The Bank of Montreal has settled with all but a handful of the 160 parties it sued in connection with a sprawling case of alleged mortgage fraud in Alberta, CBC News has learned.

The bank first detected a problem in 2006, when bank officials detected "irregularities" in some mortgages. Forensic accountants were hired to review the transactions, and the bank ultimately sued hundreds of people in connection with the alleged fraud.

BMO says hundreds of people, mostly new immigrants, were recruited to apply for about $70 million in falsely inflated mortgages involving more than 200 properties between 2006 and 2007. BMO contended the alleged fraud was carried out by 325 people, including mortgage brokers, appraisers, realtors, bank employees and lawyers.  

Sources tell CBC News all but a handful of the 160 parties sued have reached financial settlements with the bank.

Among those who settled are 17 Alberta lawyers BMO sued for negligence for their alleged roles in the scheme.  

Conservative MP Devinder Shory, who represents Calgary Northeast, is among those accused of providing legal work that supported the allegedly fraudulent mortgages, which BMO had argued could cost upward of $30 million.

All details of the settlement are confidential, but sources have revealed to CBC News that the insurance fund for lawyers, the Alberta Lawyers Insurance Association (ALIA) has agreed to pay $9.2 million to BMO to settle the case on behalf of all 17 lawyers named in the suit.

Shory, who did not respond to a request for comment, has denied any wrongdoing in the past.

Four lawyers named in the lawsuit have been sanctioned by the Law Society of Alberta. They face a range of penalties from reprimand and a fine to disbarment. 

It's unclear whether seven others who are still members of the bar, including Devinder Shory, will face any sanctions from the law society. The other six lawyers have resigned, been disbarred, or are not practising law for reasons unrelated to the case.

Dozens of other parties including realtors, appraisers and individuals have reached undisclosed settlements as well. Two full-time judges were assigned to untangle the complicated web of dealings and reach a settlement with approximately 160 defendants. 

The bank's investigators claim the scheme's organizers ultimately wired money from the alleged fraud to several countries including Lebanon, India, Pakistan, Saudi Arabia and Dubai. The settlement does not mean a finding of liability. 

Meanwhile, sources tell CBC News the RCMP stopped its criminal investigation into the matter several months ago. The RCMP says it will not discuss an investigation unless charges are laid. Sgt. Patricia Neely said, "If it doesn't meet our mandate, then we would privately notify the complainant." 

When the bank was asked if it had been notified about the status of the investigation, BMO referred CBC News back to the RCMP. The force didn't respond to subsequent inquiries.