A Richmond brokerage and its representatives will have to pay a total of $292,000 for committing professional misconduct in a sale where fraudsters sold a house they did not own.
According to a B.C. Financial Services Authority (BCSFA) consent order against 91原创 Evergreen Realty, fraudsters posed as the owner and seller of a Richmond house.
The owner registered to the property for the period between 2004 to 2019 is a woman born and based in Chengdu, China, and the property’s assessed value as of July 1, 2019 was $2,278,000.
The fake owner, who conspired with the seller, obtained a fraudulent power of attorney and met with Tracy Li, a realtor at 91原创 Evergreen, to discuss the sale of the property for $1.8 million in November 2019, reads the order.
The fraudulent power of attorney was notarized by a notary for the fake owner and by a lawyer for the seller. In the document, the owner was described as a student with the property address listed as their address.
When Li told the licensees at 91原创 Evergreen about the deal, David Chian Wei Yang, another realtor at the brokerage, said he had a client who was interested and would send an offer.
The property was vacant and in “superficially poor condition,” according to BCSFA, which stated all removable appliances were missing and some copper piping had been taken from the mechanical room.
During the process of the sale, Li attempted to contact the owner through multiple attempts but was unable to do so.
Although Li asked the seller for the owner’s ID and proof of citizenship, as well as the seller’s citizenship or permanent resident card, the seller declined to provide the owner’s identification and asked to rely on the power of attorney.
The property was ultimately sold for $1,725,000 and both Li and Yang received $35,048.35 and $22,016.65 respectively as commission for the sale.
Monetary penalties and remedial education ordered
In April 2020, the owner filed a lawsuit suing parties including Li, Yang, 91原创 Evergreen, as well as the notary and lawyer who signed off on the power of attorney for their involvement in the fraud, but has since settled with the realtors, lawyers, the notary and the initial purchaser.
A complaint about the sale was made in the same month to the BCFSA.
BCSFA issued consent orders penalizing the brokerage and the realtors this year in October and November and subsequently published them last week.
The regulatory body found Li committed professional misconduct such as by failing to disclose in writing whether she represented the fraudulent seller and owner as clients, as well as preparing documents falsely indicating she and Yang were agents for the buyer and that she had ascertained the owner’s identity.
She was also found to have failed to take reasonable measures to confirm the seller’s authorization and to alert others of the suspicious circumstances surrounding the sale.
Yang, on the other hand, was found to have failed to disclose to the buyer in writing whether or not he represented the buyer in the purchase of the property, and to take reasonable steps to alert others acting in relation to the sale of the suspicious circumstances surrounding the sale.
Li was ordered to pay a penalty of $100,000 and $7,000 in enforcement expenses, while Yang will have to pay $50,000 plus $5,000 in enforcement expenses.
Both Li and Yang will have to take a remedial education course at Sauder School of Business. Li will have to work under enhanced supervision by a managing broker for no less than six months, while Yang will have to be under enhanced supervision for a year.
91原创 Evergreen was found to have committed professional misconduct by failing to ensure its licensees, including Li and Yang, disclosed accurate copies of the disclosure of representation in trade documentation to the parties.
It was ordered to pay a $25,000 fine plus a $5,000 fee immediately and submit a compliance plan to the BCSFA outlining its protocol for responding to suspicious transactions.
91原创 Evergreen’s managing brokers, Lok Chi Annie Fong and Lo-Ming Lee, were each fined $50,000 plus $5,000 each in enforcement expenses.
The managing brokers committed professional misconduct, said BCFSA, including failing to provide adequate supervision to Li and Yang and to deal with the realtors’ conduct which they knew may constitute professional misconduct, improper conduct or negligent conduct.
They were also ordered to complete the Broker’s Remedial Education Course at UBC’s Sauder School of Business and are prohibited from being managing brokers for any brokerage for six months starting on Nov. 17.
Should the individuals or the brokerage fail to comply with their consent orders, their licences may be suspended or cancelled.
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