(May 20 2020)
One fine afternoon at the lawyer’s office
Globally, the USD-equivalent of some $250 trillion ($250,000,000,000,000) turns on the following conversation that obviously should happen, but which never happens. The scene is a lawyer’s office in Victoria, Canada (but it’s the same all over the world):
Kevin (A financial solicitor): Hi John, how’s it going?
John (A local entrepreneur and owner of ten hotel / motel properties, and who employs about 300 people): Pretty good Kevin, but I’m in a bit of a rush as usual. Do you have those mortgage papers on the new building on Queens Street for me to sign?
Kevin: Yes I have them right here. The bank’s solicitor sent them over this morning.
John: Great – just let me have a quick look. Ok – Principal amount is $2.1 million, interest rate is 7.75% – Ouch! – and the monthly payments are $17,000. Ok where do I sign?
Oh wait! – I see here the clause on the first page states:
In consideration of the Principal Amount of lawful money of Canada, now paid by the [bank] to the [borrower], the receipt whereof is hereby acknowledged, the [borrower] doth grant and mortgage unto the [bank], its successors and assigns forever, ALL AND SINGULAR the Lands subject only to the Permitted Encumbrances.
So they’ve already paid us the loan proceeds?
Kevin: No. No. That will still take a few days, and not until after the mortgage is registered at the Land Title Office.
John: But I thought that I have to swear this under oath and penalty of perjury?
Kevin: That’s right.
John: You want me to swear under oath and penalty of perjury, and then register a security, that states categorically that I have already received $2.1 million of “lawful money of Canada” from the bank, and “now paid” and “the receipt of which is hereby acknowledged” when we both know that that isn’t true?
Isn’t that illegal? I can’t see how that could possibly not be illegal? In fact I’m pretty sure it is a criminal offence. And if we then register it, then isn’t that technically called conversion or money-laundering?
Kevin: Calm down John. It’s just routine. That’s just how it’s done.
John: But under the bank’s terms-letter I have to pay a total of $16,000 in legal fees – at $8,000 for you and another $8,000 for the bank’s solicitor – for you both to advise me that it is ok to swear under oath and penalty of perjury that I have already received a payment of $2.1 million from the bank when the bank hasn’t paid me anything and I haven’t received anything?
Both you and the bank’s solicitor are members of the Bar Association aren’t you?
Kevin: Yes of course.
John: And the Bar Association doesn’t have any rules about advising clients to swear false affidavits and registering falsified securities and false receipts at the Land Title Office?
Kevin: You ask too many questions John. I told you it’s routine.
John: But the moment the security is registered the bank will be $4.2 million richer. I will have advanced $2.1 million of real-estate-secured-credit to the bank by agreeing unconditionally that I owe it $2.1 million plus interest, while the security itself states exactly the opposite and that the bank has already paid me $2.1 million of its own lawful money of Canada. That can’t possibly be legal.
Kevin: Ok now you’re starting to piss me off. Do you want the loan or don’t you? If you do, then raise your right hand, swear, and sign the damn papers. If you don’t, then there is the door.
Congratulations. Now you know where all the money comes from.
The most specific criminal act that John was thinking of is called suborning perjury. His lawyer was counselling him to commit an act of perjury by swearing under oath and penalty of perjury and to bear false witness against his corporate entity that he had witnessed that corporate entity commit an act of debt by receiving a $2.1 million loan from the bank.
Strictly speaking, the thing registered was not a mortgage but a registered libel against John’s corporate entity, and that stripped it of all its legal and equitable rights as the real creditor that was advancing real-estate-secured-credit to the bank.
Here again – this isn’t rocket science. Imagine the following truncated conversation at the bank:
Potential customer: Hello – I would like to obtain $2.1 million of credit from the bank to purchase a residential apartment building.
Banker: Yes I think that we can do that. But you will have to first give the bank a sworn and notarized receipt swearing under oath that the bank has already paid you $2.1 million, and then have your lawyer register the sworn security at the Land Title Office.
The truly amazing thing is that people have been so habituated to trust nominal authority figures that they can be induced into doing the most obviously and ridiculously fraudulent things without even perceiving anything unusual about it.
Note also the similarity of the two techniques. The banker uses the purported security to deceive the pretended borrower into advancing real-estate-secured-credit to the bank, while the same writing has been falsified to evidence a cash / equity investment by the bank. The result is a double-whammy instantaneous $4.2 million increase in the bank’s wealth the moment the security is registered, and which it then uses to support an unsecured $2.1 million deposit credit back to the pretended borrower.
A true money-lender walks away $2.1 million poorer after making a $2.1 million loan.
A banker walks away $2.1 million richer after (purportedly) making a $2.1 million loan.
The difference is $4.2 million.
On the human-interaction flip-side of the same mirror-image device, we are all being systematically looted by the bankers because we have been habituated to believe that it can’t be happening because the lawyers would not let them get away with it. So we all end up getting screwed twice-over for double the amount the bankers would screw us out of without the lawyers helping.
John had to pay $16,000 in legal fees to pay both lawyers who were both in fact working for the bank.
This Post Has 2 Comments
The bank “loaned ” two point one million.
The never mentioned “seller” got the money.
The borrower got the real estate.
True, the bank will make out like a bandit on interest.
The borrower will get the title if loan paid off.
Hi – Sorry for the extended delay – I’ve been locked out of the site. I answer to your comment, you are incorrect. The lead-underwriter / nominal borrower already owned the property with near clear title. There was no seller to mention. And the $2.1 million had to be put into the renovation and upgrade project – after the bank obtained all right, title and interest to the property for nothing. He still had the repurchase option but as and when the $2.1 million was put into the building it was owned by the bank. And the bank never loaned anything – it merely agreed that it owed. I am posting a new expanded version called Usury as cognitive dyslexia that gives a much more detailed account.
And regardless, the crimes committed by the lawyers and the bank management were complete when they solicited the offer from the John. Why did you put “loaned” in quotation marks?