Loading articles...

Mac Harb settles lawsuit with RBC over mortgage fraud allegations

Last Updated Jul 11, 2018 at 12:40 pm EST

Senator Mac Harb arrives to the East Block of Parliament Hill in Ottawa on May 29, 2013. Mac Harb, a former Liberal senator who became a central figure in the Senate expense scandal, says he has settled a claim with Royal Bank over its role in the investigation into his Senate spending. An RCMP investigation into Harb's Senate expenses alleged his primary residence was "uninhabitable" for three years, and that he maintained a 0.01 per cent ownership stake in the house after selling the rest to a diplomat from Brunei who subsequently left Canada. THE CANADIAN PRESS/Sean Kilpatrick

OTTAWA – Mac Harb, a former Liberal senator who became a central figure in the Senate expense scandal, says he has settled a claim with Royal Bank over its role in the investigation into his spending.

An RCMP investigation into Harb’s Senate expenses alleged his primary residence was “uninhabitable” for three years, and that he maintained a 0.01 per cent ownership stake in the house after selling the rest to a diplomat from Brunei who subsequently left Canada.

When Harb was charged in February 2014 with fraud and breach of trust — charges that were ultimately dropped — investigators explicitly said there wasn’t enough evidence to support a count of mortgage fraud.

In a release Wednesday, Harb and his lawyer say it was Jan. 27, 2014, when the bank told the Mounties there was “nothing wrong” with his mortgage — but by then, the damage had been done.

Harb subsequently sued the bank for negligence and breach of fiduciary duty. He says the two sides recently settled the lawsuit, but doesn’t disclose the final cost.

Charges against Harb were dropped in 2016, weeks after Conservative colleague Mike Duffy was himself cleared of 31 expense-related criminal charges related to his Senate spending, including counts of fraud, breach of trust and bribery.

“I am pleased that the Royal Bank has acknowledged that I have always conducted myself openly and with integrity,” Harb says in the statement.

The Senate deemed Harb’s living expenses as unjustifiable and he repaid about $231,000 for years of housing claims. Harb retired in August 2013, and ended a legal challenge he against the Senate over the spending dispute.