Ali Alijanpour, an artist in Richmond Hill, Ont., alleges he was among those defrauded by Arash Missaghi.Fred Lum/The Globe and Mail
When Arash Missaghi was shot and killed in his Toronto office in June, the 54-year-old’s death exposed two decades of serial frauds, victimizing dozens of people and receiving no sanction from the civil or criminal courts. Along the way, he was represented by at least seven real estate lawyers and found to have bullied and threatened some of them.
Fraudulent mortgage investments were Mr. Missaghi’s trade, according to multiple civil suits filed against him, as well as two major criminal cases that collapsed. But no matter how many legal advisers he burned through – five were sanctioned by the Law Society of Ontario for roles in their client’s schemes – he was always able to find another lawyer to work with him.
The litany of lawyers who became entangled with him, and who have since seen their careers tarnished or vaporized as a result, raises questions about whether certain clients can be represented without lawyers risking reputational harm and what, if anything, a law society can do to warn its members.
Professor Andrew Flavelle Martin, of the Schulich School of Law at Dalhousie University, says Canada’s legal regulators may have to develop better warning systems.
“The law society has to be concerned that if it happened once it may well happen again,” Prof. Martin said. “If a law society knows from a pattern that Person X develops relationships with lawyers and then exploits them, then it would certainly be important for lawyers to be on the lookout and not associate with those people – and not get sucked in.”
Ali Alijanpour, an artist in Richmond Hill, Ont., alleges he was among those defrauded by Mr. Missaghi. He filed a complaint to the law society and today says that such bodies need to do more to protect people like him.
“It’s like having a car without tires; the lawyers are the tires that enable this fraudulent vehicle to move forward,” he says. “Without the help of lawyers, people like Arash Missaghi would not be able to conduct their crimes.”
Alijanpour filed a complaint to the law society. He says that such bodies need to do more to protect people like him.Fred Lum/The Globe and Mail
For years, law societies in Canada have sounded alarms about an increase in mortgage fraud and bulletins have warned lawyers they risk devastating career repercussions if they wittingly or unwittingly facilitate fraud.
Records obtained by The Globe and Mail identify the real estate lawyers who worked for Mr. Missaghi and were sanctioned during the 2010s by the Law Society of Ontario and faced penalties ranging from temporary licence suspensions to disbarment for their roles in helping carry out mortgage fraud. The law society tribunals found that, at times, Mr. Missaghi threatened some of those lawyers with physical harm.
Prof. Martin said he could recall no similar circumstances where one bad actor factored into so many documented disciplinary actions against distinct lawyers.
In an interview, Doug Bourassa, a lawyer who has represented multiple alleged Missaghi victims, said he had personally complained to the law society about lawyers acting for Mr. Missaghi many times and also warned individual lawyers that they risked reputational and financial harm if they did business with him.
A spokeswoman for Ontario’s law society said if the regulatory body learns of crimes, it reports them to police. It also encourages lawyers who are the victims of threats to complain to law enforcement.
“Since 2004, the Law Society has commenced a significant number of regulatory proceedings against lawyers in which mortgage fraud was alleged,” said spokeswoman Amy Lewis.
But she said such matters do not involve public warnings about fraudsters who are not lawyers. “There may have been circumstances in which the Law Society, in its long history, published a warning to its licensees about working with a particular individual or considered doing so,” Ms. Lewis said. But she added that “this is no longer the Law Society’s approach.”
Law societies exist in every province to hold lawyers to account. Lawyers who run afoul of ethical practices can face penalties ranging from fines to suspensions to disbarment.
“If you actually disbar people, you take professional action against them, you’re effectively taking their livelihood,” said Christian Leuprecht, a security expert at Queen’s University. “It sends a very clear message.”
Lawyers can lend legitimacy to questionable and unconventional investment vehicles that lack standard consumer protections such as syndicated mortgages. While the work of structuring such deals can be lucrative, it can also raise red flags.
In 2017, Ontario’s legal regulator put out specific warnings to lawyers about the pitfalls. “The Law Society has become aware of instances in the marketplace where individuals have sustained significant financial loss,” the regulator said. It warned lawyers to be wary of any “facilitator or promoter” who offers lawyers inducements to draw prospective investors into these dubious arrangements.
Records requested from the law society and civil lawsuits paint a portrait of Mr. Missaghi as an incorrigible thug who often targeted unsophisticated investors, at times in immigrant communities. He would entice people into lending him money, sometimes directly, other times through corporations or professionals he controlled. For years, the Law Society of Ontario tried to keep up with these dealings as it investigated complaints against several Toronto lawyers.
Norman Silver fell under scrutiny for facilitating six Toronto property sales between 2007 and 2013 that appeared “to have been part of a large and complex mortgage fraud scheme orchestrated by [Arash] Missaghi and his associates,” law society tribunal documents say.
Mr. Silver was in his 70s and had practised for more than 40 years when allegations about his unwitting role in enabling $2-million in mortgage frauds were aired. He surrendered his licence after a tribunal.
Golnaz Vakili was 30 when she was called to the bar. A few years later, she fell under Mr. Missaghi’s sway and became the subject of a Toronto Star article describing how she fled her family, her law practice and even Canada in apparent fear of the man. In 2015, Ms. Vakili was disbarred for her work in what law society documents called “a massive fraud spree and multiple dishonest acts involving 13 different properties over a two-year period.”
In 2016, lawyer Jonathane Ricci had his licence suspended for failing to co-operate with an investigation. The society’s forensic auditor, Mary Ann Lord, swore an affidavit saying the case arose from suspicious property deals she was investigating that seemed to trace back to a common set of actors, including “a non-licensee named Arash Missaghi” who was “a recurring participant in other allegedly fraudulent transactions.”
When the auditor pressed Mr. Ricci for additional details, he stalled for months, demanding to know who the law society’s complainants and sources were. He was suspended at tribunal for breaking rules that require candour and co-operation from lawyers under investigation.
Mr. Ricci sued the law society for ousting him. But his case was thrown out after a judge concluded it was an abuse of process; he never appears to have re-entered the legal profession.
In 2018, the law society suspended for one month the licence of Barry Polisuk, a veteran 30-year lawyer.
Filings in that case say that Mr. Missaghi was a client who “orchestrated” two fraudulent real estate transactions. The lawyer was not accused of deliberate wrongdoing. Rather, Mr. Polisuk was found to have abdicated his responsibility to adequately oversee matters.
In 2019, a fifth lawyer, Rasik Mehta, admitted wrongdoing and surrendered his law licence after several real estate deals he worked on crashed. Investors had funnelled more than $3-million into them. In his defence filings, Mr. Mehta said he joined Mr. Missaghi out of law school after answering a job-wanted ad. He told the tribunal he was then threatened into doing whatever was demanded.
“If the lawyer had any detailed questions about specific transactions, he usually got answers from Missaghi such as ‘I have ways of quieting down those who ask me stupid questions,’” tribunal records say.
Documents aired in those proceedings revealed text messages from Mr. Missaghi. “I’m a big man and people fear me. … i can ruin your lives overnight,” one read. Another message to Mr. Mehta simply said: “People who disobey me end up missing.”
Mr. Mehta lost his licence in 2019. There are no known records of any lawyers being disciplined after this point.
The Globe tried to contact all five lawyers in these cases or their former legal counsel; most declined to comment. Ms. Vakili could not be reached, and Mr. Silver said he surrendered his licence in 2015 but “there was no mortgage fraud.”
For the past two months, Alisa Pogorelovsky has been a widow raising by herself her two children, a six-year-old boy and 17-year-old daughter.
Her husband, Vadim (Alan) Kats, was identified as the gunman in the Toronto office in June who killed Mr. Missaghi and mortgage broker associate Samira Yousefi before turning the weapon on himself.
Ms. Pogorelovsky said in an interview that she and her husband went all in on a 2022 mortgage investment scheme that cost them more than $1-million. They scraped much of that investment money together from relatives.
She said that by late last year, the couple realized they had lost all their money to Mr. Missaghi, who had used an alias in his dealings with them. She says that after the shooting, Mr. Kats left behind a suicide note that named Mr. Missaghi, Ms. Yousefi and two lawyers as targets.
Neither of those lawyers, Frederick Yack and Shahryar Mazaheri, would agree to be interviewed by The Globe. Both remain members of the bar in Ontario. Each has been sued by several plaintiffs in unproven claims arising from property-and-mortgage work in cases in which Mr. Missaghi is also often named as a co-defendant.
Lawyers for both men declined to comment, noting the case is before the courts.
Ms. Pogorelovsky complained to the Law Society of Ontario about the two lawyers earlier this year. An investigation is continuing.
Ms. Pogorelovsky has also launched a civil suit against Mr. Missaghi and his associates at the Ontario Superior Court, where Justice Lee Akazaki ruled early this year that the assets of Mr. Missaghi and other defendants should be frozen.
While that ruling did not include Mr. Yack, Justice Akazaki wrote that it appeared as though Mr. Yack’s “management of client retainers entailed a malignant interpretation” of the law society’s conflict-of-interest rules.
Mr. Yack’s lawyer, Aaron Hershtal, said in an e-mail that this judicial remark should not be interpreted as an adverse finding against his client, who denies wrongdoing in filings related to the case.
“Justice Akazaki’s comments were made without Mr. Yack’s ability to make submissions or to respond to the allegations against him,” Mr. Hershtal said. “At the appropriate time, Mr. Yack will provide a complete and robust response to these allegations.”