A Toronto mortgage broker is out of business and owes $70,000 in fines after a three-year legal battle with regulatory authorities.
On Monday, Harold Gerstel and his company, Harold the Mortgage Closer Inc. had its licence stripped by the Financial Services Regulatory Authority of Ontario (FSRA) for refusing to cooperate with an investigation and “repeatedly providing false or misleading information” on licensing applications.
According to court documents, the trouble for Gerstel first started in May 2022, after one of his clients went to the Toronto Star to complain about a deal that he brokered. The 75-year-old victim, who has since died, wanted to finance some renovations on her North York home, but allegedly ended up with shoddy work and multiple mortgages.
The victim explained that she hired a contractor, Anthony Sinopoli, and a lawyer, Kamele Barrett, at Gerstel’s recommendation. That decision ended up costing her $1.3 million and forced her to sell her home.
She ended up suing all three individuals after moving into a retirement residence.
At a court hearing in January 2023, the judge said that Gerstel, along with the contractor and lawyer, “conspired to bamboozle a sick and elderly lady into unconscionable loans to fund over-invoiced and sub-standard renovations.”
Sinopoli, known professionally as “Tony the Contractor,” was ultimately arrested and charged with defrauding 15 homeowners who hired his home renovation company.
At the same time, the FSRA was investigating Gerstel’s mortgage activities and later issued a warning letter identifying several instances of non-compliance. The agency found that Gerstel failed to properly conduct identity verification, incorrectly disclosed the number of lenders he represented and did not include processing fees in the calculation of the cost of borrowing.
“Consumers deserve a mortgage brokering sector they can trust, and that starts with transparency, honesty and accountability,” Elissa Sinha, director of litigation and enforcement at FSRA, said in a statement. “The Tribunal’s decision affirms that mortgage brokers, agents and brokerages are obligated to fully co-operate with FSRA’s investigations and honestly answer FSRA’s questions.”
“Anything less undermines confidence in the entire industry and comes with significant consequences,” she added.
In a phone call with CityNews on Friday, Gerstel, who is also known in the jewellery business as “Harold the Jewellery Buyer,” denied any wrongdoing and said he had “many satisfied customers” as a mortgage broker.
When asked if he will appeal the FSRA’s decision to revoke his licence, he said it’s something he’s considering. “I have 30 days to appeal, I’ll have to check with my lawyer and see what he says,” Gerstel explained.
In addition to having his licence revoked, Gertsel faces two fines amounting to $70,000 for his “flagrant” failure to cooperate with the FSRA investigation and for providing false and misleading information.
He also faces disciplinary action from the FSRA in a separate case that is still before the tribunal.
Click here to read the full judgement.
