We apologize about any pain or unhappiness you may feel from raising unpleasant memories of your experience with Allied Canadian investments and in some cases; losses due to undisclosed ‘Tied Loans’.
If you feel like us, it helps knowing how this ‘Predatory Lending’ scheme works. And we take comfort from you adding weight to our complaint file submissions for OSC and RCMP investigations. Including our own, we have several documented cases that demonstrates a scheme reported to the Institute of Chartered Accountants and the Upper Canada Law Society. The analysis supports a range of allegations that may develop into class actions, including:
Non-arms length deal in property re-acquisition to compliment an Allied Canadian REIT
Misrepresentations regarding Investment Property financial declarations and accounting
Systematic Predatory Lending Scheme potentially involving undisclosed ‘Tied Loans’
We hope you enjoy the book ~ ‘The Perfect Sting’, which today, provides a backdrop in two litigation cases and ICAO charges against an Oakville accountant. And in the case of my counterclaim to the Bank of Montreal’s litigation … alleged fraud and collusion in the apparent manufacture of debt creating documents.
In case there are any doubts about the nature of disposition and final disbursements following the vote to sell your investment property … you should perhaps be aware of the pre-sale advice provided by Ms. D. Gunn, past President, Allied Canadian Equities Corporation.
Quote: “… As a former lawyer, he is a very cunning adversary who does not react well to
confrontation (especially from limited partners) … As usual, I think that investors want to make sure that Allied’s not in a position of conflict with the owners of the property. To that end, an independent (full) appraisal should be provided by one or more independent real estate valuation firms to ensure that the listing price represents fair market value. In light of the information you obtained concerning Allied’s involvement in the organization of a REIT – investors will want to be sure that the selling price is fair and that the short window of financing is not going to force them to sell at a fireside price …” (December 18, 2002)
But that is exactly what happened. Apparently the same formula for the sale of an Allied investment property on Yonge and St. Clair. And despite Allied assurances such would never happen again, the Front Street property sold was added to an Allied REIT portfolio immediately … the day after the registration of the sale … complete with fully documented prospectus materials!
And, in case there is any doubt about behind the scenes Bank lending practices that aside from apparently overlooking credit alerts and approving loans regardless of repayment capabilities, also condones unusual documentation from Allied Canadian’s ‘Off-site Loans Closings’ materials. You should be aware that the Bank of Montreal failed to confirm loans with clients, and their Head Office chose to ignore numerous investor’s ‘Collateral Deficiency Notifications’ in a letter written by Mr. T. Bainbridge, Community Banking Manager. (Circa December 1, 1989 – Allied 89-2 Offering Closing Date)
Quote: “Re: Allied Canadian (89-2) Ltd. Partnership. It has come to my attention that there may be some concern over various colours and/or print of the body and/or figures of the Allied Canadian Ltd. Partnership demand notes.
As you are aware, we obtained approval from Credit Department allowing ‘Off-site Closings’ for this package (enclosed). The units from this offering were sold between the period of September to November 30, 1989 with a closing date tentatively scheduled for December 1, 1989 (this closing date was tentative only), and if financing was required by the investor, the documentation was signed and submitted to the Bank of Montreal in accordance with the credit authorization of September 13, 1989. Since the closing date was not firm at the ‘Point of Sale’ and the prime rate not known, the date and prime rate was not completed on the demand note. It was agreed that this information would be completed when the closing date was established, all of which would be confirmed with the client (i.e. borrower/investor).
On the basis of my discussion with Operations/Audit, I am of the opinion that there is no risk associated with our documentation and as such will not pressure the promoter (Allied) or client (borrower) to sign new documents.
Based on the foregoing it is not necessary to report these as collateral deficiencies …”
Decisions like these play into: ‘Bank Loan Game Rules for Sitting Ducks’. They did not want the possibility of debtors becoming aware of the game in a second pass for signatures. Not that there was any time for new documents or confirming any details with clients as this internal letter was dated December 1, 1989 in the final hour of the final day of the Allied Canadian (89-2) offering … And in my case … only two days after the Oshawa branch loans officer who I have never met … signed as witness to my signature to ensure my passage into unsustainable debt.
Then there is the OSC. Quote: “OSC Records Department staff were unable to locate any public records in Commission files for either of these two partnerships - ACLP(89-2) and ACLP(90-1). The Commission does not destroy or remove public records until the retention period for records has elapsed, which period will generally be at least twenty years, and certain records are transferred to the Government of Ontario Archives” (February 6, 2006).
The OSC also followed an inquiry regarding people being licensed to sell securities and reported in one case that while his wife was, the actual selling agent was not licensed. It would appear that in many cases Bank loans were arranged by unlicensed dealers, that is: accountants selling unregistered investment products.
In my case, the focus to becoming a partner in Allied Canadian Front Street Properties was on tax shelter benefits in a secured investment in property value. And, it wasn’t difficult … simply sign on a few ‘Red Dot’ lines highlighted with ‘Sign Here’ tabs pointed out by my accountant. I never heard from a Bank and never ever received any loan account statements, so I was completely unaware that ‘No Cash Down’ was double speak for a personal loan to be renewed in ten years against ‘Approved Credit’ based on imaginary assets and a promissory note filled out in my accountant’s handwriting …
The following survey provides a statistical sampling that appears to indicate a pattern of selling Allied investment products with undisclosed ‘Tied Loans’. We would like you to do your part in following the money. That is, follow the signatures that engages debts with the Bank of Montreal and possibly other Banks involved with similar agreements and funding ‘Technologies’.
Allied Canadian investment contracts include two key documents held by the Bank that you may not be familiar with … at least in the usual business of borrowing money. But people did sign them:
‘Statement of Affairs’ which Banks regard as loan applications that do not require debtors’ signatures, or any active participation or awareness of borrowing when they are accompanied with signed ‘Agency Waivers’ and ‘Affidavits of Subscribing Witness’ for a Bank to transcribe financial information to ‘Personal Loan Service Applications’ PLSA’s without validation or confirmation with debtors.
‘Affidavit of Subscribing Witness’ which in several examples, Allied Sales Agents signed as paid witnesses to investor signatures for paid commissions from the ‘Promoter’, who as a ‘Commissioner for Taking Affidavits’ appears to systematically ‘Notarize’ investors’ passages into debts – to receive ‘Units Sold’ purchase amounts from the Bank.
To assess the scope and collective impact to justify full scale inquiries; the following table tallies ‘Approved’ loans. And, to prove agency relationships … the occurrence of notarizations with the ‘Promoter’s’ signature that compares with the President, Allied Canadian who also signed covering letters investors received with finalized partnership agreements.
You may not have a copy of the ‘Affidavit of Subscribing Witness’ which is a Bank document to use your signature for ‘Off-site Loans Closings’. Feel free to contact us if you are not sure, or if you need to obtain your documents from the lending Bank. In our experience – the Bank of Montreal has refused to provide certain documents and we recommend you authorize us to request them for you, as knowing they exist by your account number … we will subpoena them in class action litigation.
Our petition has started with 73 parties interested in OSC and RCMP inquiries. Robert Beres, engaged by investors, speculated on CHTV Live@5:30 (The Perfect Sting – January 11, 2006) that ‘Sitting Duck’ loans are commonplace and that some 308 people were indebted to about $20 million in these investment products alone.
There are hundreds of thousands of ‘Bankrolled’ tax shelter schemes with ‘Sitting Duck’ loans that run into the billions. Everyone is a target.
Based on the government’s acknowledgment of the scheme described in the book and a promise to introduce consumer protection, we hope the public will join our petition for better ethics in banking.
We will periodically update the petition counts and are willing to develop more detailed analyses to draw and label document flow charts as requested for individual cases added to the class action.
Please review the following column headings and add your data by calling 905 842 4798 to discuss the required documents, or, send your response by email HYPERLINK "mailto:info@tonycrawford.org" info@tonycrawford.org
We will keep you informed …
Bank of Montreal ‘Sitting Duck’ Clients with Allied Canadian Notarized ‘Tied Loans’
(Ongoing Analysis Data Subject To Verification and Proof in Litigation)
