Rule of Law my butt

Part 3 – The Means

by Timothy Paul Madden, forensic-financial-economist, and historian of equity, law, and policy.

The truth may not always be discernible, but when it is discovered, it is according to the truth and not according to the fiction that we are to give to the transaction its character and denomination. – Lord Stowell (1745-1836) 

 

Sun Life transaction as typical example of process

Sun Life Financial Inc. and Sun Life Assurance Company of Canada, for example, are major Canada-based international financial institutions whose management have been directly and indirectly flooding domestic and international financial markets with falsified securities that are legally defined and classified as “false documents” and constructive forgeries or forgeries-in-law, and / or proceeds of crime.

In addition to multiple constructive and / or prima facie criminal-law defects, these nominal securities are at best wholly debt / liability-assumption-based (credit-reinsurance / equity-extraction-based) but have been falsified to claim to evidence equity-investments by Sun Life, and to conceal and deny the fact that Sun Life is also participating in a ponzi or money-increment scheme by kiting (cross-accommodating the assignment and re-assignment) of its unfunded / unsecured liabilities between and among other members of the Canadian Payments Association (CPA).[1]

Under the following sample / example transaction, Sun Life allegedly or purportedly loaned $2.1 million to the (co)issuer of the mortgage security (which I will call BuyerCo – not the real name) to purchase an apartment building from the then current owner / vendor of the property (likewise SellerCo).

But management at Sun Life also required that the vendor and existing owner of the property (SellerCo) nominally being purchased also agree to become a covenantor or nominal co-borrower (co-mortgagor) under the mortgage.

The particular circumstances of this nominal-transaction exposed and laid bare Sun Life’s foundational business model of asset harvesting by misrepresenting the bare issuance and assumption of liabilities as equity investments. Like all the other broadly-defined (or rather pretended) banks (credit-reinsurers-in-fact), its objects and methods are the same in virtually all cases, but which are made exceptionally obvious by the means by which it was carried out in this particular case (i.e., (and among other things) the purchaser and the vendor normally do not share information, but here they are the same joint-party).

More specifically, the special circumstances later allowed the human owners / principals of BuyerCo and SellerCo to determine and know with certainty, after it was brought to their attention, that the payment and receipt clause was false as and when the securities were sworn and executed by them.

They knew that neither one of them had in fact received the alleged payment, yet their gross combined assets had in fact, and otherwise in law, been transferred or conveyed to Sun Life. And their subsequent banking records proved and verified it in fact.

Also, this is only one of five principal transactions between / involving Sun Life and the owner of BuyerCo in 1996 and 1997, under which Sun Life obtained circa $50 million in broadly-defined assets employing the same modus operandi.

And however brief the period in fact (minimum three business days), they had been made vulnerable to (exposed to the risk of) the contractual loss of all of their assets. More precisely and critically under the criminal law, upon signing, they had then already suffered the contractual loss of all of their assets, and were then exposed-in-fact to the contracted risk of receiving nothing in return.

The process began with the Offer Letter as covered generically in Part 1.

The potential nominal borrower to whom the de facto offer was made or solicited (and accepted (as the best deal they could get in the Canadian environment)) had a net circa $10 million in broadly-defined assets (including the net-present-value of the expected increase in cash-flow from the investment / improvements), and no material liabilities:

  1. First, you will obtain $46,000, and deliver it to us at the address designated below. This entry fee is non-refundable.[2]
  2. You will then register an unconditional charge and undertaking of liability in the amount of $2.1 million to us, and against your property, at the Land Title Office (one of the two-pretended-co-borrowers already owned (near-clear-title) the real estate and buildings).
  3. You will give us a notarised receipt claiming and swearing under oath and penalty of perjury that we have already paid you $2.1 million of lawful money of Canada, and that you have received it from us.
  4. You will legally restate and ratify our payment, and your receipt, of the above indicated $2.1 million, by providing for the registered securities to claim and swear compliance with the federal securities law (Interest Act, s. 6). Under the same securities you will deny by omission both the fact and amount of the aforementioned $46,000 cash-entry-fee / cash-payment to us.
  5. You will give us a sworn and notarised undertaking that you will pay us an additional $2.1 million by stipulated instalments and / or On Demand.
  6. You will provide and register a conveyance of the legal title and ownership of your land and buildings to us, in exchange for a repurchase-option to buy it back from us by paying us all of the money you are required to pay us under all of the securities, and by doing everything else that we require you to do.
  7. You will provide and register a conveyance of the legal title to your ongoing gross business revenue / cash-flow by a sworn and notarised and separately registered Assignment of Rents in favour of us (for us to use in the international markets).
  8. You will give us a sworn and notarised undertaking that if any of the above terms are illegal or criminal or unenforceable for any reason, then the agreement remains valid anyway, and the interest rate is amended and increased to 59% per annum in favour of us, and applied against the amount secured irrespective of the amount ultimately advanced / returned to you.
  9. And, once you have unconditionally done / conveyed all of the above money, financial assets and property to us, you will agree that anything that we give you, or are contractually obligated or required to give you, in return, shall be at our sole discretion.

Here again, it is near inconceivable as to what the solicitors could have been thinking – but it is what it is. When confronted with the reality of it (i.e., most recently beginning in the fall of 2016) – and the fact of two dozen or more prima facie racketeering offences, the current lawyers for Sun Life refused to discuss the matter, and would say only that the arrangement was “a standard business deal”. That’s the whole problem then.

But even with a net circa $10 million in unencumbered equity and realistic-potential-equity[3], it was the best deal that they could get in the Canadian environment, and the owners of BuyerCo/SellerCo accepted the offer that is structurally indistinguishable from a terrorist-extortion-demand-letter or gangster / racketeering shake-down-letter.

Most critically, the entire arrangement or nominal transaction was unlawful and illegal and void ab initio and in toto (from its inception and in its entirety). No right of property in anything given over to the custodial possession of Sun Life ever passed to Sun Life, and it remains a constructive trustee (in favour of BuyerCo/SellerCo) of all of the assets and all of the gains that it has made from the assets (same as in the 1990 Guiness PLC case discussed under Part 1).

In that sense, even the scandalously defective and offensive registered security instruments are functionally irrelevant, because the whole deal was void from the moment Sun Life management sent and transmitted the nominal Offer Letter[4] (about six weeks before the nominal mortgage was sworn and registered).

Ignoring, for the moment, the nominal loan fees (entry-fees and/or reinsurance-premiums-in-fact) and collateral securities (and the embedded disclaimers) (and the securities falsification to conceal it, and the wagering-format), a complete and accurate statement of the consideration to be provided and exchanged would have been as follows:

In consideration of BuyerCo/SellerCo first agreeing that they owe a secured $2.1 million to Sun Life, Sun Life will then agree that it owes an unsecured $2.1 million to BuyerCo/SellerCo.

At this point (in practice / appearances) the purported legal transaction is complete. Sun Life acquires a right of property in the securities, and in the legal title to the real estate property, upon (or rather just prior to) its issuance / assumption of a new and unsecured liability to the nominal debtor. The nominal debtor may or may not then assign or reassign that liability, in whole or in part, to others by cheque, but the conveyance of property rights is complete with the issuance of the liability by the bank to the nominal debtor and there remains nothing more for any of the parties to do.[5]

At this point (again, in practice (and / or by appearances)):

  • The bank owns the mortgage and / or promissory note, and the other nominal securities, that were immediately previously owned by and / or issued by BuyerCo and / or SellerCo (and under which the nominal debtor agrees that they owe the bank $2.1 million (now), and that they will pay the bank (another) $2.1 million according to the payment schedule).
  • The bank owns-in-fact (and / or is the holder / beneficial owner of) the legal title to the real estate property, that was immediately previously owned / held by SellerCo.
  • The bank has an unsecured chequing or other deposit account liability of $2.1 million to BuyerCo/SellerCo.[6]

and

  • BuyerCo/SellerCo have / own a chequing account credit for $2.1 million with Sun Life (and / but which did not cost Sun Life anything tangible to produce (i.e, in fact (equity) regardless, but also (in law) because it is unsecured).
  • BuyerCo/SellerCo also have a constructive repurchase option for the legal title, by paying Sun Life an additional circa $3.5 million over the next / subsequent eight years (later extended to ten years in fact).

There was no otherwise money involved, per se, only the mutual exchange and / or substitution of secured liabilities for an unsecured liability. There was no cash / equity investment by Sun Life – only the (and then only eventual) issuance / assumption of a new and unsecured liability.

Yet the purported and registered evidentiary instrument / security prepared and demanded by management of Sun Life contains the wholly and materially false and fraudulent presentation and statement that Sun Life had invested in, and paid to, BuyerCo/SellerCo $2.1 million of lawful money of Canada (emphasis added):

In consideration of the Principal Amount of lawful money of Canada, now paid by the Mortgagee [Sun Life] to the Mortgagor [BuyerCo/SellerCo], the receipt whereof is hereby acknowledged, the Mortgagor [BuyerCo/SellerCo] doth grant and mortgage unto the Mortgagee [Sun Life], its successors and assigns forever, ALL AND SINGULAR the Lands subject only to the Permitted Encumbrances.

where (by clause 1 (xiv)) ““Principal Amount” means the principal amount described in PART 1 of this mortgage [i.e., $2,100,000.00].”).

As and when the writings were signed, witnessed, sworn under oath and notarized, and delivered / registered, the payment and receipt clause was objectively and verifiably / categorically false. Sun Life had paid in fact no money (nor even assumed any liability), lawful or otherwise, to anyone, it did not concurrently do so, and it was expressly under no obligation to do so in the future (see mortgage clause 8.11 below). Nor did it ever do so in substance.[7] Sun Life’s management and its solicitors did not merely provide for the falsification of the timing or order of events – but of the substance of the transaction as well.

Also and conversely, as and when Sun Life took beneficial possession / registration and / or ownership of the mortgage security, it was the intent-in-fact of the owners of BuyerCo/SellerCo to honour the nominal security only on condition of a subsequent payment of (slightly less than) $2.1 million by Sun Life and / or the issuance and assumption of liability by Sun Life (i.e, even if they did not appreciate the difference at the time).

The security, however, sworn under oath and penalty of perjury, categorically denies the existence of that real and actual liability (and / or contingency) that was known-in-fact to the parties as and when signed and sworn. It then compounds or compounded the felony with the fictitious, false, and fraudulent receipt claiming / declaring / providing categorically that the reason behind such denial of liability / contingency is that the said liability / payment had already been made / performed. Those are two independent criminal acts and material acts of securities falsification.

An often quoted legal / judicial definition of a forgery is “a document that tells a lie about itself”[8] and the nominal registered mortgage here tells (at least) two separate and material lies about itself – (1) that it evidences an equity investment by Sun Life, and (2) that Sun Life did not obtain it by the assumption / issuance of liability.

More specifically, as and when the security was sworn, signed, notarized, and registered or delivered, it was an executory (yet to be performed (by Sun Life)) contract (and naked / unfunded debt instrument / security) falsely purporting on its face to evidence a (fully / certified and pre-funded) executed (already preformed (by the bank)) contract / security:

EXECUTED and EXECUTORY

2. So, a consideration for a promise may be executed or executory, according as the consideration precedes the promise or not ; and its character in this respect is determined by the relation which it bears in point of time to the promise, as being prior or subsequent [CONSIDERATION.] [9]

More generally, time is of the essence, and so therefore is order of events. As the Offer / Commitment Letter put it:

R. Time is of the essence. Time in all respects shall be of the essence herein.

If the nominal security were to expressly declare and disclose Sun Life’s liability-in-fact, then it would become obvious on the face of it that it is a contract of liability-assumption / reinsurance and not a money-lending transaction (i.e., not an equity-investment-in-fact).

It would also become obvious that the nominal security is a conditional promise to pay (by BuyerCo/SellerCo) and not an unconditional promise to pay. That alone (and / or any of the other fatal defects by themselves) is sufficient to define the nominal mortgage as a false document and forgery-in-law (Gaysek v. The Queen [1971] S.C.R. 888).

The result was that, among other things, the security, as and when registered, purported to evidence an unconditional promise to pay by BuyerCo/SellerCo, and expressly declared and / or presented to be certified or pre-funded by a payment of $2.1 million of lawful money of Canada paid by Sun Life to the issuer of the security as an equity investment, but which management and solicitors for Sun Life knew to be a conditional-promise-in-fact and not an unconditional promise.

They therefore also had to know (and knew in fact) that the mortgage as and when registered was a naked-debt-instrument that had not been pre-funded at all. In fact, the combined assets of BuyerCo/SellerCo had been, or were concurrently, pre-depleted.

As and when the mortgage is registered, Sun Life owns all the property, assets and titles, and BuyerCo/SellerCo become de facto empty shell-companies with zero-assets-in-fact, and / but legally owing $2.1 million plus interest, on the registered representation that they have at least a $2.1 million equity investment, when they have not, from the beneficiary of the security who (or whose solicitors) also prepares and provides the (written other-party-signature-ready) security. That is where and when an additional conversion (money-laundering) of the false receipt occurs.

In effect, or constructively, Sun Life provides for itself to be both the victim and beneficiary of the criminal act, and then keeps the proceeds of crime for itself, while concurrently claiming reimbursement for its (pretended) loss from BuyerCo/SellerCo (and then uses its gain to support a new unsecured liability to BuyerCo/SellerCo).

Notwithstanding the ignorance-in-fact of the owners of BuyerCo and SellerCo, on the facts, the constructive offer was that Sun Life would agree to receive and reinsure secured credit from BuyerCo/SellerCo, provided that BuyerCo/SellerCo would agree to the falsification of the securities to evidence an equity investment by Sun Life. This isn’t securities-fraud-rocket-science either.

So in addition to the fraud against BuyerCo and SellerCo by Sun Life (management and solicitors), it was also and independently a constructive / strict-liability criminal offence by BuyerCo, SellerCo, and Sun Life acting together / jointly to commit an independent fraud against the registrar and against the financial markets and the public generally.[10]

The alleged payment was not real, and so the parties could just as easily have made the amount $2.1 billion or $2.1 trillion or $2.1 quadrillion. The fact that they chose an otherwise plausible amount is evidence of mens rea in a court of criminal jurisdiction.

The material difference is that the human owners of BuyerCo and SellerCo were unwitting participants (constructive patsies, and equity-victims-in-fact).

To understand the monumental scope and scale of fraud involved, first consider what occurs at the moment the nominal security is registered in favour of Sun Life. As and when registered Sun Life obtains:

  1. BuyerCo/SellerCo’s unconditional indebtedness to Sun Life in the amount of $2.1 million.[11]
  2. BuyerCo/SellerCo’s unconditional liability to pay Sun Life interest of circa $13,500 per month on the amount of debt so assumed / underwritten.[12]
  3. BuyerCo/SellerCo’s unconditional liability to pay Sun Life another $2.1 million by stipulated instalments and (the balance) on the named Maturity Date(s), or On Demand.
  4. BuyerCo/SellerCo’s unconditional acknowledgment / receipt for having received a $2.1 million cash payment (lawful money of Canada) from Sun Life (i.e., a sworn and notarised $2.1 million cash (or cash-credit) withdrawal receipt).

The total thus far is $6.3 million in cash-equivalent / money assets to Sun Life.

At that moment, Sun Life had a minimum of $6.3 million in its corporate pocket than it had woken up with that morning (plus $46,000 in nominal loan fees (accounting-and-regulatory-capital-fraud-concealment fees) already received, plus legal title to the ($2.6 million mutually and independently appraised value) property from SellerCo).

But what does Sun Life owe to BuyerCo/SellerCo at that same moment of registration? That is provided for under the registered mortgage / security itself as follows (in material part, emphasis added):

8.11 The Borrower [BuyerCo/SellerCo] agrees that neither the execution nor registration of this mortgage …will oblige the Lender to advance any further money hereunder but the advance of money from time to time will be in the sole discretion of the Lender.

Stop. There.

At the moment of registration of the falsified security, Sun Life’s minimum $6.3 million gain is crystallized and capitalized, and Sun Life owns $6.3 million of cash-equivalent / money-assets and valuable securities[13] that it did not own the instant before.

And it expressly incurs no liability to BuyerCo/SellerCo or anyone else in exchange. The circuit is complete, and Sun Life obtains ownership of the assets unencumbered by any liabilities. The one-way ratcheting device goes click.

Bait and switch

The aggregate form may also be described as a bait and switch offer in respect of a confidence scheme. The bait is an apparent or quasi-binding obligation on the part of Sun Life (from the Application and Offer Letter):

…which offer, if accepted by the Lender as provided herein [i.e., together with payment of the $4,000 application fee, $42,000 commitment fee, and delivery and registration of the mortgage and other securities], shall constitute an agreement which shall bind the Borrower and the Lender with respect to the Loan.

The switch is in clause 8.11 of the Standard Mortgage Terms (MT900180):

8.11 The Borrower agrees that neither the execution nor registration of this mortgage nor the advance of some of the money secured by this mortgage will oblige the Lender to advance any further money hereunder but the advance of money from time to time will be in the sole discretion of the Lender.

The Application / Offer Letter states that the mortgage must be registered before the funds, if any, will be advanced, and the mortgage expressly negates any liability of Sun Life to make any advance, thus the nominal binding provision under the Application / Offer Letter is a practical nullity / illusory consideration as incapable of being given effect under any circumstances. It is simply a text-book example of a bait and switch.

The nominal agreement defined by the two writings combined (Application / Offer Letter and Mortgage – and ignoring, for the moment, the apparently false claim of prior funds delivery) is that Sun Life agrees that it shall be bound to make the advance of $2.1 million provided that BuyerCo pays it a $4,000 processing fee, a $42,000 commitment fee, and concurrently agrees that Sun Life is not bound to make any advance, (and / or that / because Sun Life had already made the advance).

Also note the inherent ambiguity / impossibility defined by the two writings together. The Application / Offer Letter states that the potential advance will be issued under the Mortgage, but then the subsequent Mortgage states just as categorically that the Loan had already been made pursuant to the Application / Offer Letter:

1.20. “Sun Life Loan” means that loan of $2,100,000.00 made by Sun Life [past tense] …pursuant to a commitment letter issued by Sun Life dated 19 December 1996.

The Application / Offer (Commitment) Letter states that there will be no advance unless and until the mortgage is registered:

The Loan Amount shall be disbursed, subject to satisfaction of each of the following conditions at the time of the disbursement,: …all documentation and matters…including the registration of the Mortgage, have been completed.

But then, again, the mortgage, as and when executed by the owner of BuyerCo and registered / given over to Sun Life, states just as categorically that the $2.1 million loan is a past event – something that had already occurred (and which in fact had not occurred). The Offer / Application Letter was autographed / signed by the owner of BuyerCo on (or about) December 21, 1996 and returned to Sun Life along with the fees. The mortgage was registered on January 31, 1997, but the nominal advance was not made (even in part) until February 1, 1997.

Thus Sun Life’s documentary advance / consideration never occurs. It is either in the past or in the future but never exists in the present, and the temporal sleight of hand is apparently not an accident or oversight (i.e., it would be, in a criminal proceeding, prima facie evidence of mens rea on the part of the author-in-fact of the two writings – see R. v. Olan et al., (1978), 41 C.C.C. (2d) 145, 86 D.L.R. (3d) 212, [1978] 2 S.C.R. 1175). The evasiveness and awkwardness of the wording “which shall bind…the Lender with respect to the loan…” would also be prima facie evidence in a Court of criminal jurisdiction that the author-in-fact knew that they were committing a fraud – it was not an accident or an oversight or merely a poor choice of words.

In order for Sun Life to use the mortgage itself as its funding source for the loan proceeds, the writing must appear to be an unconditional promise by BuyerCo/SellerCo to pay SUN LIFE $2,100,000.00 and be validated by an acknowledgment of executed or executory consideration by Sun Life. This is accomplished by the combination of clause 1.15 and clause 3.1:

1.15 The “Principal Sum” is the principal amount [$2,100,000.00] shown in Item 5(a) of the Mortgage Form…

PAYMENT

3.1 The Borrower agrees to pay to the Lender the Principal Sum [$2.1 million] and Other Money with interest at the Interest Rate, calculated semi-annually, not in advance, both before and after default or maturity and compound interest….

and by the definition of “Sun Life Loan” under 1.20:

1.20. “Sun Life Loan” means that loan of $2,100,000.00 made by Sun Life … pursuant to a commitment letter issued by Sun Life dated 19 December 1996.

By presenting the “Sun Life Loan” as a past event, Sun Life makes the Mortgage (falsely) appear to evidence an executed consideration by Sun Life (and therefore an unconditional liability of BuyerCo/SellerCo).

The provision (under 3.1) that “The Borrower agrees to pay to the Lender the Principal Sum and Other Money…” is an unequivocal advance of credit by BuyerCo/SellerCo to Sun Life and which credit is secured by the real estate property.

As and when the mortgage is registered, BuyerCo/SellerCo have advanced a minimum of $2.1 million of secured credit to Sun Life, while the security itself states precisely the opposite – that Sun Life has already paid $2.1 million of lawful money of Canada to BuyerCo/SellerCo. The difference is a minimum of $4.2 million in favour of Sun Life, and Sun Life now also holds title to the $2.6 million property. What a racket!

Sun Life did later assume a net circa $2.05 million liability to BuyerCo/SellerCo, by issuing it / them costless-to-produce substitutes for currency (unsecured deposit credits to evidence Sun Life’s indebtedness to the account holder), but that was technically a gratuitous act (not required by the contract)[14] to disguise and obfuscate the fact that it is also participating in a ponzi-and-kiting scheme. And / or to obfuscate the fact that the false payment and receipt obtained by Sun Life was false as and when it was obtained and converted.[15]

The nominal whole-transaction was comprised of two objectively irrational acts in succession. The first is the nominal-borrower (lead-underwriter-in-fact) giving the bank a $2.1 million cash receipt when nothing had been paid or received in fact, and the second is the bank making an actual advance (issuing / reinsuring the liability)[16] of (slightly less than) $2.1 million when it is in de facto possession of a registered security evidencing that it had already done so. In theory a cross-examination on the witness stand would go something like this:

Prosecutor: Mr. Smith, as an employee and teller of the bank, did you pay $2.1 million to the account of BuyerCo/SellerCo on February 1, 1997?

Mr. Smith: Yes I did.

Prosecutor: And were you at that time in possession, or with knowledge, of a registered security dated January 30, 1997 under which it was sworn under oath and penalty of perjury that the bank had already paid the said $2.1 million to BuyerCo/SellerCo?

Mr. Smith: Yes.

Prosecutor: Then why did you – as far as you knew – choose to pay another $2.1 million into the account?

Mr. Smith: Because everyone at the bank knew that the sworn receipt was false.

Oooops!

Sun Life could theoretically make more absolute profit or gain in any given case, by choosing not to make the nominal loan or reissue the liability, but the victim would scream the proverbial bloody murder and draw attention to the fraud. So to keep it going, Sun Life management will virtually always choose to reissue the liability even though they don’t have to under the nominal contract (and notwithstanding that management is generally brain-dead (or wilfully-blind) to the multiple prima facie crimes they are committing (or rather they are suffering from cogno-linguistically-induced diminished capacity as discussed in Part 1 and Part 2)).

It is a variation on the promissory-note-device. As and when the mortgage is registered, BuyerCo/SellerCo are unconditionally-indebted to Sun Life in the amount of $2.1 million, with another $2.1 million due by instalments or effectively “On Demand”. If Sun Life were to demand payment the next day, then, under the express terms of the security, the debt secured would increase to $4.2 million if BuyerCo/SellerCo defaulted (i.e., they would owe the $2.1 million never received, plus the $2.1 million due On Demand).

But Sun Life’s lawyers would never attempt to claim for it because it would expose the foundational fraud inherent to the nominal or pretended transaction. Instead they would constructively abandon the underwriting credit / debt, and sue only for the additional payment that becomes due on demand / default.

The crime regardless, or one (especially obvious) among several, is the passing or conveying of ownership rights in securities by means or modes of chance (“[With anything in return]…at the sole discretion of [Sun Life]”), and it is complete as and when the property is transferred or exchanged. It is also a money-laundering offence. A contract to transfer property rights where the receiving party may or may not give anything in return is not a genuine commercial contract but a constructive wager at best.

By direct analogy, assume that you intend to order and purchase a new car from a dealership, and you notice that the sales contract states that you agree that you owe the dealership the purchase price of the car even if the dealership (management / owners) changes its mind or otherwise fails to deliver the car. You ask about it, and the sales agent replies to the effect: “Oh that is just a technicality. Don’t worry about it. We actually intend to deliver the car, but we are also able to make additional profits (and actually pay for the car ourselves from the manufacturer) from your act of exposing yourself to the potential loss, by capitalizing your assumption of the liability for it to our account. Also, please sign here that we have already delivered the car.”

There is something about credit contracts, especially, that makes people literally stupid (i.e., puts them into a stupor) such that they do not question even the most prima facie criminal provisions in favour of the nominal creditor.

Regardless, to successfully pull it off (and / or to maximize its value to the financial markets), the registered security has to make two independent false representations / declarations: (1) that Sun Life made an equity investment to obtain it, and (2) that Sun Life did not obtain it by the issuance of liability.

Normally, Sun Life would have obtained most (but not all) of the same property and securities by transferring its agreement that it owes $2.1 million to BuyerCo so as to then agree that it owes $2.1 million to SellerCo instead. In this case, however, Sun Life obtained possession and alleged ownership of the same property and all of the assets and titles from both sides (total circa $10 million) in exchange for nothing at all – not even its bare agreement that it owes anything to anyone.

The transaction was accordingly a constructive fraud on the face of it with or without the conscious intent of anyone. Even the 100% owner / sole-shareholder of a corporation cannot simply give away (or put at gratuitous risk of loss) the assets of the corporation (R. v. Olan et al.[1978] S.C.C., R. v. Marquardt (1972)).

Assume that an official bank examiner were to arrive at close of business and registration of the mortgage on January 31,1997, the day after the alleged loan, to examine the accounts of Sun Life in respect of this nominal transaction. The bank examiner would discover that at least $2.1 million of the bank’s current assets are directly accounted for by, and reliant upon (i.e., as a receipt for), the $2.1 million of lawful money of Canada that Sun Life had purportedly paid, loaned and delivered to BuyerCo/SellerCo. That is, relatively speaking, there is $2.1 million missing from the vault, but it is apparently ok because the certified cash receipt from BuyerCo/SellerCo is there in its stead and to account for it.

The bank examiner then goes to BuyerCo/SellerCo and discovers that they have combined assets of zero.

The questions / issues that immediately arise are:

  1. What happened to the $2.1 million of lawful money of Canada that is sworn to have been paid by Sun Life and received by BuyerCo/SellerCo as a direct equity investment from Sun Life? Did the principals of BuyerCo/SellerCo effectively abscond with it? Did an employee at Sun Life accidentally or otherwise pay it to the wrong account? Is there a security risk to Sun Life from an organised effort from within or without to hijack several days worth of payments enterprise-wide and then abscond with up to several hundred million dollars?; It is clearly critical that we find out – and quickly – what happened to that money; and
  2. What happened to the $10 million of broadly-defined assets that had been owned by BuyerCo/SellerCo the day before?

To help us answer those questions, in 1967 the (Alberta) Court of Appeal, below, directly addressed the system employed by the chartered banks and the Alberta Treasury Branches, but which applies equally in theory and practice to all members (including Sun Life) of the Canadian Payments Association (CPA):

The chartered banks in Canada issue obligations, namely, deposit liabilities, which are generally accepted as means of payment in Canada although they do not have the status of legal tender. In like manner the treasury branches create deposit liabilities. These deposit liabilities are a form of book debt owing by the bank to the customer and in most cases, including the treasury branches, are subject to transfer by cheque. These payments by cheque provide the means of settlement of a large percentage of the transactions of Canada. Likewise, the treasury branches’ deposit liabilities furnish their customers with a similar means of making settlement of transactions by orders drawn on the treasury branches because the treasury branches have been able to persuade the public to regard their deposit liabilities or promises to pay[17] as the equivalent of legal tender by undertaking to convert them into legal tender on demand. These deposit liabilities are used by the customers of the bank or treasury branch which created them as a substitute for currency. (Breckinridge Speedway v. R [The Crown] (1967) 63 W.W.R. 257)

To appreciate what it means, merely note that if you substitute the words “counterfeit-money” or “kited liabilities” for “deposit liabilities”, then there is precisely no change in the meaning. All that would be required logically would be to also change the words “persuade the public” to read “deceive the public”.

Essentially the appellate Court in 1967 constructively looked the other way on the fraudulent / unjust-enrichment substance or object of nominal banking-in-Canada.

Over the ensuing fifty years, the owners and management of the financial system have slowly concluded therefore that it does not matter that they are also seen to obtain that criminal object by criminal means.

In this particular case, Sun Life’s liabilities (substitutes for currency) (eventually, but not as and when the security was registered) increased (whether contractually or gratuitously) by slightly less than $2.1 million, and its cash-equivalent / money assets increased by a minimum of $6.3 million as a de facto premium for insuring the default risk, in favour of SellerCo, of the minimum $2.1 million of secured underwriting-credit that Sun Life had first received directly from BuyerCo/SellerCo.

Now assume that someone (perhaps even the bank examiner) had then called the police (Commercial Crime division) and that the police had arrived as and when (or shortly after) the sworn and notarized mortgage was registered. What would they find?

They would find from an examination of Sun Life’s general ledger and balance sheet that Sun Life had received and is in possession of (at least) $6.3 million in cash-equivalent / money-assets from BuyerCo and SellerCo., and legal title to the $2.6 million property from SellerCo.

They would also discover a registered security at the Land Title Office purporting to evidence the same transaction and which claims categorically that Sun Life had paid / invested $2.1 million in “lawful money of Canada” to BuyerCo/SellerCo to obtain it, but with no evidence on its balance sheet or general ledger (other than the false receipts) to support any such payment (i.e., again, because no such payment had been made in fact).

They would also discover that at this instant substantially all of the assets previously owned by BuyerCo and SellerCo combined have been transferred to Sun Life, in exchange for no consideration in fact, and expressly no contractual obligation (in fact an express positive disavowal) of Sun Life to provide anything in return.[18]

The object of the constructive-conspiracy was to induce BuyerCo and SellerCo to convey the legal right of property in substantially all of their assets (circa $10 million) to Sun Life, in exchange for no legal obligation from Sun Life, to facilitate Sun Life to treat its acquisition of the said assets as payment for a wager (or more precisely the entry fee in a lottery-of-one where either you win the prize or you don’t). And it was prima facie a successful conspiracy.

At close of business on January 29, 1997, BuyerCo and SellerCo had combined broadly-defined assets (including actual and potential business cash flow and qualified-commercial-underwriting-capacity) of about $10 million, including near clear-title to the $2.6 million building and land. And no significant (or at least no material) liabilities.[19]

(More sophisticated readers may note that the transaction may be characterized as a tax-based accounting fraud as well. Sun Life’s acquisition of the property (real estate / and / or the security as chattel) was held out as a quasi-loan-fee in exchange for the bare chance of obtaining an advance of credit, but which is / are passed off for tax purposes as unrealised capital gains to avoid any tax liability. Although, here again, it is not strictly necessary under the criminal law to go any further than the illegal offer letter or the false receipt in the mortgage.)

At close of business on January 31, 1997, 48-hours later, BuyerCo and SellerCo had combined broadly-defined assets of zero ($0)!!!, and liabilities and potential liabilities[20] to Sun Life of about $10 million!!![21]

BuyerCo’s and SellerCo’s net financial worth had thus objectively declined by $20 million. Their combined status was essentially flipped from $10 million in assets and no liabilities, to $10 million in liabilities and no assets.

Conversely, at close of business on January 31, 1997, Sun Life otherwise owned and possessed the circa $10 million of assets that had belonged to BuyerCo and SellerCo 48-hours earlier.

At close of business on January 31, 1997, Sun Life had expressly no contractual liability or potential liability to BuyerCo and / or SellerCo to provide any form of payment or to provide any consideration – or anything at all.

Sun Life’s net financial worth, with respect to this transaction, has objectively increased by $10 million.

Here again: Stop. There.

At this point the commercial-crime detective demands of the (alleged / pretended) banker: “Let’s start at the beginning. First, where did you get the $2.1 million of lawful money of Canada that is sworn to have been paid to and invested in BuyerCo/SellerCo by Sun Life?”

And of the principals / owners of BuyerCo/SellerCo: “Where is the $2.1 million of lawful money of Canada that you swore under oath to have received from Sun Life?”

And the only answer that the pretended banker can give is: “There was in fact no such payment or investment. We just provided for the falsification of the security to facilitate the further fraudulent juicing of our balance sheet. We do so by passing off the bare issuance of a new and unsecured / unfunded liability as the equity investment of a pre-existing asset.

We then account-in-substance for our acquisition of possession and legal ownership of the new assets as a reinsurance premium received in exchange for our (constructive and actual, but contractually-denied) (eventual) assumption of (unsecured) liability to the nominal debtor, which (unsecured) liability may or may not then be assigned by cheque to the vendor and / or assignee of the vendor (normally it is, but not in this case (until it was reassigned-in-part) to discharge the renovation expenditures)).

However, that leaves an equity credit due by us to the lead-underwriter who otherwise gratuitously accepts and underwrites the liability, and so we charge that off as a constructive entry fee for the constructive wager that the nominal debtor makes by transferring all of their assets in exchange for no contractual certainty of receiving anything in return.

It is a variation on the carny-level-con-game where the entry fee is greater than the value of the potential prize. We just take it to the ultimate level where the prize is that we agree to receive, recognise and reinsure the lead-underwriters’ secured credit to us, provided that they first pay us the entry fee (premium) of transferring all of their property to us under the pretence of security. All we are doing in substance is selling access to the domestic and international financial exchange system that we own and control and have obtained by criminal means.”

“Our foundational business model is the same as all the other pretended banks in the system, and it is always spelled out directly and / or indirectly in our contracts:

Unconditionally agree that you owe us this amount ($X), then unconditionally legally-convey all of your related present property, plus an assignment of this specified amount of your future earnings, to us, and then we will decide how much, if any, we will agree that we owe you in return.”

They all provide for the same result, and it is equally criminal and wrongful (malum in se) for a money-lender as it is for a credit reinsurer. Again, it is the Godfather’s Offer / Business Model:

Don Banker: First, as a sign of your respect, I want you to legally sign over to me everything that you own. And then I will decide how much, if anything, that I will give you in return. It’s a good deal. It’s an offer you can’t refuse.

Sun Life’s solicitors actually did a relatively decent job of obfuscating the naked transfer of assets and wagering format. Most nominal financial institutions, such as VanCity for example, spell it out in no uncertain terms (i.e., under a single provision instead of two):

NO OBLIGATION TO ADVANCE – The Member acknowledges and agrees that neither the execution of this Creditline Agreement nor execution and delivery of any security shall bind VanCity to advance or re-advance any unadvanced portion thereof, but nevertheless the estate conveyed to VanCity by any security shall take effect upon the execution and delivery of such security.

The nominal security says what it means, and it means what it says. It is an unequivocal wager or game-of-chance hiding in plain sight as a pretended business custom.

All that matters under the criminal law is that the nominal or pretended borrower is required to deliver something of value to the bank, and that the bank is expressly not required to give anything in return. 

The nominal debtor agrees unconditionally that they owe the bank $X, all the property rights (the estate) is / are legally transferred to the bank, and then, and only then, will the bank (management) make a decision on whether, and how much, that the bank will agree that it owes in return for the property (i.e., property means or includes both the real estate (title) and the right of property in the mortgage (as a separate security / chattel from the real estate)).

Prima facie, the foundational business model of the private Canadian financial system is racketeering. It is not like racketeering – it is racketeering.

The Bank of Montreal, on the other hand, prefers what I call the Petulant Child Technique (to complete the bait and switch).

The bank (management and solicitors) first (and illegally) holds out or passes off the bank’s bare agreement to loan as a separate or distinct service (contrary to GAAP and to s. 347 (and / or 206(1)(a)) of the Criminal Code) so as to obtain the nominal borrower’s undertaking of liability:

2 (1) In return for the Lender’s agreeing to lend the Principal Amount to the Borrower, the Borrower grants and mortgages the Land to the Lender as security for payment of the Mortgage Money and the fulfillment of all the Borrower’s other promises and agreements as set out in This Mortgage until the Borrower has performed all the Borrower’s obligations under This Mortgage.

At this point the nominal borrower has unequivocally advanced secured-credit to the bank and is liable to pay it the defined amount of Mortgage Money. The bank then (with the aid of its solicitors) completes the bait and switch with the petulant child clause:

(14) Whether or not:

(c) the Lender has advanced to the Borrower part of the Principal Amount, the Lender does not have to advance the Principal Amount or the rest or any further part of the Principal Amount to the Borrower unless the Lender wants to [So there! – Nah!].

“Unless the Lender wants to” is more childish / petulant, but has the same meaning and result in law as “at the sole discretion of the Lender”.

The Canadian system is just one big asset-harvesting mechanism / machine via the wagering / racketeering device. It is the essence of hiding in plain sight – the absolute normalization-of-fraud, forgery, and wagering / racketeering.

Nominal loan fees

In this case the entry-fee-in-part (in addition to the property and mortgage and other nominal securities themselves) was $46,000 that BuyerCo was required to pay up front to Sun Life as a nominal Loan Processing Fee ($4,000), and a nominal Commitment Fee ($42,000), expressly in exchange for the bare chance, and not the contractual certainty, of receiving anything in return (“Notwithstanding the execution and registration of this mortgage [and / or payment of the fees already made]…the advance of money from time to time shall be at the sole discretion of [Sun Life]”. Although, to be fair here too, a “Fraud-against-federal-securities-law-concealment-fee” is awkward and difficult to print on an application form. (Both fees were paid in advance from BuyerCo’s own funds and not deducted).

Fee: A non-refundable loan processing fee of $4,000.00 is payable on the Lender’s acceptance of this offer and may be deducted at the Lender’s option from any disbursement of the Loan Amount.

First, and regardless, the transaction is prima facie illegal as a wager (or more precisely an ante to get into the game / wager). It is just plain stupid and no competent solicitor would provide for it. The Loan Processing Fee also constitutes an independent act of fraud (bait and switch) because of the “No obligation to advance” clause in the registered mortgage.

Second, the offer itself is prima facie contrary to s. 206(1)(a) of the Criminal Code which makes indictable (felony) any one who (in material part, emphasis added):

…makes…or procures to be made…any proposal, scheme or plan for advancing, [or] lending…by…any mode of chance whatever [“at the sole discretion of the Lender”].

And, third, it is independently an offence (two counts) against ss. 347(1)(b) (receipt of [or intent / solicitation to receive] a payment or partial payment of interest [$4,000, $42,000] at a criminal [infinite] rate).[22]

So the solicitors who came up with this business model and drafted the broadly-defined securities and collateral documentation were at least clearly and criminally negligent.

The entire package is a study in criminal-law-violations; and applied for illegal gain / unjust enrichment in fact. They’re not just technicalities.

In most basic terms, the writing expressly declares itself to evidence an equitable transaction – a quid pro quo or exchange of something for something (else) (and of more or less equal value / cost to both parties), when in fact one side of it is a wholly fictitious payment / transaction intended-in-fact to conceal or to otherwise obfuscate a naked transfer of assets in exchange for the bare chance of receiving something in return.

The false receipt is not merely an essential and material element in a financial fraud, but also serves independently to conceal the fact that the real transaction (as nominally structured) is a wager in fact and in law; so as to further conceal its substance as credit reinsurance while passing-it-off as money-lending.

It’s a great way to boost accounting profits and growth rates, but it’s completely unlawful (malum in se or evil / wrongful-of-itself), and it’s completely illegal.

Application Fee / Loan Processing Fee

The $4,000 nominal Application Fee (subsequently elsewhere also referred to as a “Loan Processing Fee”[23]) and the $42,000 nominal “Commitment Fee” was / were directly and unambiguously contrary to and evidence of an offence to s. 206(1)(a) of the Criminal Code.

By express terms, they were entry fees or Application Fees for the bare possibility of obtaining a loan or advance of credit as an award or prize subject to a chance (uncertain) event to be decided “in the sole discretion” of Sun Life (management) after receipt of payment of the fee.

Here again, s. 206(1)(a) provides (in material part, emphasis added):

206 (1) Every one is guilty of an indictable offence and liable to imprisonment for a term not exceeding two years who

(a) makes, prints, advertises or publishes, or causes or procures to be made, printed, advertised or published, any proposal, scheme or plan for advancing, lending, giving, selling or in any way disposing of any property by lots, cards, tickets or any mode of chance whatever;

The most direct construction is:

206 (1) Every one is guilty of an indictable offence…who (a) makes… or causes or procures to be made,… any proposal… for advancing, [or] lending… by…any mode of chance whatever;

The most immediate and legitimate and appropriate question which could be put to the solicitors and management for Sun Life at their own criminal trial would be to the effect: “Well what did you think it meant?

And, merely to point out the fact of it, at an average of about $400 per robbery, an ordinary “natural-person in law” or one of the little people would have to successfully rob in excess of 100 convenience stores, for example, and at the risk of up to 1,400 years in prison, to obtain $46,000 in violation of the criminal law.

Also bear in mind that the criminal law expressly recognises that there is a difference between loans or “lending” and advancing credit or “advancing”. All of what follows is already egregiously fraudulent even if limited to lenders who are lending actual existing already-earned money.

But where (as in the present case) they are merely reinsuring by flipping the assets / securities (purported evidentiary instruments and falsified cash receipts obtained from the pretended borrowers but who are the lead-underwriters or creditors-in-fact / equity) then the fraud and unjust enrichment of the owners of the institutional middlemen becomes simply breathtaking.

It is just the utter contempt of these people for the criminal law, or any law.

You pay $46,000 up front, for the bare chance to obtain something of alleged or purported value, “at the sole discretion of” the party receiving the $46,000.

Then the thing of alleged or apparent value is the nominal-service of accepting or allowing you to agree that you owe them $2.1 million, provided also that you agree to nominally secure your agreement by transferring the legal title to everything you own to them.

And then, and only then, will they decide whether to give you anything in return.

On ss. 206(1)(a) of the Criminal Code of Canada

History records and evidences that people can be induced into doing all manner of inequitable or wrongful things by the prospect of obtaining a loan or credit in return. For that reason (and many others) even legitimate lenders are theoretically only allowed to make or sell loans or advances, per se, and not their nominal agreement to make the loan or to advance credit.

“A man shall not have interest for his money and a collateral advantage besides for the loan of it…” – Jennings v. Ward [1705] 2 Vern. 520, 18 R.C. 365

Every benefit taken indirectly by a creditor, for the granting of which no impulsive cause appears but the money lent, will be voided as extorted. (Principles of equity: Kames, Henry Home, Lord, 1696-1782).

Even the ancient Romans recognised the holding out of a loan – and the agreement to make it – as separate considerations as a constructive act of extortion,[24] and a compounded offence or wrong where it is also concealed by splitting the aggregate agreement into separate documents (see for example Principles of equity: Kames, Henry Home, Lord, 1696-1782, especially SECT. IV. Fraud, deceit, or other artificial means, employ’d for making a man act un∣knowingly against his interest.).

They also recognised it as a fraudulent act by the lenders or creditors against all other creditors and potential lenders of the same borrower as and when it was done. It is extortion because the lender is requiring the borrower to assist the lender in committing a fraud against any other creditors or potential creditors of the debtor by falsely agreeing that the lender has loaned him more than they actually had.

So holding out or passing off the nominal lender’s bare agreement to make a loan as a separate or distinct service from the loan itself is already an objectively fraudulent and (increasingly/cumulatively) dangerous act.

Subsection 206(1)(a) technically addresses an escalation or more-wrongful-form of that wrongful act, and that is where the potential creditor or lender substitutes its bare agreement that it will make a loan (or reinsure credit) for its bare agreement that it might make a loan (or advance / reinsure credit (and notwithstanding that they almost never admit or acknowledge that they are advancing credit (reinsurance) and almost always pretend to be lenders making loans.))

It is already wrongful and technically illegal for a lender to offer: Pay me a $4,000 non-refundable Application Fee and I will make a loan to you.

But it is an aggravated offence or compounded felony to offer: Pay me a $4,000 non-refundable Application Fee and I might make a loan to you, subject to my sole discretion.

It is a simple question in law: Is it legal to solicit and receive a payment or payments of $46,000 from a party in exchange for eligibility to receive an award of a $2.1 million loan “in the sole discretion” of the party making the offer and receiving the $46,000?

Obviously not. It is such an elementary principle that no competent solicitor would fail to see its manifest illegality and criminal substance.

In substance the Offer Letter issued by Sun Life reduces to:

Give me something of value up front, and maybe I will give you something of value in return, and maybe I won’t.

If the offeree accepts, then a wager or lottery is created in fact and in law (i.e., with or without ss. 206(1)(a)).

The essential wrongful / criminal act is that the party making or soliciting the prohibited proposal, scheme or plan, acquires, or can acquire, possession or otherwise legal ownership of money or other financial assets in exchange for no consideration in fact (a fictitious or illusory consideration).

If John or Jane Smith runs an ad in the newspaper offering the public the chance to obtain – “at the sole discretion of the offeror” – a loan of $2.1 million upon payment of an entry or application fee of $4,000, or $42,000 (or even just $10), then they would be prosecuted for a violation of the criminal law.

This particular criminal law may seem awkward or at slight variance with the norm or otherwise cause cognitive dissonance because it does not directly address the issue of the accused receiving entry fees or anything else as an essential element of the offence.

It merely broadly makes indictable (felony) the making (or soliciting) of the offer even if no entry fee is demanded or received. The reason for same was so that the party making the offer could be arrested and prosecuted upon making or soliciting the prohibited offer and without the Crown having to prove any specific victims or other terms.

Just like and for the same reasons that it is a criminal offence to offer heroin or cocaine for sale to the public, regardless of whether specific prices or other terms are included.

The Crown was legally obligated to arrest and prosecute management of Sun Life (and its solicitors) the moment Sun Life transmitted the Offer Letter to BuyerCo/SellerCo.

For the typical observer, the essence of the offence is: Pay me some money now, and you might obtain a loan or advance of credit in return, but that uncertain event cannot be determined until you pay me the money to find out. It is that device that is prohibited under s. 206(1)(a).

Sun Life’s solicitors do not seem to understand or appreciate the difference between the legality (or lack thereof) of an object or objective, and the means by which it is obtained. Here again, the principle should be seared into everyone’s consciousness:

One must not confuse the object of a conspiracy [to defraud or to otherwise unlawfully obtain something for nothing] with the means by which it is intended to be carried out. Scott v. Metropolitan Police Commissioner [1974] 60 Cr. App. R. 124 H.L.

It is as if the solicitors and the bankers have become intoxicated on systemic unjust enrichment. They are so used to getting a free-ride and something-for-nothing that they can no longer grasp the concept of a wrongful and criminal act.

If these broadly-defined corporate solicitors are genuinely advising their client(s) that the way to boost profits is to put its agreements / contracts into the form of a gratuitous transfer of property coupled with a wager or other device under which legal rights of property in money and / or registered financial securities are determined by materially uncertain future events, then those solicitors are dangerously and criminally incompetent.

And as per the decision of the judges of the House of Lords in ratifying the decision of the judges of the Supreme Court of Canada in BANKING SERVICE CORP. Ltd. v. TORONTO FINANCE CORP. Ltd. et al. [1928] (in material part, emphasis added):

LORD BUCKMASTER:-Their Lordships do not think it is necessary to call upon the respondents in this case, for, having heard the matter fully argued, they are of opinion that the appeal must fail.

It might have been possible, as no agreement was entered into, that even after the original proposal the two heads could have been separated, and two independent agreements might have been prepared…, but that is not, in fact, what was done.

In the present case, there was no way or means by which the employees and other agents for Sun Life could have achieved their unearned / unjust-enrichment result legally, but even if there had been, it was in fact obtained by illegal and criminal means, and in several different and independent ways.

All of the money and securities received by Sun Life was under and pursuant to the nominal Offer Letter that is directly contrary to ss. 206(1)(a). There is even an express joinder between the two via the definition provided in the registered mortgage:

1.20. “Sun Life Loan” means that loan of $2,100,000.00 made by Sun Life [past tense] to [BuyerCo/SellerCo] pursuant to a commitment letter issued by Sun Life dated 19 December 1996

The mortgage refers to it as the “commitment letter” because the same offer required the additional payment of the $42,000 Commitment Fee that was to follow the $4,000 Application / Loan Processing Fee.

Because the nominal arrangement was in the form of a wager (and / or regardless contrary to ss. 206(1)(a)) and / or s. 347 and / or s. 380), Sun Life as holding vessel had no capacity to receive any of the broadly-defined financial assets (total circa $10 million in the BuyerCo nominal transaction) in its own right and the constructive trusts were established as and when those assets were received by Sun Life on that basis alone.

To be clear on this point, the criminal offence by the employees of Sun Life (under 206(1)(a)) was complete upon their making / transmission of the offer or proposal to BuyerCo/SellerCo via the Offer Letter, but the trust in favour of BuyerCo/SellerCo did not arise until BuyerCo paid the first $4,000 to Sun Life.

And the transaction cannot be saved by the clever device employed by Sun Life’s solicitors of putting the agreement into the form of an offer being made by BuyerCo/SellerCo to Sun Life. Section 206(1)(a) directly anticipates same by the words:

makes…or causes or procures to be made,… any proposal… for advancing, [or] lending… by…any mode of chance whatever

So inducing the target to make the offer to yourself is still an offence under the criminal law.

In total, the whole arrangement was void from the outset due to the wagering element or format and / or the multiple violations of the criminal law.

The reason I am spending so much time and effort on the $46,000 of nominal loan fees is that it demonstrates the pathological nature of the bankers’ (and their solicitors’) actions.

The bankers essentially and gratuitously obtained about $10 million in cash-equivalent-money-assets through the objective violation of about a dozen criminal / racketeering offences.

But they and their solicitors then chose to so violate about another dozen domestic and international criminal / racketeering offences for the sake of an additional lousy $46,000. A rational / sane criminal would not do that. Only a pathological obsessive / compulsive mentally-unstable criminal would do that.[25]

And the company’s entire management compensation and bonus arrangements become prima facie acts of laundering of proceeds of crime (money-laundering). They already are anyway, but the illegal ante-fees make it obvious.

Sun Life and the rest of the private financial institutions channel literally billions of dollars to broadly-defined management bonuses, and the source-in-fact of such bonus-money-in-fact is the systematic falsification of financial securities by said management and their solicitors.

Pirate flags

Then, the solicitors dealt with the known criminal offences via nominal provisions or disclaimers that appear to have been drafted by cartoon-villains.

NOTWITHSTANDING the provisions of any Statute [any lawful Act of Parliament or of the provincial Legislatures] relating to the rate of interest payable by debtors [e.g., s. 347 of the Criminal Code, s. 462.31(1) of the Criminal Code, s. 2 of the Interest Act, s. 6 of the Interest Act, s. 8 of the Interest Act, GAAP, IFRS, Bank Act, Trust and Loan Companies Act, federal Insurance Companies Act, etc., etc., etc.] this contract [and security] shall remain in full force and effect whatever the rate of interest received or demanded by [Sun Life].

4.3 If the Interest Rate stipulated herein [7.75%] would, except for this clause, be a criminal rate or void for uncertainty or unenforceable for any other reason, then the interest rate chargeable on the credit advanced or secured by this mortgage will be ONE (1.00%) percent per annum less than the rate which would be a criminal interest rate calculated in accordance with generally accepted actuarial practices and principles [i.e., 60% – 1% = 59% per annum[26]].

And all under a constructive black flag / pirate flag (either of the above disclaimers or quasi-disclaimers) announcing and declaring and warning that the parties intend to (and thereunder do) violate the criminal law, and that the contract shall stand regardless of its illegality.

NOTWITHSTANDING [the criminal law]…this contract and security remains in full force and effect. [and / or the criminal-interest-rate / or-any-other-reason provision directly in the mortgage – the NOTWITHSTANDING provision was in the Personal Guarantees that were demanded later.]

It is also a constructive notice and declaration that the parties do not recognise the authority of the Crown Courts; and which itself is a de facto declaration of legal superiority to the Crown and its converse that the Crown is subordinate to the (pretended) bank.

A declaration in a contract that the parties intend to violate or ignore the criminal law is illegal as an offence against (or in contempt of) the legislative arm of the Crown, while an actual or constructive declaration that the contract is outside the jurisdiction of the Courts is illegal as offensive to (or in contempt of) the judicial arm of the Crown. Just to be clear on the specific construction that holds the contract outside of the Court’s jurisdiction:

4.3 If the Interest Rate stipulated herein [7.75%] would, except for this clause, be…unenforceable for any…reason, [e.g., a court order to the contrary] then [the contract remains otherwise valid, and] the interest rate chargeable on the credit advanced or secured by this mortgage will be ONE (1.00%) percent per annum less than the rate which would be a criminal interest rate calculated in accordance with generally accepted actuarial practices and principles [i.e., 60% – 1% = 59% per annum].

It is the same form as a provision to the effect that “If a Court rules that this contract is unenforceable, then the borrower agrees that it remains valid anyway, and that the rate of interest is doubled.” In addition to its multi-layered criminality, it is a threat against the nominal borrower not to go to the law or to the Courts for protection.

Here again, by existing objective medical / psychiatric standards, the solicitors who provided for it really are legally, clinically, and criminally insane.

BuyerCo’s answer

And the only answer that the principal of BuyerCo can give is: “There was in fact no such payment. Sun Life’s solicitors simply made it a condition of the purported transaction that I swear the security under oath and that it was routine. The only material terms that I read before signing were the stated principal amount, the payment amount, and the stated interest rate. I trusted and relied upon my own solicitors / lawyers to vet the securities, but instead, by negligence or otherwise, they aided and abetted the fraud and false documents prepared by Sun Life’s solicitors. I was also required to pay the solicitors, including also Sun Life’s solicitors, an aggregate / total of about $16,000 for the objective preparation of legal forgeries.”[27]

The business investment proposal was to provide the funds / liquidity (in part) for BuyerCo to purchase and convert / renovate the residential apartment building into an extended-stay hotel business. Metaphorically at least, management for Sun Life attended the first meeting of the potential investors, and verbally agreed to assume the liability for the purchase price of the building to SellerCo in case the business venture were unsuccessful. For this service it demanded to be paid up front a premium of at least $4.2 million in the form of legal title to the property from SellerCo, and a promissory note and mortgage from BuyerCo and SellerCo as covenantors or co-debtors.

And BuyerCo and SellerCo also had to agree to invest the proceeds of the reinsurance (in part) into the renovation and conversion / upgrade of the building which was now / henceforth beneficially owned by Sun Life. They (Sun Life management) then left the meeting with their (bare minimum) $4.2 million premium.[28]

The next day, however, (according to the sworn and registered evidentiary instruments / documentation) a different group of managers from Sun Life showed up claiming that Sun Life had not assumed or incurred any liability to anyone, that it had received no such premium, and that it had in fact invested $2.1 million of its own lawful money of Canada and equity into the project, and then produces the signed, witnessed, sworn-under-oath and registered mortgage to prove it.

It then received a further circa $3.5 million from BuyerCo/SellerCo over the subsequent ten years from the hotel-business’ operating revenue, including re-payment (payment-again) of the $2.1 million of pretended / kited principal.

Within the frame of reference of the bottomry business model, Sun Life took a minimum $4.2 million up front out of the investment funds / securities / titles (equity) provided up-front by BuyerCo/SellerCo, as a reinsurance premium to underwrite the risk of failure of the business enterprise, and then pretended to be an equity investor in the same project so as to claim a further $3.5 million from the cash flow and profits of the (later successful-in-fact) business enterprise.

It is just in-your-face racketeering-on-steroids hiding-in-plain-sight. In Canada it has become all about the normalization of fraudulent / criminal objects and unjust enrichment, obtained by fraudulent / criminal means.

When confronted with the reality of the false receipt under the mortgage, the only answer that the pretended bankers and their solicitors have is to imply* that the false payment clauses and false receipts are simply a relic of longstanding practice among bankers, and that they are accordingly nominal and of no consequence. “These are not the droids that you are looking for. Move along.”

(*Their actual position is Bare. Naked. Denial. And a flat refusal to answer to any of the obvious defects in anything about any aspect of the alleged transaction other than to claim it was a “standard business deal”).

There is also the logistics problem of splitting the single sentence into two distinct parts. The first part is:

In consideration of the Principal Amount of lawful money of Canada, now paid by the Mortgagee [Sun Life] to the Mortgagor [BuyerCo/SellerCo], the receipt whereof is hereby acknowledged,

Ok. So that half is just fluff. It’s kind of like a general Bankers’ Logo or Seal of Approval that doesn’t otherwise mean what it says.

But the second half of the same sentence:

the Mortgagor [BuyerCo/SellerCo] doth grant and mortgage unto the Mortgagee [Sun Life], its successors and assigns forever, ALL AND SINGULAR the Lands subject only to the Permitted Encumbrances.

That part is real – it has legal meaning and import.

Such a position is regardless wholly untenable in fact (equity) and in law.

First, the required execution of the securities containing / recording the false payment / receipts are founded on an act of bearing false witness to a wrongful-act-in-law. The human owner / director of BuyerCo was required to swear under oath and penalty of perjury that he had witnessed BuyerCo commit an act of debt by receiving $2.1 million as a loan from Sun Life when no such act had occurred-in-fact. Likewise with the owner of SellerCo.

It is a wrongful act to bear false witness to any act of another, but it is a compounded or aggravated felony to bear false witness to the wrongful act of another (it is also a libel), and which cannot be cured by the parties claiming that they were pretty sure that the party against whom they have borne false witness under oath was later going to commit the wrongful act so falsely witnessed.

Strictly speaking, the writing was not a mortgage at all, but rather a sworn-and-registered-libel against BuyerCo/SellerCo.

Nor can a false document be converted into a genuine document by putting it into what is called escrow.[29] If a document is false as and when it is created (which is also the only time at which the truth of falsity of it can be definitively determined), then it forever remains a false document. If a purported Picasso painting is a forgery-in-fact, then it cannot be converted into a genuine Picasso by putting it into escrow:

In R. v. Lemire, [1965] S.C.R. 174, this Court held that the accused’s belief that his actions would subsequently be ratified afforded no defence. ….Lemire was convicted [at trial]. Reversing the decision in the Court of Appeal [and reinstating the conviction at trial], Martland J. (for the majority [of the Supreme Court of Canada]) held, at p. 193:

In other words, [the position of the accused is that] there is no intent to defraud within the requirement of s. 323(1) [now s. 380(1)] if the accused person, while deliberately committing an act which is clearly fraudulent, expects that that which he is doing may, at a later date, be validated. To me the very statement of this proposition establishes its error in law.[30]

The Supreme Court held that the accused had been properly convicted of fraud for issuing / submitting (converting) false receipts for payments that he had not made in fact, even though he may have believed that his falsifications would be subsequently validated or ratified.

The owners and management of Sun Life obtained an essential and material legal advantage over BuyerCo/SellerCo by preparing falsified documents and securities that falsely claimed that Sun Life was a lender (equity-investor), when in fact it was the principal-or-lead debtor (and reinsurer) under the real transaction where time is of the essence.

In R. v. Èmond, [1997] 117 C.C.C. (3d) 275, the judges of the Quebec Court of Appeal held that:

The first dishonest means appears to me therefore to be the intended and planned non-disclosure of the objective reality of the transaction.

In Èmond, all of the nominal victims had received what they had bargained for and had made some profit, but the Court / judges found that the bare fact that the accused had misrepresented the nature of the transaction to avoid disclosing his own additional profit from the other parties was sufficient to constitute the offence of fraud.

Here, Sun Life management and solicitors did not merely fail to disclose the objective reality of the transaction – they provided for the nominal securities to actively and objectively deny it and to lie about it. In both cases the underlying purpose was the intent of the accused to conceal what they had paid to acquire the asset that was then sold to the victim.

Second, the bankers do in fact act-upon and convert the false receipts (an act of conversion and money-laundering) when they record their receipt or registration of the mortgage / charge as an increase in their cash-equivalent / money assets (and an advance of secured credit received from the pretended-borrower) and / or when they convert it or reinsure it as a deposit liability back to the lead-underwriter.[31]

And most certainly if and when they foreclose[32] upon nominal default, because they then have an employee swear under oath and penalty of perjury that the bank had loaned money to the issuer of the security while expressly relying upon the false payment and receipt clauses to substantiate their claim (i.e., as evidence of their sworn (and false / otherwise unsupportable) belief under their Affidavit).

That is, the bank’s lawyer (through the bank’s employee) fraudulently presents / represents to the Court that the bank is seeking to recover borrowed money (an equity investment), when in fact it is itself attempting to realise on a contract of reinsurance (actually re-reinsurance) with an embedded (and illegal and wholly unlawful) waiver of proof of loss.[33]

Third, the collateral documentation (unregistered side-agreement(s)) is clear and specific[34] that the mortgage-security must be executed and delivered or registered before the banker will even make a final decision on whether or not to advance (reinsure) the credit or undertake any liability.

Also pay particular attention here to the word “further” in the No Obligation to Loan clause:

8.11 The Borrower [BuyerCo/SellerCo] agrees that neither the execution nor registration of this mortgage …will oblige the Lender to advance any further money hereunder but the advance of money from time to time will be in the sole discretion of the Lender.

The word “further” constitutes a double-barrelled fraud plus prima facie evidence of fraudulent intent.

First here, the provision regardless is clear and specific that Sun Life has no obligation to do anything at all after the mortgage is registered or in exchange for the registration / charge and legal title to the property.

Second here, however, the word “further” acts as a (false) cross-ratification of the false payment and receipt clauses. That constitutes prima facie evidence of criminal intent (see below on estoppel).

In fact, and here again, the deceit is even built into the metaphoric DNA of the nominal security. As and when the security is executed and issued / delivered / registered the nominal loan (actually wager and where the prize is credit-reinsurance) is at best a contemplated-future-(chance) event-in-fact (i.e., yet to be decided “at the sole discretion of the Lender”). Yet the same security purports to define it as:

1.20. “Sun Life Loan” means that loan of $2,100,000.00 made by Sun Life [past tense] to [BuyerCo/SellerCo] pursuant to a commitment letter issued by Sun Life dated 19 December 1996

As and when the security was sworn and notarized the actual loan was zero, so the definition technically refers to and means:

1.20. “Sun Life Loan” means Nothing.

The solicitors are thus metaphorically caught-with-their-pants-down. As and when they draw up the security (in anticipation of its future execution), they are making objectively inaccurate adjustments via verb-tense to facilitate the later misrepresentation of the substance of the transaction. They are using objectively-incorrect-language / grammar to ex-temporally stage-a-crime-scene where if it becomes necessary the lead-underwriter-and-creditor-in-fact can and will be falsely portrayed to the Courts as a debtor to gain a material (actually massive) legal advantage over them.

In R. [The Crown] v. William Ritson and Samuel Ritson [1869] C.C.R. L.R. Vol. I. 200, the accused were charged with forgery for falsely dating a mortgage document with intent to deceive the executor of an estate. The appeal court unanimously upheld the conviction for forgery with Blackburn, J. first citing and quoting (Sir Francis) Bacon (emphasis added):

“”The notion of forgery doth not so much consist in the counterfeiting of another man’s hand and seal . . . but in the endeavouring to give an appearance of truth to a mere deceit and falsity, and either to impose that upon the world as the solemn act of another which he is in no way privy to, or at least to make a man’s own act appear to have been done at a time when it was not done, and by force of such falsity to give it an operation which in truth and justice it ought not to have.”

The material words, as applicable to the facts of the present case, are, “to make a man’s own act appear to have been done at a time when it was not done.” When an instrument professes to be executed at a date different from that at which it really was executed, and the false date is material to the operation of the deed, if the false date is inserted knowingly and with a fraudulent intent, it is a forgery at common law.”

Not only have modern financial securities become cartoonishly criminal on their faces, but they are all prima facie A study in the art and science of “making a man’s [or woman’s (or corporation’s)] own act appear to have been done at a time when it was not done.”[35]

Note also that there are at least three separate lies embedded or inherent to the above alleged definition. First, there was no loan or even contemplated loan because it was in substance a credit reinsurance transaction with Sun Life as lead-debtor; second, it was regardless not $2.1 million but only (or rather at most) $2.05 million; and third, either way nothing had been “made” (loaned or reinsured) as and when the securities were executed and delivered / registered. We are not even out of the definition section, and Sun Life’s solicitors have already materially falsified the securities in three different ways.

Fourth, and critically, is the legal principle known as estoppel.

The other half of the nominal banking system is obsessed with, and essentially defined by, electronic, computerized, and human-operated systems and sub-systems designed around one central purpose – and that is to make it impossible in practice for anyone to obtain a receipt for money paid to a bank or banker before it has been paid in fact.

Estoppel is legalese for Catch-22, check, and/or checkmate. Virtually everyone legitimately in prison throughout the world is there directly or indirectly because of estoppel (except if they plead guilty, which they will normally only do because they are already trapped by some form of estoppel).

Applied to (pretended) banking (credit-reinsurance-in-fact) it means that the (pretended) bankers cannot maintain such extensive systems designed to ensure that they never give receipts for money before they actually receive it, while concurrently claiming that they do not understand the substance of their own wrongful acts of soliciting, obtaining, converting, and trafficking in such objective forgeries and falsified securities.

The same applies to the false payment and receipt provisions in isolation. When someone is charged under the criminal law with writing a bad cheque, it is completely irrelevant that they may have intended to get to the bank to make a sufficient deposit to cover the cheque before it is presented for payment.

As will be discussed in Part 5, the cheque attaches itself to the money / credit in the account as and when the cheque is issued, so that if the money / credit is not in fact in the account as and when the cheque is issued / delivered, then a felony is committed at that moment.

That is also why the cheque-kiter can be arrested and prosecuted for the crime even if the bad cheque is never presented for payment. Such is highly relevant because notwithstanding that the private global system has now written some $250 trillion in bad cheques or kited liabilities, the people to whom the cheques have been written do not yet know that they are holding bad cheques.

It is the bankers themselves who have championed throwing the little people into cages for that crime. The bankers – and most certainly their solicitors – cannot then turn around and claim that they do not understand why it would make a difference whether they had or had not actually made the alleged payment as and when they receive the nominal security and falsified receipt for it. (Of course their logical answer to it is: But except in a net 2% of cases we don’t ever actually make the payment at all, so what difference does it make?!!!).

And of course, if it is not recognised as illegal in and of itself, then what prevents an international-coalition-of-banks from effectively buying half the planet in a single deal with a mortgage that claims that they already paid a quadrillion dollars for it, when in fact they have not? The instant the mortgage is registered and processed in exactly the same way as the BuyerCo/SellerCo deal, a new $1 quadrillion would come into the system and be owned by the bank consortium and – poof! – their fictional $1 quadrillion investment becomes real after-the-fact. And it is just as real as the half-a-planet they bought with it.

Reverse the parties

To truly see the ever-increasing absurdity of it, simply reverse the identity of the parties and the pure labeling of the components. What is passed off as a business proposal when issued by Sun Life reads like a terrorist extortion demand letter when so turned around.

Assume that the owners / principals of BuyerCo and SellerCo had instead approached management at Sun Life with the following proposal / offer:

  1. Sun Life to pay BuyerCo and SellerCo $46,000 up front by cash / cheque;
  2. Sun Life to deliver circa $10 million of additional cash-equivalent money assets as nominal security but of which BuyerCo and SellerCo are henceforth the legal owners;
  3. Sun Life to give BuyerCo/SellerCo an express cash receipt swearing under oath (by Sun Life’s directors) that BuyerCo/SellerCo have already made a $2.1 million deposit of “lawful money of Canada”, and which shall remain valid even if they have not; and
  4. The following disclaimers that Sun Life and BuyerCo/SellerCo agree to wholly disregard any law against it, and that if any of it is illegal, or any of the representations are false, then Sun Life agrees to increase the rate of interest it will pay on the $2.1 million real or pretended deposit from 7.75% per annum to 59% per annum:

NOTWITHSTANDING the provisions of any Statute [law] relating to the rate of interest payable by [deposit-taker] debtors [e.g., s. 347 of the Criminal Code, GAAP, IFRS, Trust and Loan Companies Act, etc.], this [deposit] contract [and security] shall remain in full force and effect whatever the rate of interest received or demanded by [the depositor].

4.1 If the Interest Rate stipulated herein would, except for this clause, be a criminal rate or void for uncertainty or unenforceable for any other reason, then the interest rate payable on the [real or deemed deposit] will be ONE (1.00%) percent per annum less than the rate which would be a criminal interest rate calculated in accordance with generally accepted actuarial practices and principles [i.e., 60% – 1% = 59% per annum].

and in return

  1. BuyerCo/SellerCo will agree that they might make a $2.1 million deposit at their sole discretion, but are not legally / contractually obligated to actually do so, and get to keep all of the above described assets even if they don’t.

On top of the mind-numbing absurdity of it, the offer itself is obviously illegal and criminal to the nth degree. Without the Bank’s corporate logo it is just a simple gangster (or worse) shakedown letter.

The first thing that management of Sun Life would do (other than to call the police – or perhaps even a SWAT-team) is to explain that it is illegal for Sun Life to pay $46,000, or any amount, of interest-in-advance to a depositor or a potential depositor, as a fraud against GAAP and IFRS and against the owners / shareholders of Sun Life (in addition to the offences against (at least) s. 347 and ss. 206(1)(a) of the Criminal Code). And that it has nothing to do with the otherwise legitimacy of any real, imagined, or pretended expenses.

Second, it is illegal and criminal for Sun Life to give anything of substance or material value to anyone for the bare chance of them giving something in return. In law that is called a wager or lottery[36], and racketeering if done on an organised scale.

Third, the offer is prima facie to commit forgery and securities fraud, and

Fourth, the disclaimers and rate-boosting provision are too stupid to even comment on.

The real issue is as to how the little people have been educated and habituated to believe and perceive that the same grotesquely fraudulent and egregiously criminal transaction and naked transfer of assets (payment of Tribute to Caesar) becomes a fair and reasonable thing and business-as-usual when the entrenched-money-power is on the receiving end of it.

And again, it is even very easy to imagine the same deal offered by BuyerCo/SellerCo being characterised by Sun Life management as an implied terrorist-based-extortion-attempt. Anyone who would have the naked audacity to even propose or demand such a thing implicitly suggests some kind of retribution if it is refused.

Especially with the additional “NOTWITHSTANDING” any statute provision. Because of the procedural element, every such provision or declaration first reduces to “NOTWITHSTANDING the provisions of any statue to the contrary, this contract shall remain in full force and effect. The inclusion of the nominal qualifying condition is like saying to his face that the captain is an idiot and that you refuse to obey his order, and then, after gauging the reaction of your fellow crew members, adding “Not”.

The act of insurrection and mutiny is complete with the word “order”, and the captain is within his legal rights to treat it as such. As long as it is a lawful order, then it does not matter what particular order it might be, and everything at the back-end following the word “whatever” is equally and absolutely irrelevant.

Constructively it is as if the employees and solicitors for Sun Life had said to the pretended borrowers / lead-underwriter / creditors-in-fact:

“Look, you have already agreed with us verbally that you are going to give us circa $10 million in cash, unconditional undertakings of liability, real estate title, assignment of rents and other securities, and personal guarantees, and we have agreed verbally that in return Sun Life will make a net loan to you of circa $2.05 million. But for reasons that you don’t need to worry about, we want you to swear, sign, and execute / deliver securities that expressly state that you are unconditionally transferring ownership of all of your combined corporate and (pro rata) personal assets (the cash, liability underwritings, real estate title, securities and Personal Guarantees) to Sun Life, and that in return Sun Life has no obligation of any kind to you.

Don’t worry – we intend to actually make the loan [to reinsure your secured credit to us] but we just need you to swear under oath and penalty of perjury that we have already invested / paid you $2.1 million in “lawful money of Canada” and that we/Sun Life have and have incurred no liability to you at all. You just have to trust us. That’s why it is called a confidence scheme.

Also, even if we were actually loaning you the $2.05 million (that you are objectively advancing to us as underwriting credit) at a real rate of circa 9% per annum, we want you to swear that the principal amount is $2.1 million to hide or omit the fact of the $46,000 cash fees / payments in advance, and also to claim and declare that the rate of interest is only 7.75%. It is just better this way for us internally. Don’t worry about the false certification of the securities as compliant with the federal securities law (s. 6 of the Interest Act). Yes, technically that is an act of forgery and, strictly-speaking, money-laundering / trafficking-in-false-documents, but everyone in the industry knows that that is just a pretence and that nobody ever complies with it but only swears and registers that they do.”

That, again in a nutshell, is how Sun Life’s Assets and Assets Under Management (and (kited) Liabilities Under Management) have increased from circa $381 billion ($381,000,000,000) in 2008, to circa $1 trillion ($1,000,000,000,000) in 2019, without having produced anything tangible, and in an environment defined by a so-called credit-crisis and near-zero official or alleged interest rates. And total / aggregate declared income of only about, or say, $30 billon over the same period.

So if you only had $30 billion of aggregate net income over the 10-year period, then how can you now have $600 billion-plus more in assets that you own 100% in fact and in law, if you did not in substance purchase / acquire them with your unfunded and unsecured (kited) liabilities?

Put another way, how is it that based on the true balance sheets of the privately-owned-global nominal banking system, they are 98% credit-reinsurers, and 2% money-lenders; while virtually any evidentiary instrument (e.g., registered mortgage) chosen at random will claim to evidence an equity investment by the pretended-lender-but-lead-debtor/beneficiary-in-fact-and-reinsurer-in-fact?

Conspiracy theory my butt.

Sun Life, like all the rest of them, is a credit-reinsurer (equity-extractor / asset harvester) that collects and then owns premiums of up to 300% for a carefully managed (and massively over-secured and re-insured / re-re-insured) default risk of about 2%, compounded by the fact that it rarely if ever pays out on any claims.

From the position of the pretended banks / credit-reinsurers-in-fact, there are two distinct forms of risk or liability being insured against. The first is that the lead-underwriter will default on the servicing of their undertaking / underwriting of indebtedness (about 2% in practice), and the other is that the vendor of the property will demand to withdraw or convert the bank’s new liability into cash (also about 2% in practice). That is why the global system is so desperately trying to get rid of cash.

It is not the cash, per se, that the pretended bankers want to get rid of, but rather cash-convertibility of their liabilities to pay it as credit-reinsurers.

The reality of the system orchestrated by the owners and management of the circa 110 members (mostly nominal / pretended banks) of the Canadian Payments Association, that is in substance the Canadian Reinsurance and Kiting Association, is that they collectively still owe to someone every last dollar that they have ever purportedly loaned to anyone.

Same as the so-called or so-labelled Federal-Reserve-System in the U.S. And all the rest of the so-called banks around the planet.

And when it all comes crashing down, we will get the same answer that we always get – “Well yes, all of that is technically true, but, you know, it’s really your fault because you let us get away with it.”

Footnotes / endnotes 

  1. Most all nations have a similar organisation that acts as a clearinghouse for the kited-liabilities of their domestic financial institutions; and which interfaces internationally with those of other nations.

  2. $42,000 of which was claimed / demanded as a “Commitment Fee” that was not refunded in fact notwithstanding that the offer letter claimed that it was potentially refundable (and by definition a commitment fee is not refundable).

  3. The Assignment of Rents (AoR), for example, covered an existing annual cash flow of about $500,000, and which was expected to increase to about $2 million per year under the project. Sun Life then obtained a CUSIP securities registration number on the separately-registered AoR security (at the Land Title Office) for trading in international markets. Sun Life’s constructive position is that BuyerCo/SellerCo do not have access to those markets and therefore Sun Life does not have to account for whatever it makes on the side from the Assignment of Rents. But the amount of Sun Life’s gain from it is still counted in the value (estimated at $10 million) of the total assets obtained by Sun Life, and the right of property in it never passes to Sun Life but instead creates a trust in favour of BuyerCo/SellerCo regardless of whether they have or would have had direct access themselves to the same markets.

  4. The Offer Letter was technically constructed to claim that BuyerCo/SellerCo were making the offer to Sun Life, but that only compounds the felonies in a criminal law setting – because it is prima facie evidence that management and solicitors at Sun Life understood the criminal law violations under the arrangement. Also, the first material / criminal offence was under s. 206(1)(a) that expressly makes illegal the inducement of another to make the prohibited offer so Sun Life (owners, directors, management, solicitors) is trapped either way.

  5. In a conventional deal the purchaser / borrower would still need to issue a cheque to the vendor to complete the transaction. This is the point at which an additional sleight-of-hand comes in. In order to nominally transfer the $2.1 million from the purchaser to the vendor, the purchaser has to add another $2.1 million to the system in the form of its signed or PIN-Authorized $2.1 million cheque to the vendor, and which remains as a cash-equivalent-money-asset until it nominally clears. While the cheque is in transit there is a relative $4.2 million in the system, being $2.1 million to the credit of the account upon which the cheque is drawn, and another $2.1 million as the cheque itself. And if the bank were to go bankrupt the day after the transaction, for example, then the vendor would lose everything and immediately seek to recover their property – but they become estopped or legally prevented from doing so the moment they sign / endorse the purchaser’s cheque and deposit it with the bank. The purpose of the cheque is to gain the vendor’s unwitting ratification of the whole fraudulent process.

  6. Although not directly relevant in this particular case, there is a hierarchy of financial institutions such that those at the bottom (i.e., that are not direct members of the CPA / clearinghouse) will often have to maintain an account at one of the major chartered banks (or other full member). When these lower level institutions purport to make a loan, they will give a cheque drawn on their corresponding chartered bank, in which case the chartered bank’s assets and liabilities will increase. But one way or another, if the transaction is in substance credit reinsurance, then there will be a commensurate increase in aggregate liabilities (and assets) of the purported banking/financial system.

  7. Again, in this particular case the vendor/seller of the property was required to sign on as a covenantor or co-debtor under the terms of the security. As such they technically also re-re-insured Sun Life against any (virtually impossible) losses. Also, when Sun Life did eventually agree that it owed about $2 million to BuyerCo/SellerCo, it was made conditional on BuyerCo/SellerCo spending a substantial portion of it on an upgrade and conversion of the residential apartment building into an extended-stay hotel complex that was then owned by Sun Life and not BuyerCo/SellerCo. BuyerCo/SellerCo still had their constructive repurchase option, but as and when the corresponding nominal proceeds were spent, it was (in material part) for the benefit and account of Sun Life and not BuyerCo/SellerCo.

  8. See Gaysek v. The Queen [1971] S.C.R. 888, for example.

  9. Mozley And Whiteley’s Law Dictionary, Third Edition, by Leonard H. West, LL.D., and F.G. Neave, LL.D., London, 1908, p. 128. In other words, the lawyers know, or ought to know, and are regardless in the business of knowing, that it makes a difference.

  10. This situation was the same as in Burrows v. Rhodes and Jameson (1899) where the Courts ruled that where a manifestly stronger party fraudulently induces a manifestly weaker party into joint participation in a strict-liability criminal offence, then the weaker party can still maintain standing before a court of Equity to recover damages from the other party.

  11. “What is said to be an unconditional promise to pay a sum certain in money is itself money. The words on the face of the paper money, “will pay to the bearer on demand”, cannot alter its character as money and turn it into a different document which calls for the payment of money.” Bank of Canada v. Bank of Montreal, [1978] 1 S.C.R. 1148 at page 1155. The judges of the Supreme Court acknowledged here that it is the undertaking of liability that constitutes the provision of money (or credit), and not any further undertaking to convert or redeem for some other form of money or to re-pay or pay again. Paper currency is money because it is evidence of Crown debt, and not because of any additional promise to convert it on demand.

  12. Although given that there was no real principal at all, the entire $17,000 monthly payment could be more accurately described as fraudulently obtained interest.

  13. As defined under s. 2 of the Criminal Code.

  14. In fact directly contradicted by the contract. A bank employee, for example, would not be able to nominally advance any credit under the contract because of the receipt stating categorically that it had already been done. That in turn would automatically prove a constructive criminal conspiracy in a court of criminal jurisdiction. You cannot have a secondary operating system to accommodate the falseness of the receipt, while concurrently arguing that you did not realise that the receipt was false. Gaysek v. The Queen [1971] S.C.R. 888 also makes it clear that the false material particular (e.g., the false receipt) defines the writing as a false document under s. 321 of the Criminal Code, while the offence of forgery under s. 366 requires only the intent of the accused to act upon the false document as if it were genuine, and not necessarily on the false material particular that makes it a false document. In this particular case it was both, but such is not essential to establish fraud and forgery.

  15. Also, the financial capacity (in material part) was required to be put into the renovation of the building which was then owned by Sun Life and no longer by SellerCo or BuyerCo/SellerCo.

  16. The term “actual advance” is of course a misnomer. It is more correctly a pretended-actual-advance that is credit-reinsurance in fact.

  17. Note that the said deposit liabilities function-in-fact as evidence-of-indebtedness, and not as promises-to-pay. To be precise the Court ought to have written: “…to regard their deposit liabilities or evidence of their own indebtedness…”. That is, a bank’s “deposit liability” is first and foremost an assumption of liability and not a promise to pay. Also, to remain consistent with its opening observation that “they [bank liabilities] do not have the status of legal tender.”, the judge(s) should have later written: “…because the treasury branches have been able to deceive [and not to persuade] the public to regard their deposit liabilities or promises to pay as the equivalent of legal tender.”

  18. A fraud against both BuyerCo and SellerCo is complete at that moment. See R. v. Olan et al., (1978), 41 C.C.C. (2d) 145.

  19. SellerCo’s net equity in the real estate was $2.3 million or $200,000 more than the alleged loan. According to the owner of BuyerCo, there was an approximate $300,000 charge against the property owing by SellerCo. That is, of the eventual total net $2.046 million, $300,000 went to discharge that liability (to some other bank) with the remaining $1.846 million or so applied to the renovation project.

  20. A good portion of it is more correctly profit-or-gain-potential to which Sun Life would concurrently obtain an equitable-entitlement (as opposed to a potential-liability, per se.)

  21. January 30th is a kind of limbo day for the purposes of the analysis. The nominal mortgage and other securities were signed and sworn on the 30th, but not registered at the Land Title Registry until the 31st. But such is not material because Sun Life regardless did not undertake any liability to anyone until February. Also I am including the separate Assignment of Rents in the liability total based on its value in fact after the fact but which could not be known with certainty at the time of the nominal transaction. Also, had a bankruptcy been petitioned at that moment, and an ignorant trustee appointed with nothing but the official documents to go on, then BuyerCo/SellerCo’s current liabilities would have been only about $6.3 million and not $10 million, for a net differential of only about $16.3 million and not $20 million.

  22. There was a decision of the Manitoba Court of Appeal and / or as ratified by the S.C.C. in the late 1970’s or early 1980’s (as I recall) where the accused was convicted of narcotics trafficking under the criminal law even though there were no drugs involved. The Courts held that the accused had held out the substance as being illegal narcotics to an undercover police officer, and that that was sufficient to establish the offence of trafficking. Likewise the offence under s. 347 would be established even though there was technically no loan to be made under the contract, because Sun Life management had taken active steps to induce the target to believe that it was a loan contract.

  23. Such other reference would also be evidence of the separate offence of fraud under s. 380(1) because it leads the target (owner of BuyerCo) to believe that Sun Life is obligated to make a loan or advance after receiving the $4,000 while the fine print states clearly that if Sun Life chooses not to make an advance, then the $4,000 is non refundable and remains the property of Sun Life. It is effectively a bait and switch embedded within a larger bait and switch.

  24. It is extortion because the lender is requiring the borrower to assist the lender in committing a fraud against any other creditors or potential creditors of the debtor by falsely agreeing that the lender has loaned him more than they actually had.

  25. Although here again, and to be fair, the nominal loan fees are an independent fraud against SL’s nominal regulatory capital requirements. The company’s basic business model is a pyramid scheme and the regulatory capital fraud functions as a kind of super-charger or turbo-charger to the pyramid scheme.

  26. Technically the clause stipulates for 59.4% per annum because “ONE (1.00%) percent less” than 60% is 0.6% and not 1%, but the bank’s solicitors likely intended 59%. Basically, the clause provides that if the declared interest rate [of 7.75%] turns out to be false, then the nominal borrower agrees to amend the contract to increase the interest rate to 59% on the amount secured, regardless of how much is actually advanced. The clause also demonstrates that the solicitor who provided for it does not have an understanding of even junior-high-school level mathematics.

  27. This is another reason why it is far more than a mere technicality that the Bar Associations and Law Societies are defined as criminal organizations under the Criminal Code.

  28. Leaving aside for the moment the false $2.1 million cash withdrawal receipt and other assets. The total broadly-defined assets obtained by Sun Life as premium was about $10 million. There were also loan fees, an Assignment of Rents, Personal Guarantees, and legal title to the property. Also, the nominal Personal Guarantees were demanded later by Sun Life and so I have not imputed any specific financial value to them at the time of the transaction (i.e., they are not part of the estimated $10 million total).

  29. This is normally a device claimed by lawyers in the U.S. – but even if it were used in Canada it would be bogus.

  30. R. v. Lemire, [1965] S.C.R. 174, R. v. Theroux [1993] 2 S.C.R. 5.

  31. Actually the actus reus of the money-laundering offence is complete when they induce the other party to register the mortgage in favour of the bank. It is not strictly necessary for the bank to further act upon it at all.

  32. Foreclosure refers to the nominal debtor’s repurchase option for the legal title to the property. It is not the real estate property that is foreclosed because the bank / mortgagee already owns it (the legal title) from the moment the mortgage is executed. More formally, what is foreclosed is the nominal debtor’s equity of redemption – their chance to redeem themselves from the sin of debt by paying all the interest and re-paying the (pretended / kited) principal.

  33. A waiver of proof of loss is a constructive provision that the question of fraud shall not be raised and it renders the whole agreement void.

  34. Notwithstanding that it is embedded within a further / independent bait-and-switch.

  35. There is a slight variation here because while the date of execution of the mortgage / security is correct, the fact of of concurrent or already-executed consideration is objectively false, but the same fraudulent result is obtained either way.

  36. A lottery-of-one, where either you win or you don’t, is the most basic form of chance or game of chance.