cbc.ca (© Copyright: (C) Canadian Broadcasting Corporation, http://www.cbc.ca/aboutcbc/discover/termsofuse.html#Rss)
Updated: Fri, 10 Jan 2014 17:52:13 GMT | By CBC News, cbc.ca

Mac Harb probe sees new details released by RCMP



Mac Harb resigned from the Senate in August after he repaid a total of $231,000 for ineligible expense claims. The RCMP is now looking into Harb's spending. Sean Kilpatrick/Canadian Press

Mac Harb resigned from the Senate in August after he repaid a total of $231,000 for ineligible expense claims. The RCMP is now looking into Harb's spending. Sean Kilpatrick/Canadian Press

New documents released yesterday in an Ottawa court lay out the details of fraud allegations against former Liberal senator Mac Harb.

The RCMP allege Harb committed mortgage fraud in relation to two properties outside Ottawa.

The allegations haven't been tested in court and are part of an ongoing investigation.

The RCMP say that without telling his mortgage provider, the Royal Bank of Canada, Harb transferred 99.99 per cent of a property to a diplomat from Brunei.

The RCMP say that put the bank at risk had there been a default on the property.

The new records expand on allegations previously reported by CBC News regarding two of Harb's Ottawa properties.

Harb declined to comment on the allegations.

Harb "did by deceit, falsehood or other fraudulent means defraud the Royal Bank of Canada of money in excess of $5,000," Cpl. Greg Horton wrote in an affidavit filed in court Dec. 10. 

'Fraudulent misrepresentation'

Harb provided "false information to the Royal Bank of Canada" in support of a mortgage application on a second property, Horton alleges.

The details come out of a document known as an Information to Obtain, a production order, or ITO, which lays out the basis for the allegations and requests a court order to produce evidence held by somebody other than the person subject to the investigation.

The ITO shows the RCMP are seeking all mortgage documents relating to Harb between Oct. 1, 2007, and Oct. 31, 2013, including mortgage applications, supporting documents, correspondence and instructions to lawyers regarding the mortgages.

The ITO is generally only made public once the investigator confirms in writing that the information has been provided. The RCMP filed a return on the production order yesterday, allowing the information to be made public upon request.

This is not directly related to the Senate expenses scandal and doesn't involve taxpayer money directly, but was uncovered in the course of the investigation into his inappropriate housing expense claims.

Those expense claims were subsequently repaid to the Senate.

Harb was one of four senators referred for a forensic investigation into their housing expense claims. Harb told the Senate that the Cobden and Westmeath homes, about an hour's drive outside the capital, were his primary residence. He claimed housing expenses for a home in Ottawa.

The RCMP previously alleged his primary residence was the home in Ottawa.

Diplomat now in China

The RCMP say Harb sold the vast majority of the property he owned in Cobden, Ont., in 2007, four years after he bought it.

The police allege Harb took out a mortgage for $177,000 on that property hours before he transferred 99.99 per cent the title ownership to the diplomat, Magdalene Teo.

Horton calculated the remaining 0.01 per cent value of the home to be worth about $58.

It's not clear what he paid for the home, although he was issued a building permit for $125,000 in upgrades and had multiple tradespeople working on it, according to earlier court documents. The RCMP say he sold it to Teo for $567,000. It was sold to a third party in 2011 for $505,000.

In 2010, Harb bought a house in Westmeath, Ont., and took out a mortgage from RBC for $240,000.

"When applying for the mortgage, he listed the property in Cobden as a solely owned asset, when in fact he held only .01 per cent interest of the Cobden property. This was a fraudulent misrepresentation of assets on that mortgage application," Horton said in the court documents.

Teo represented Brunei in Canada and is now her country's ambassador to China.

She has declined to speak to the RCMP and requests questions in writing, Horton says.

"The relationship between Ms. Teo and Senator Harb has not been determined by investigators on my team, nor is it clear why Senator Harb maintained a .01 per cent interest in the property after selling it to Teo, or why she refuses to speak to investigators."

Horton says Harb is also refusing to speak to investigators.

Mobile users, read the ITO document here (pdf)

more video