Ontario regulator targets Whitby deal that ended in a forced home sale
Ontario’s financial regulator has trained its sights on a Whitby transaction where borrowers lost their home after a layered financing structure and allegedly falsified documents helped secure their purchase in 2022.
In a notice of proposal dated March 24, 2026, the Financial Services Regulatory Authority of Ontario (FSRA) alleged that mortgage broker Baiju Vijayaraghavan, unlicensed consultant Sukhraj “Sue” Atwal and real estate agent Balwinder Chouhan orchestrated “fake gift letters” and an unsuitable second mortgage tied to a $1.55 million purchase in Whitby.
The borrowers later sold the property for $1.3 million when payments became unaffordable, according to the regulator.
FSRA alleged that Vijayaraghavan, then a licensed broker with Dominion Lending Centres The Guardian, “provided fake gift letters to the Bank of Nova Scotia to secure a first mortgage for the purchasers of the Whitby property.”
The documents purported to show gifts of $80,000 and $160,000 from relatives, even though “they had not made gifts and were not related” to the borrowers.
A private second mortgage of $264,000 followed, with terms that included a 2% lender/broker fee of $26,400. FSRA said Chouhan “solicited RM, her neighbour, to lend money for the second mortgage” and was paid for acting as broker despite never holding a mortgage licence.
Atwal, a director of HPA Financial Services, allegedly supplied the gift letters and held herself out as a mortgage professional through business cards and email communications.
The regulator proposed a permanent compliance order prohibiting Atwal from using mortgage titles, preparing mortgage documents, soliciting lenders or “carrying on the business of dealing or trading in mortgages in Ontario.”
It also proposed administrative penalties of $50,000 for Atwal, $30,000 for Vijayaraghavan and $10,000 for Chouhan.
These remain allegations, and all three requested hearings before the Financial Services Tribunal.
FSRA said the conduct caused “significant harm,” leaving borrowers in an unsuitable structure and exposing both a chartered bank and a private lender to misrepresented risk.
The Director concluded that none of the three has taken mitigating steps and that the proposed penalties are intended “to promote compliance” rather than punish. Any economic benefit they derived from the Whitby deal was a factor in the proposed amounts.
In recent months FSRA has moved against Ontario brokers and agents in other alleged document‑falsification schemes, including a London‑area file involving a “false ‘gift letter’” and layered high‑cost loans that culminated in the forced sale of a family home. The regulator also proposed penalties against two licensees over “alleged fake mortgage documents” spanning multiple properties in southern Ontario.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
