According to official reports, the Bank of Montreal is taking hundreds of people, including 17 lawyers, to court on allegations of mortgage investment fraud.

The bank's suit alleges fraudsters in Western Canada set up an elaborate scheme involving straw buyers set up to purchase a homes at grossly inflated prices.

It was also reported that the buyer's financial documents in straw-buying schemes are often fraudulent, as well. The buyers are, essentially, lending their names and credit to the transaction and the homes are sold quickly, realizing a second profit.

The bank hired forensic accountants in 2006 to track "irregularities," in numerous mortgage transactions. The bank estimated its losses at $30 million on $70 million worth of fraudulent mortgages, the Canadian Broadcasting Corp. has said.

Al Rosen, a forensic accountant form Toronto, said, "This is massive in the sense that it so broad and so deep. To me the most exasperating part of our business is we (bankers) are not doing what we are supposed to be doing. We are kidding ourselves that we have good systems, because we don't." (With Inputs from Agencies)