Bw Reads: How to steal a house

Welcome to Bw Reads, our weekend newsletter featuring one great magazine story from Bloomberg Businessweek. Today, Ari Altstedter tells the tale of what happened when a man named Arash Missaghi was murdered in suburban Toronto last year, and his killer accused him of swiping properties and ruining his investors' lives. You can find the whole story online here.

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Handguns and assault rifles aren't easy to get in Canada. So when Alan Kats decided to kill two people, he went to the local Bass Pro shop to examine its selection of hunting firearms. He settled on a Winchester SXP Defender shotgun, designed for speedy pump action between shots, and bought four boxes of ammunition meant to stop large game.

On a warm June afternoon, he found the people he was looking for at a sparsely populated office building in the Toronto suburb of North York. Shepherding both into the building's marble lobby, he fired a shot to let them know he was serious, then demanded the return of the C$1.28 million ($936,000) he and his wife had given them.

"I swear on my mother's grave I will pay you back, just put the gun down," said a male voice, according to a witness who was hiding down the hall.

"How are you going to pay me?" Kats asked.

"I will sell my house," a female voice said. Then the witness, Shahrokh Biniaz, fled out the back door and called the police. While Biniaz was waiting outside, he heard four shots in quick succession, a pause, then a fifth. After the police entered the building, he overheard one officer say to another: "He shot himself as well."

The events leading up to that violent day in 2024 had been set in motion a year and a half earlier, when Kats and his wife, Alisa Pogorelovsky, decided to invest in private mortgages. The couple, both immigrants to Canada, ran a home renovation business that was working them off their feet thanks to a surge in demand during the Covid-19 pandemic. Finding some investment income seemed attractive, and they happened to have a ready way to raise capital. The house they lived in with their two kids was mortgage-free and, thanks to Canada's quarter-century-long real estate boom, worth a lot of money. So they pursued a popular investment strategy: borrowing against their home to invest in other real estate.

A wealthy friend recommended that, rather than buying another place and dealing with the hassle of managing actual property, they try funding private mortgages instead. That would mean using their bank loan to lend directly to borrowers who might not be able to get one themselves. The couple could then collect interest payouts of 10% or more, secure in the prospect that they could seize the property if the borrower fell behind on their payments, just like a bank could. And the high interest rates would easily cover the installments on their bank loan, plus provide a healthy return.

Their friend put them in touch with Samira Yousefi, a mortgage broker specializing in such deals. In October 2022 she helped them borrow C$1.375 million against their home from the Canadian Imperial Bank of Commerce. Within a year almost all the money they'd borrowed had been lent out to various corporate parties in deals run by Yousefi.

But the interest payments didn't come. For months, Kats hounded Yousefi and received excuses, managing once to get a portion of a payment and that was it. Eventually, Yousefi set up a meeting with someone she said could answer all of his questions. Kats and his wife wound up in a conference room with a big man who spoke softly and introduced himself as Arie Astanni. He said he administered the mortgages, promised a written report on the status of their investments and gave them his mobile number to follow up.

Then Astanni became evasive too, so Kats began searching "Toronto mortgage fraud" online. He soon found news clippings featuring a picture of Astanni, identified by a different name: Arash Missaghi.

Missaghi, Kats would learn, was practically a legend around Toronto. Various courts, tribunals and regulators had identified him as the mastermind of more than two dozen fraudulent real estate transactions that had collectively bilked people out of tens of millions of dollars across two decades. But these bodies seemed powerless to get victims' money back, to prevent Missaghi from perpetrating more frauds or to convict him of anything, despite multiple charges in several jurisdictions. Whether before the courts or in statements to the media, Missaghi always denied wrongdoing. (A representative for Missaghi's estate didn't respond to a request for comment for this story.)

Some of the Toronto-area properties that court documents indicate have been linked to Missaghi over the years. Photographer: Ryan Walker for Bloomberg Businessweek

With the help of a lawyer, Kats discovered that the mortgage agreements he'd signed were never officially entered into the property register and were more or less worthless. Then he found out the companies he'd signed the agreements with were only another layer of subterfuge—Missaghi controlled them all, though he never appeared on the corporate paperwork. Missaghi had also moved Kats' money out of the companies' business accounts and beyond the reach of a court order.

Unable to keep up on the interest payments on their loan, Kats and his wife were forced to sell their house. Their equity had been effectively stolen out from under them, and their savings were disappearing fast to cover their legal fees. On the day Kats killed Missaghi and Yousefi, he left a note that said, "stop these criminals from destroying peoples lifes."

Missaghi's murder left a question in its wake: How did he operate with such impunity for so long? This account of his career seeks to answer that, drawing on hundreds of pages of criminal and civil legal filings, court documents and recordings, property and corporate records, and interviews with people who knew him, investigated him or were victimized by him over the years.

Missaghi was likely Canada's most prolific mortgage fraudster, operating during two decades when the country was home to the world's biggest real estate boom. As a wave of immigration drove home prices to new records and caused a spike in property development, a frenzy of greed and FOMO broke out among regular people, and the number of frauds reported to police nationwide more than doubled. Missaghi created an unprecedented operation to prey on the fever. And when Canadian law enforcement couldn't stop him, a bloody act of vigilante justice did.

Keep reading: How to Steal a House