Fraudsters hijacked GTA man’s company record, tried to mortgage its $12M property for cash

The recent case of Hitender Sharma’s holding company being hijacked by fraudsters has shed light on a new type of fraud targeting commercial properties in the Greater Toronto Area (GTA). Sharma, who was driving from Toronto to Windsor when he received the shocking phone call from a private investigator, was informed that his company’s director and address had been changed without his knowledge. This was part of a scheme by fraudsters to gain access to the mortgage-free commercial property owned by Sharma’s company in Mississauga, with the aim of cashing in on millions of dollars in equity.

According to Brian King, the private investigator who alerted Sharma, his property was one of five GTA commercial properties targeted by a group that took over companies owning the properties late last year. In one case, the group successfully sold a Caledon property to a lender for nearly $5 million without the rightful owner’s knowledge.

Sharma’s property remains mortgage-free and unsold, but he is still working to regain control of his holding company. The fraudsters were looking to secure a $5 million mortgage on Sharma’s property, but were unsuccessful in their attempts.

Brian King suspects that there may be more properties targeted by the same group, and his firm is currently investigating other potential cases of property hijacking. This scheme raises concerns about the security of the Ontario Business Registry, which went digital in 2021.

The Ontario Business Registry introduced a new security feature called a “company key” to allow business owners to make changes and submit filings online. While new companies are automatically issued a key, older businesses have to request one. Sharma’s company, which was incorporated in 2014, only received a company key in April 2024.

The process of requesting a company key involves providing information that demonstrates a connection to the business. However, experts like Brian King and cybersecurity adviser Mike Gropp believe that the verification process is weak and easily exploitable by fraudsters.

Sharma reported the incident to Peel Regional Police and has reached out to the Ministry of Public and Business Service Delivery and Procurement for assistance. The ministry, however, has stated that it is not responsible for the accuracy of records and advised Sharma to contact the service provider, Dye & Durham, for further action.

Dye & Durham, the online service provider, has stated that anyone with a company key can make changes to a corporation record, raising concerns about the lack of oversight and accountability in the system. Sharma’s lawyer has sent a letter to Dye & Durham requesting the reversal of the changes made to his company record.

Overall, Sharma’s case highlights the vulnerabilities in the current system and the need for stronger security measures to protect business owners from fraudulent activities. The government and service providers must work together to ensure the integrity of the Ontario Business Registry and prevent such incidents from happening in the future.