Hundreds of condominium owners across Toronto are reeling in the wake of an alleged fraud involving millions of dollars that could affect their properties.

Manzoor Moorshed Khan is alleged to be the mastermind of a fraud related to condominium loan documents. (CBC)

In a statement of claim they say Manzoor Moorshed Khan, director of Channel Property Management, was the mastermind of the alleged fraud that included falsifying documents to obtain loans in a condo's name and rigging tender processes to funnel contracts to companies he directed.

In his statement of defence, Khan denied all allegations. CBC News could not reach Khan or anyone at Channel Property.

Toronto police's financial crimes unit is investigating the allegations, but wouldn't confirm rumours that Khan has fled the country.

The lawsuit filed by the owners of 25 Grenville Street, a 200-unit downtown condo, alleges employees of Channel Property falsified papers by pretending to be condo board members to obtain a loan worth $3.1 million and then absconded with the money.

A lender who provided one of the loans, Equitable Trust Company, issued a press release saying it suspects fraud in at least four loans from its company, worth $14 million. "The amount of the total loss, if any, cannot be determined at this time," the company said.

But while experts say the owners of 25 Grenville may not be directly on the hook for the fraudulent loans signed in their name, another Toronto condo is already bearing the brunt of alleged misappropriations.

Margaret Buczko lives at 236 Albion Road, a 250-unit condominium in Etobicoke home largely to blue-collar workers. Khan’s company, Channel Property, began managing the condo in May 2007.

Since then, Buczko says the unit owners have been left footing the bill for a multimillion-dollar loan for renovations that were improperly done and now must be fixed.

Maintenance fees have increased from $340 to $780 a month, extra costs which Buczko, who is on disability, is struggling to pay.

“I'm 52 years old. My husband is 58. And it’s like our life is in ruins,” said Buczko. “We work hard and you know we were thinking to have some security for retirement. Now, nothing.”

The value of her property has also plummeted, says Buczko.

“Eighteen years ago I paid $152,000 for my condo and now it’s $70,000. Nobody wants to buy even at that price because maintenance fees are so high.”

Now, Buczko says unit owners have been told they may not be able to recover the money because Khan may have fled the country — and his alleged fraud was more intricate and indirect than falsifying loan documents.

A lawsuit filed by the owners claims that Khan directed five other companies that would bid for and win contracts with condos Channel Property managed. Those companies then allegedly subcontracted out the work and overcharged the condos.

The companies listed in the lawsuit include Canali Engineering Group, Mountview Canadian Enterprise, Lakewood Contracting, Reliance Electric Services, and PMP Canada.

Industry experts say Ontario’s decade-old Condominium Act needs to be changed to better protect owners in a burgeoning condo market.

As it stands, Dean McCabe, president of the Association of Condominium Managers of Ontario (ACMO), says there is no licensing or regulation of condo property managers.

“Mr. Khan could manage condominiums next week, next year, next month,” said McCabe. “There’s nothing to stop anyone involved in this from managing condominiums.”

The industry currently self-regulates property manager accreditation and company certification.

While Khan apparently did not have property manager certification himself, his company was listed online among several dozen companies who achieved an industry-regulated gold standard, the ACMO 2000.

McCabe says industry regulation is not enough and is calling for the Ontario government to enforce licensing or regulation.

“It’s terrible that this has happened and that it's raised the spectre and if any good can come of this, it will be that we take action at protecting homeowners by regulating or licencing our profession.”

If you have any tips related to this story, email amber.hildebrandt@cbc.ca