Investigators out of the Montreal police (SPVM) economic crimes section have arrested two men with alleged connections to a home-buying scheme that defrauded victims of more than $1.5 million.

Mark Blumenthal, 51, and Constantin Niphakis, 42, were arrested in Côte Saint-Luc on Nov. 15 and appeared in the Montreal courthouse on fraud charges.

Police allege they ran the "J'achete des maisons CA$H" company that involved homeowners seeking to sell their homes quickly for cash.

The police claim the men would present themselves as investors looking to buy, renovate and flip the houses for a profit.

"To attract the interest of their potential victims, who are often in a vulnerable situation, they dangle the possibility of a quick transaction," the SPVM said in a news release. "The victims then meet with a notary or lawyer chosen by the fraudsters to sign a sales contract. There, they are given a percentage of the sale price in cash. The victims are also told that the rest of the sale price will be paid after the house has been renovated and resold, at the latest in one year."

While this is happening, police allege the suspects would take out a large mortgage with a private lender and then deliberately not meet any conditions or do any renovations.

"In the end, the house is foreclosed by the company that granted the mortgage," police say. "The fraudsters walk away with the mortgage money in their pockets, while the victims wait for a second payment that never comes."

Montreal police are asking anyone with information about the two men to contact the department's Info-Crime line at 514-393-1133.

In addition, authorities offered tips for the public to prevent fraud:

  • Be vigilant when it comes to real estate transactions.
  • Beware of offers that seem quick and advantageous.
  • Consult professionals that you have chosen yourself and that you trust.
  • Talk to your family before making a final decision and signing any documents.
  • Take out title insurance, which covers legal costs in the event of title theft.
  • Visit the Canadian Anti-Fraud Centre website.