A marathon investigation into one of the biggest financial frauds in B.C. history concluded Tuesday with multiple charges against former Vancouver lawyer Martin Wirick and Vancouver real estate developer Tarsem Singh Gill.Wirick was arrested at his Vancouver workplace, Koko's Gourmet Pet Foods in North Vancouver, and Gill near his Ross Street home in South Vancouver on Tuesday by members of the special RCMP-Vancouver police task force that conducted the six-year investigation.
Both men were later released. They are scheduled to make their first court appearance on Sept. 15.Martin Wirick faces multiple charges as a result of a six-year investigation into one of the biggest frauds in B.C. history.
Vancouver Sun filesWirick and Gill are charged with two counts of fraud and theft against 77 different homeowners, and two counts of fraud and theft against lenders in 30 different loan transactions.Wirick is also charged with two counts of uttering false documents and Gill with one count of possession of stolen property.
The total amount of money alleged to have been unlawfully taken from homeowners and lenders exceeds $30 million.The biggest victim, however, was the B.C. Law Society. Its special compensation fund, which insures clients for lawyer fraud, paid out $38.4 million in claims on account of Wirick's alleged misconduct."As far as we know, not a single person lost their home over this," society president John Hunter said in an interview. "We are quite proud of that."
To pay for the claims, the law society imposed special assessments of $600 per year on each of its 10,000 lawyer members. (That assessment has since been reduced to $150 per year.)Gill's method of operation -- as described in the Benchers' Bulletin (the law society's in-house publication) -- was to develop a property and sell it to one of his nominees. The nominee would arrange a mortgage on the property and then sell it to an innocent purchaser.The purchaser, in turn, would arrange financing from his lending institution and forward the money to Wirick on his undertaking to pay off the original mortgage loan and register a new first mortgage. But rather than disburse the money as promised, Wirick simply paid the funds to Gill and his Vanview group of companies.In many cases, Wirick would provide false discharge documents, and a portion of the purloined money would be used to keep the original mortgage payments current, so neither the purchaser nor the original mortgage lender would be any wiser.The new mortgage lender, meanwhile, naturally assumed he had obtained a first mortgage against the property. But since the original mortgage hadn't really been discharged, he was actually in second position.In some cases, this process was repeated, enabling Gill to mortgage the property many times over and generate more money than it was worth. Eventually the scheme collapsed, revealing a tangled web of transactions, mortgages and competing claims.When the scheme was uncovered, law society officials took over Wirick's practice and audited his books and records. They also obtained access to Gill's records through the court, which gave them a good idea of where the money went.
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