B.C. Cracks Down on ‘Shadow’ Mortgage Broker Scheme as 25 Real Estate Agents Face Sanctions

British Columbia’s real estate industry is facing one of its biggest scandals in recent history, as 25 real estate agents and mortgage brokers are now facing sanctions for their involvement with unregistered mortgage broker Jay Kanth Chaudhary.

The B.C. Financial Services Authority (BCFSA) has already revoked three real estate licences and issued fines totaling tens of thousands of dollars. Shane Ballard, a former mortgage broker who admitted to submitting 165 fraudulent mortgage applications, has been permanently banned from the industry and fined $50,000.

Chaudhary, a former mortgage broker who lost his registration in 2008 for submitting altered documents, allegedly helped 900 unqualified homebuyers secure mortgages using fake financial records—totalling over $500 million in financing.

How the Scheme Worked

Chaudhary operated as a “shadow” mortgage broker, using licensed professionals to front his operations after losing his registration. According to testimony at the Cullen Commission on Money Laundering, he worked with at least:

• Four registered mortgage brokers who submitted fraudulent applications on his behalf.

• 20 real estate agents who referred clients to him.

He charged homebuyers thousands of dollars to fabricate bank and tax documents, allowing them to secure loans they otherwise wouldn’t qualify for.

Among those sanctioned:

• Molenia Golshani, who used Chaudhary’s fake financial records to secure her own mortgage despite reporting a negative annual income of -$459.

• Sayna Sadat Mirzadeh, who obtained a mortgage in 2017 using fraudulent tax documents created by Chaudhary and submitted by his wife, Mana Erfani—who was banned from mortgage brokering in 2020.

• Homayoun (Sam) Haji Karimloo, who referred clients to Chaudhary and used his services for personal property purchases.

The ‘Remarkably Forthright’ Testimony

Chaudhary, who has not faced criminal charges, was surprisingly candid when he testified at the Cullen Commission, which investigated money laundering in B.C.

“There always will be a need for individuals like us and what we did,” he told the inquiry. “People want a house but don’t fit the traditional guidelines.”

He claimed that none of his clients ever defaulted, and the banks “weren’t hurt”—an assertion regulators strongly dispute.

Regulators and Law Enforcement Response

BCFSA has been investigating Chaudhary since 2019, eventually ordering him to stop acting as a submortgage broker.

Despite the scale of the scheme, the RCMP declined to investigate, stating the case did not fall within their mandate.

However, BCFSA director of investigations Raheel Humayun warned that the reputation of B.C.’s real estate industry has been severely damaged, and such fraudulent practices could put lenders and consumers at risk.

Ongoing Investigations

The BCFSA has publicly linked Chaudhary to 19 completed cases and is still investigating four more files. More fines, licence revocations, and legal actions are expected in the coming months.

Authorities say that while Chaudhary’s case is particularly high-profile, the demand for fraudulent mortgage approvals remains a persistent problem in B.C.’s booming real estate market.