For providing false or deceptive information when dealing in mortgages and also when dealing with representatives of the Financial Services Regulatory Authority of Ontario (FSRA), the regulator has imposed two administrative penalties totalling $20,000 on Meerwise Wais Habibzi. 

The regulator’s reasons for decision documentation outlines a “he said, she said” case wherein Habibzi is accused of taking funds that were intended for use to issue second mortgages on four properties.

Habibzi reportedly had a personal friendship and business relationship with a person, identified only as LT in the decision documents, since 2012. LT was in a lottery group pool with other employees at the hospital where she worked. The lottery group won approximately $12.5-million and each person listed on the membership list was paid approximately $1-million.

LT and Habibzi discussed LT providing a portion of her winnings to invest in second mortgages or in real estate. Habibzi offered her the opportunity to invest the funds with him to be used to issue second mortgages on four properties. He completed a document to that effect and LT transferred $450,000 to his account. In turn, Habibzi set up pre-authorized transfer agreements to two separate bank accounts, totalling $4,000 each month. Habibzi did not arrange for any of the second mortgages to be placed.

FSRA states that Habibzi was not a member of the lottery group. He, in turn, states that the agreement was never signed, that the copy in existence was a forgery but that his own copy had been destroyed in a flood. He also argued that the $450,000 transferred to him was pursuant to an agreement wherein LT would transfer 50 per cent of her lottery winnings to him if she were to ever win. He also claims that the $4,000 monthly payments were contributions towards an interest in two existing condominiums purchased under a separate agreement with LT.

“The tribunal has trouble ignoring the fact that the applicant had not put forward a clear and consistent explanation of how the alleged agreement with LT to share her lottery winnings with him came about,” FSRA’s reasons for decision document states. 

“We did not perceive the applicant to be a very credible witness. On the other hand, we are cognizant of the fact that there were discrepancies in LT’s testimony and sometimes she and her family members provided inconsistent evidence. She is also suing the applicant. For these reasons, we did not perceive LT to be a very credible witness either.” 

That said, the tribunal found that even if the agreement had not been validly signed, on a balance of probabilities, there is clear and convincing evidence that the pair conducted themselves as if they intended to carry out its terms – the amounts transferred to Habibzi were exactly the same as the amounts specified in the agreement, as were the monthly payments. “In summary, the behaviour of both LT and the applicant was consistent with the terms for the agreement.” 

The tribunal goes on to say it is satisfied that Habibzi was dealing in mortgages and did provide false or deceptive information when doing so, since he did not arrange for the mortgages to be placed on any of the properties.

Although the tribunal fell short of proving fraud they write that “the prohibition against giving false or deceptive information is not an administrative, technical or minor requirement.” 

The former agent’s license expired March 2020. He has not submitted an application to renew his license and is currently not licensed to do business in Ontario.