Two Bank of Montreal mortgage brokers are charged with fraud

Friday, May 29th, 2009

Not so, says bank’s former top mortgage specialist and 2 other defendants

Susan Lazaruk

The Bank of Montreal Brentwood Centre branch, where Josephine Tortora allegedly split commissions with her manager Shenaz Poonja to become a defendant in a fraud lawsuit by the bank. Photograph by: Ric Ernst, The Province

The Bank of Montreal’s top mortgage specialist in Canada — who pulled in up to $1 million a year for five years working out of a Burnaby branch — is being sued by the bank for fraud.

The bank alleges Josephine (Giuseppina) Tortora secretly split commissions with her manager, Shenaz Poonja, a straight-salary employee, as payment for mortgages Poonja referred to Tortora.

Poonja, among the bank’s top financial-services managers in the country, was also named in a lawsuit filed in B.C. Supreme Court, along with her husband, Shaffin Punja, who didn’t work for the bank.

The bank alleges that from 2005 to 2008 Tortora transferred $245,000 to Poonja’s account at a different bank in payment for the mortgage referrals. The women worked at the Brentwood branch.

Tortora’s yearly income, $30,000 in salary and the rest in commission, was between $800,000 and $930,000 during those years, according to court documents.

The lawsuit further alleges the three defrauded the bank by granting mortgages to 10 homeowners in Ontario based on appraisals they knew were submitted by a third party, George Papadogambros, against bank policy.

Papadogambros had altered the appraisals to overinflate the value of the houses, with the defendants’ knowledge, the suit alleges.

The three have denied everything in the lawsuit except their names and addresses and the two women have filed wrongful-dismissal counterclaims.

“This whole thing is bogus,” said Tortora, reached at her New Westminster home, one of six properties the lawsuit lists as hers.

“Some of the things the bank is pulling is insane.”

She referred other questions to her lawyer, David Perry.

“My client absolutely denies she’s done anything wrong in this,” he said. “She has been a very successful banker for the Bank of Montreal for years.”

Poonja and Punja’s lawyer, Naz Mitha, said: “The bank’s claims are completely without merit. Their own lending practices were lax.

“The bank was completely, fully aware of that [Poonja referring mortgages to Tortora],” he said.

Both women said the bank supported the team approach to mortgage-granting.

The bank, in its lengthy statement of claim, alleges Poonja regularly referred customers to Tortora, even though she was qualified to enter mortgage applications, creating “unnecessary commission charges to the bank.”

It noted Poonja initiated 122 mortgage applications in 2004 and 90 in 2005, but fewer than a half-dozen in each of the years 2006 to 2008.

Poonja referred between 40 and 100 mortgage customers a year for 2004 to 2008 to Tortora, for a total of $200 million in mortgages, the suit claimed.

The bank also requested the court freeze the defendants’ assets because it feared Tortora would move to Quebec and Poonja and Punja to Dubai, the suit said.

“The allegations made by the bank to support their cause of dismissal are unclear, untrue, misleading and inflammatory, high-handed, reprehensible and malicious in nature,” said Tortora’s defence statement.

Both women claim the bank has yet to properly provide the basis for the allegations and are also suing the bank for negligence.

Tortora was the bank’s top mortgage salesperson in Canada for 2003 to 2007 and was given the bank’s “best of the best” award for 2004 to 2008.

Poonja, who earned almost $95,000 a year with bonuses for a four-day week, had been awarded the “best of the best” award for five consecutive years.

Both were dismissed “for cause” at the end of last year, during which time, Tortora said in her statement of defence, she was earning $100,000 a month.

Reached at his North York, Ont., home, Papadogambros said he couldn’t comment on the lawsuit and that he was facing one of his own filed by the bank in Ontario.

None of the allegations have been proved in court. A trial date is set for October 2010.

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