her home,” gave it to Chandler and asked for a receipt, which he said he would give her “later,” the record says.

The case was adjourned until next month for further arguments.

Read the original story over at the Vancouver Sun.

This story was summarized by Canadian Fraud News Inc.