Pressure builds on former MP Raj Grewal amid fraud allegations

Former Ontario MP Raj Grewal is facing a dramatic new wave of legal pressure, with police asking for help investigating alleged fraud and other wrongdoing by the lawyer and his colleagues, Ontario’s legal regulator moving to take over the law firm Grewal founded — and even his own father-in-law accusing him of multi-million-dollar fraud and forgery.

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The impact of the affair on Grewal’s family is particularly striking.

Father-in-law Kailash Kasal said in an affidavit last month he’s struggling to preserve good relations with his lenders based on “the fact that I have no connection to this fraud perpetrated by Raj Grewal and others and that I am a victim of the fraud.”

The businessman confirmed that his daughter and her husband are estranged, but said he had held off asking Grewal about allegedly tainted funds that appeared in one of his companies’ accounts.

“I did not want to do anything to antagonize Mr. Grewal in a manner that may affect my grandchildren or my daughter,” Kasal said in the affidavit.

The latest developments come after numerous businesses and individuals have filed legal action against Grewal, his associates, the law firm and numbered companies in recent months, charging them with mortgage fraud, misappropriation of funds and handling fake cheques.

Recently filed lawsuits have estimated that $200 million or more is in dispute, based on allegations that are so far unproven but, if validated, would constitute one of the largest-ever cases of financial misconduct by lawyers in Canada.

None of the charges has been proven in court.

Simon Bieber, one of Grewal’s lawyers, said Wednesday that his client denies any wrongdoing, is co-operating with the Law Society of Ontario and “looks forward to continuing his defence.”

As he has indicated before, Bieber said Grewal is involved in many commercial transactions and, especially in uncertain economic times, the parties sometimes have a falling out that leads to litigation. He is the plaintiff in some cases and defendant in others and is “working diligently to resolve all outstanding litigation in a manner that is fair to all involved,” the lawyer said.

Grewal, the former Liberal member for the Brampton East riding west of Toronto, quit Parliament in 2018 after admitting to racking up millions in gambling debts. He later started RSG Law, the name based on his own initials. A paid advertorial in the Toronto Star last July that featured Grewal and was headed by his photograph called it a “thriving legal enterprise” with a 40-person team.

Earlier this year, he voluntarily gave up his licence as the Law Society of Ontario investigates him and others and seeks to have his credentials suspended.

The society went further recently, asking the Ontario Superior Court for permission to take over all accounts, client files and safe-deposit boxes of RSG Law, Grewal and Davinder Khattra, the junior colleague now listed as the firm’s owner. The regulator earlier suspended Khattra’s licence.

The society notes that various plaintiffs name Grewal and Khattra in legal actions related to “the alleged misappropriation of at least $17 million.” Today, $340,303 remains in RSG Law’s accounts, its notice of application says.

The regulator “has a statutory duty to protect the public interest and advance the cause of justice and rule of law,” it said in a notice of application asking to be made a trustee of the firm.

Peel Regional Police had until recently stayed silent about the affair. But last Friday the force issued a news release confirming that it’s investigating “multiple” allegations of fraud and breach of trust involving lawyers at RSG Law.

Detectives believe there are additional victims who have not yet come forward, the release said, asking that people contact police if they’ve suffered a financial loss or have information relevant to the cases.

It’s too early in the investigation to discuss potential charges, Peel spokeswoman Const. Laurie McCann said Tuesday.

Father-in-law Kasal alleges that, unbeknownst to him, Grewal and associates used the in-laws’ names and companies to fraudulently garner millions in loans.

Kasal is named as a co-defendant in at least two lawsuits dealing with mortgages taken out by RSG Law on properties he owned. The money was supposed to pay off previous loans as part of refinancings, but the lawyers never cleared the earlier debt or removed those loans from the properties’ title, alleges one of the suits, launched by the National Bank and others. The “funds are unaccounted for and appear to have been misappropriated by the defendants,” Ontario Superior Court Justice Frederick Myers said in a June decision.

In the affidavit he swore on Sept. 25, father-in-law Kasal says he knew nothing of the mortgages, and received none of the borrowed money.

He alleged the electronic signatures on the mortgage documents that purport to be his were not his, and one in ink that claims to be that of his wife — who had no involvement with the properties — is what he called a “clear forgery.” Evidence indicates that Grewal was behind the allegedly bogus mortgage papers, he charges in the affidavit.

Another case that named Kasal as a co-defendant involves $107 million lent on properties that he and others owned, the lenders alleging that the mortgages were not properly secured or insured and some of the funds re-directed for the RSG lawyers’ “own purposes.”

In legal action he filed late last month Kasal again said he had no knowledge of the mortgages and cross-sued his son-in-law, Khattra and RSG Law, demanding they pay $1 million in damages for “negligent and/or fraudulent misrepresentation.”

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