Mississauga lawyer’s licence suspended after mortgage loan scam

A Mississauga lawyer’s licence has been suspended as an investigation into a predatory mortgage loan scheme involving vulnerable seniors continues.

A Law Society of Ontario tribunal temporarily suspended Mississauga lawyer Danielle Shannon Harrison’s licence as she may cause a “significant risk of harm to the public,” according to the decision posted online.

An investigation is looking into whether she “participated in or facilitated a predatory mortgage loan scheme involving vulnerable senior citizens,” the June 2 decision from chair C. Scott Marshall reads.

Harrison obtained her license on June 26, 2017, and was working at Keyser Mason Ball LLP in Mississauga as an associate since Dec. 1, 2020. She spent the majority of her time practising real estate law and “acted on more than 900 real estate files a year and was essentially running KMB’s residential real estate practice.”

When reached by phone, Keyser Mason Ball LLP, declined to comment on the case as the investigation is ongoing. Harrison is not listed on their website.

The Law Society’s investigator found a scheme involving door-to-door salespeople who were inducing senior homeowners to sign contracts for home equipment such as HVAC systems and renovations. Police warned of this type of scam earlier this year.

The contracts involved monthly payments through a “notice of security interest” or lien on their property, often without their knowledge. In some cases, the senior citizens were also induced to take out small mortgage loans to pay for further home renovations and services.

The senior citizens were then approached by more door-to-door salespeople to sign further home renovation contracts, which were financed by a large mortgage (between $100,000-$550,000) on their property.

The senior homeowners were all on a low fixed income; they had multiple liens on their properties within a short period of time; the interest rate was 25 per cent; and there were substantial lender and broker fees, the investigation found.

The senior homeowners were unable to repay the mortgages.

The issue came to light after the Law Society received four complaints.

Two complaints came from the Advocacy Centre for the Elderly on behalf of two senior citizens; one came from a senior citizen’s attorney for property; and another from an elderly couple’s daughter.

All the complaints are related to Canada Choice Investment mortgages, the investigation found.

The Law Society then obtained 31 other transaction files from Harrison involving senior citizens taking out mortgages with Canada Choice Investment, brokered by Centum. In 14 files, Harrison acted for the senior borrower and in 17 files she acted for the lender.

In one case, Harrison acted as lawyer for a homeowner on a $550,000 mortgage from Canada Choice Investment at 25 per cent interest rate which closed on July 13, 2021.

Harrison knew the homeowner was retired, single and had a yearly fixed income of $49,000 and a $100,000 secured line of credit.

Other cases followed a similar pattern.

“The panel found that the mortgage transactions exhibited many red flags of predatory lending schemes including a 25% usurious annual interest rate imposed on elderly borrowers living on modest fixed incomes,” the decision reads.

Harrison “failed to advise her borrower clients of the very concerning terms of these often unnecessary mortgages, which would likely lead to default.”

The panel also found that there appeared to be a lack of integrity in Harrison’s dealings with the Law Society. She failed to disclose all of her trust accounts when requested.

The suspension came as “the evidence showed that there were reasonable grounds for believing that there was a significant risk of harm to the public and/or to the public interest in the administration of justice.”

For more on the Law Society Tribunal decision, see the case here.