RCMP Uncovers Complex Fraud Scheme: Toronto Family Charged with Over $1 Million in Fraud

In a shocking turn of events, the Royal Canadian Mounted Police (RCMP) have announced the discovery of a complex financial fraud scheme that led to charges against a Toronto family. The scheme is believed to have resulted in over $1 Million in fraudulent funds obtained through the Canada Small Business Financing Program (CSBF).

Discovery of the Fraud Scheme

The CSBF loan program is designed to assist small and medium Canadian businesses with financial resources, unrelated to any COVID-19 government programs. However, investigators from the RCMP began looking into suspicious loan applications granted under this program in December 2017 following a referral from Innovation, Science and Economic Development Canada.

Suspicious Loans and Fraudulent Documents

Detectives found that a number of these loans were granted to members of one family, using fraudulent documents to increase the chances of approval. The scam involved a sophisticated network of fake and legitimate companies. The proceeds of crime were either transferred through or commingled with legitimate funds, making it difficult to trace the illegal funds. Some of the companies and bank accounts were established specifically for the purpose of moving the proceeds of crime.

1. Fake and Legitimate Companies
2. Commingling of Funds
3. Establishment of Companies and Bank Accounts for Money laundering

Transfer of Funds and Default on Loans

Once the loans were approved, the funds were typically transferred out of the applicant company’s account immediately. The applicant company would eventually default on the loan, leaving the federal government and the financial institution to bear the loss.

1. Transfer of Funds
2. Default on Loans

Charges against the Toronto Family

On April 19, 2022, Kageepan Nadarajah, Sinnathamby Nadarajah, and Karunadevi Nadarajah were charged with fraud over $5,000, possession of property obtained by crime, and money laundering. Kageepan Nadarajah was also charged with an additional count of fraud over $5,000 (CP24).

RCMP’s Commitment to Protecting Canada’s Financial Integrity

Superintendent Jeff Cooper, District Officer in Charge of Federal Serious & Organized Crime at the RCMP, stated, “Economic and financial crimes threaten the Canadian economy and divert funds away from hard-working Canadians. The RCMP is committed to protecting Canada’s financial integrity, especially when public funds are misused.”

Support from Government Agencies and Forensic Accounting Services

The investigation was supported by Innovation, Science and Economic Development Canada, as well as FINTRAC. Forensic accounting services were provided by the Forensic Accounting Management Group of Public Services and Procurement Canada.

Reporting Suspicious Activities

The RCMP encourages the public to remain vigilant and report any suspicious activities to their local police, the Ontario RCMP, or anonymously through Crime Stoppers.