01/10/2014 11:16 EST | Updated 03/12/2014 05:59 EDT

Mac Harb, Former Liberal Senator, Target Of RCMP Fraud Probe


New documents released yesterday in an Ottawa court lay out the details of fraud allegations against former Liberal senator Mac Harb.

The RCMP allege Harb committed mortgage fraud in relation to two properties outside Ottawa.

The allegations haven't been tested in court and are part of an ongoing investigation.

The RCMP say that without telling his mortgage provider, the Royal Bank of Canada, Harb transferred 99.99 per cent of a property to a diplomat from Brunei.

The RCMP say that put the bank at risk had there been a default on the property.

The new records expand on allegations previously reported by CBC News regarding two of Harb's Ottawa properties.

Harb "did by deceit, falsehood or other fraudulent means defraud the Royal Bank of Canada of money in excess of $5,000," Cpl. Greg Horton wrote in an affidavit filed in court Dec. 10.

'Fraudulent misrepresentation'

Harb provided "false information to the Royal Bank of Canada" in support of a mortgage application on a second property, Horton alleges.

This is not directly related to the Senate expenses scandal and doesn't involve taxpayer money directly, but was uncovered in the course of the investigation into his inappropriate housing expense claims.

Those expense claims were subsequently repaid to the Senate.

The RCMP say Harb sold the vast majority of the property he owned in Cobden, Ont., in 2007, four years after he bought it.

The police allege Harb took out a mortgage for $177,000 on that property hours before he transferred 99.99 per cent the title ownership to the diplomat, Magdalene Teo.

In 2010, Harb bought a house in Westmeath, Ont., and took out a mortgage from RBC for $240,000.

"When applying for the mortgage, he listed the property in Cobden as a solely owned asset, when in fact he held only .01 per cent interest of the Cobden property. This was a fraudulent misrepresentation of assets on that mortgage application," Horton said in the court documents.

Diplomat now in China

Teo represented Brunei in Canada and is now her country's ambassador to China.

She has declined to speak to the RCMP and requests questions in writing, Horton says.

"The relationship between Ms. Teo and Senator Harb has not been determined by investigators on my team, nor is it clear why Senator Harb maintained a .01 per cent interest in the property after selling it to Teo, or why she refuses to speak to investigators."

Horton says Harb is also refusing to speak to investigators.

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