Brother messes up with email scam

Bob Aaron in Legal

Back in 1998, brothers Faheem, Shaun and Narool Samad decided to purchase a house in Toronto for the three of them and their parents to occupy. At the time, they signed an agreement that set out the terms of the ownership, use, occupation and eventual sale of their interests.

Things seemed to be operating smoothly until Shaun became involved in what is known as a "Nigerian letter scam" in 2001. He was duped into thinking that there was unclaimed money in a bank account in Nigeria, which he and any partners he recruited could claim.

Shaun pitched the scheme to his "circle of influence," and eventually raised more than $700,000, which was transferred to the engineers of the scam.

The following year Shaun realized he had been defrauded. He met with a lawyer who advised him he was potentially liable to civil lawsuits by some of the individuals he had recruited into the Nigerian "investment."

Shaun's one-third interest in the house was his only major asset. In order to protect it from being attacked by creditors whose investments he had personally guaranteed, Shaun sold it back to his two brothers in 2003 for $60,000.

After the title transfer, Shaun remained in the house. He continued to pay $500 a month as his share of the property expenses to his brother Faheem, who eventually became the sole owner. He stopped making payments in February 2005, but continued to live in the house.

The relationship between the brothers deteriorated. Eventually, Faheem sued Shaun to evict him from the house and force him to pay "rent" for occupying the house starting in February 2005. Shaun refused to leave, claiming he was still a part owner of the house.

When the case got to court, Shaun claimed that there was a secret, oral agreement that he would still be entitled to a one-third ownership. The $60,000 proceeds, he said, was not for the sale of the home but was instead a loan to put him back on his feet financially, and to pay back some of his creditors in the Nigerian scam.

He testified that the release, which gave up his claims to the house, was a fabrication designed to dupe creditors into thinking that he no longer had any interest in the property.

Justice Todd Archibald presided over a three-day trial in June. After hearing the evidence, the judge wrote in his decision that Shaun was "very sophisticated, intelligent and resourceful," and "crafty and clever," but that his evidence was "not remotely credible or believable."

The judge noted that Shaun "admitted, several times on the stand, that he removed his name from the title and entered into the oral agreement in order to defraud his creditors in the Nigerian scheme."

An important part of the judge's decision dealt with the doctrine of clean hands. That doctrine, Archibald noted, would not allow the court to enforce an oral contract that Shaun "clearly entered into for the purpose of defrauding his creditors."

"In light of the defendant's fraudulent conduct," the judge wrote, Shaun's "fabrication" of the paperwork "in order to defraud his creditors would prevent me from ...(ruling) in his favour...I do, however, conclude that the defendant sold his interest in the house."

The judge ordered Shaun to pay his brother $20,500 in rent and $5,000 in costs. As well, he was ordered to vacate the house.

Three lessons are apparent from the Samad brothers case:

If you're ever involved in a lawsuit, make sure you come to court with clean hands. Courts tend to have no sympathy for litigants who admit fraud.

If an ownership interest in a house is going to be held in trust by a third party, make sure the arrangement is fully documented.

Never get involved in a scheme to obtain money. There is no pot of gold at the end of the email rainbow.

Bob Aaron is a sole practitioner at the law firm of Aaron & Aaron in Toronto.  Bob specializes in the areas of real estate, corporate and commercial law, estates and wills and landlord/tenant law. His Title Page column appears Saturdays in The Toronto Star and weekly on Move Smartly.  E-mail

Subscribe to the Move Smartly blog by email

Legal     |    

Toronto’s most authoritative real estate insights, delivered right to your inbox.