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VI.
The Indicia of ‘Deceit, Falsehood or other Dishonest’ Conduct
A.
Straw Buyers who “Pulled Mortgages”
[121] Each trial develops certain understandings and terminology. For the purpose of this trial,
many of the individuals who were involved with Mr. Seremet, Mr. MacMullin, or others
involved in these mortgage transactions referred to themselves as “straw buyers”. I will adopt a
definition for this trial that a straw buyer was an individual who would take title a property and
apply for a high-ratio mortgage (there was one exception when a conventional mortgage was
applied for) in a non-arm’s length transaction while never intending to reside in the property, nor
be the equitable owner of the property. In all cases, the equitable owner was Mr. MacMullin,
although in most there were attempts to disguise that fact.
[122] The straw buyer’s role was to supply employment and financial information and sign
where told. In turn, the straw buyer would receive a fee for supporting the scheme. The concept
of “pulling a mortgage” is equivalent to “applying for a mortgage”, however in the context of
this case, I will use the phrase “pull a mortgage” in the same manner as most witnesses. This
meant the act of getting a mortgage to assist another person: the equitable owner of the property.
Both the terms “straw buyer” and “pulling mortgages” are sinister terms, indicative of deceit.
Mr. MacMullin, in his testimony, said he resented that terminology. He explained that the straw
buyers were really “investors” who knew exactly what was going on.
[123] The straw buyers came from all walks of life. They came from all educational
backgrounds. One had a PhD in statistics, others were university and college trained, and still
others had trade certificates. They were drawn into this mortgage scheme for a number of
reasons: desperation, excitement, greed, and a maniacal belief in the concepts that were being
explained as a legitimate business program to get ahead. At the end of the day, many endured
grief, economic loss, unhappiness, and had their credit negatively affected. If there were any
winners amongst the straw buyers, they were difficult to find. Even those who ultimately did
make a profit only did so by hanging on to the property they were stuck with. They said they
were stressed by the process and would rather have not been involved.
[124] The straw buyers included an actor, an office clerk, a university instructor, teachers, a
war veteran, an honorably discharged soldier, several machinists, several oilfield workers,
salespersons, housewives, insurance brokers, a mechanic, a contractor, a gambler, a bar
supervisor, clerks and government workers, truckers, mechanics, and retail salespersons. Many
of them were very young at the time they became involved with Mr. MacMullin. Many had new
families and financial problems. All were much wiser when they gave evidence.
[125] Many had another common connection: the multilevel marketing network of Amway
(Quixstar). The mention of Amway in this lengthy trial is not intended to discredit Amway. That
organization itself had nothing to do with this mortgage fraud. However, Mr. MacMullin was a
highly respected upper-level Amway salesman who had recruited a significant “down line”.
Amway sells cleaning and household products by recruiting numerous independent contractors.