CALGARY - Economics and lax banking regulations have made Calgary a hotbed for mortgage fraud, says a forensic accountant and former Mountie.

Affluence, economic booms and a loophole unique to Alberta where mortgages can be assumed without bank qualification have made the city an attractive place for crooks to spin real estate scams, said Greg Draper.

"Calgary and Alberta has certainly been prime grounds for mortgage fraud," said Draper of the firm Meyers Norris Penny which does forensic audits for law enforcement.

His comments come on the heels of the bust of an alleged $12 million mortgage scam in the city involving 22 properties and a similar $70 million scheme focusing largely on Calgary uncovered earlier this year that stung the Bank of Montreal.

A hot economy, said Draper, makes it easier for mortgage fraudsters to get their feet in the door.

"The housing price boom created a lot of opportunities...prices could be inflated quite rapidly without drawing a lot of attention," he said.

And the relative affluence of Calgary naturally attracts organized criminals while ensuring a larger pool of more eager buyers to be victimized, said Draper.

City police won't say Calgary's singled out by mortgage crooks, saying it's a problem that spans the country.

But Sgt. Michelle Hanley of the commercial crime unit said they're seeing an increasing number of mortgage fraud reports, adding the phenomenon threatens to "inundate" investigators.

Draper said his own business has recently been handling more scam cases that usually involve commercial properties.

Alberta's relaxed mortgage regulations, he said, expedites commerce but also make the system more vulnerable to abuse.

If banks were to voluntarily tighten it up, customers "will just go somewhere else," he added.

He said so-called "straw man" buyers who agree to assume fraudulent mortgages in their name with a promise of $5,000 from scammers are committing fraud and should know the deal is too good to be true.

"By being stuck with the mortgage, they may be tipped into bankruptcy for a little bit of easy money," said Draper.

In the latest alleged scheme, police have charged Calgarians Ali El-Sayed, 31 and Christos Fotopoulis, 28 with numerous counts of fraud over $5.000.

They're still seeking Calgarian Russell Kilba, 34.

bill.kaufmann@sunmedia.ca