Former Mississauga-Streetsville MP Wajid Ali Khan has received a six-month conditional sentence and was fined $5,000 in Ontario Superior Court on Thursday for claiming a $15 million promissory note as an asset during his bankruptcy proceedings, which he knew was worthless.
“That was an error in judgment and I realized that. I deeply regret my mistake and I will carry the burden of guilt as long as I live,” the 75-year-old businessman said during a proceeding held remotely via Zoom.
On March 10, Khan pleaded guilty to one offense under the Bankruptcy and Insolvency Act four years after the RCMP charged him and another man with criminal offenses connected to a fraudulent real estate scheme in Pakistan. Prosecutors withdrew the criminal charges against Khan on Thursday.
His co-accused, Nadeem Ahmed, was sentenced last year to two-and-half years in prison after being found guilty of two counts of fraud over $5,000 and using a forged document. Khan, who testified at Ahmed’s trial, told court Thursday that meeting him was a “terrible mistake.”
In total, Khan transferred between $4 million and $5 million to Ahmed for various properties and agreed to guarantee some loans made by third-party lenders, according to an agreed statement of facts.
Around May 2012, Khan expressed concerns to Ahmed that he might lose his money. In response, Ahmed provided Khan with forged bank documents purporting to confirm the funds, and gave him an “acknowledgment of indebtedness” stating Ahmed owed Khan $15 million.
Khan later learned he’d been duped and in January 2015 reported to the Toronto police that he had been defrauded of millions of dollars. Within a few days, Khan filed for bankruptcy and, as required, listed his assets and liabilities. Three men were listed as creditors. One of the assets was the $15 million promissory note from Ahmed, “notwithstanding that it was of no value,” the court document said.
“Mr. Khan admits that he was willfully blind to the falsity of that entry in his statement of affairs. Mr. Khan was subsequently declared bankrupt.”
On Thursday, at his sentencing hearing, Superior Court Justice Jane Kelly noted the irony that Khan would claim $15 million in assets when that could interfere with his attempt to go bankrupt.
She called it a “significant aggravating factor” that he went to police suggesting he had been defrauded by Ahmed but then, days later, provided the $15 million note in bankruptcy filings.
Khan’s lawyer, Jonathan Shime, told the judge what his client did was a “technical breach of the (bankruptcy) act,” and that he had “with no intention to deceive and it had no effect of deceiving the court and its ultimate declaration of bankruptcy.”
Shime said Khan has an unblemished and impeccable record of service to multiple countries and community, and that he has suffered “a very, very public fall from grace and tremendous stigma as a result” of being labeled a fraudster when he “was legally innocent.
(The) withdrawal of criminal charges serve as confirmation of his innocence,” Shime said, adding this was “a nominal offense against the administration of justice.”
During his apology, Khan, who was an MP from 2004 to 2008, said that after politics he dedicated himself to business endeavours, and built up a successful car dealership, before losing his life savings.
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