Already facing charges of mortgage fraud and sexual assault, mortgage broker Dennis Khanna is also facing prosecution by the federal government over allegations he underreported his income by more than $1 million in 2008 and 2009.

Federal tax court filings contain new allegations about the way both Dennis Khanna and his wife Veeru Khanna handled the money coming in to their King Street West mortgage business, the properties they managed and the rents they collected.

The filings allege neglect, carelessness, willful default or fraud in their handling of their tax returns.

Meanwhile, the provincial regulator for mortgage brokers, Financial Services Commission of Ontario, is moving to revoke his licence in hearings that are scheduled to begin Friday.

The regulator alleges that he carried out a "pattern of manipulation and exploitation" of his clients through his Metro Financial Planning Limited business on King Street West.

And also at the same time, Khanna faces criminal charges of mortgage fraud and sexual assault, in connection with cases where complainants say he bilked clients out of their money and homes.

On the civil side, some of his former clients are suing him for millions.

The allegations from the CRA against Dennis Khanna and Veeru Khanna have not been proven in tax court, and there has not yet been a date scheduled for a hearing.

Khanna told The Hamilton Spectator in 2007 that he'd started with $8 and turned it into $30 million, enough to buy six cars, including a Rolls-Royce.

Now the filings from the CRA indicate how some of those millions might have been amassed.

An alleged $1M-plus discrepancy

The Canada Revenue Agency has levied more than $1 million in penalties for the two years, which Khanna appealed in writing.

In a response to the appeal filed this June, the Deputy Attorney General of Canada wrote that Khanna made misrepresentations about his income and net worth attributable to "neglect, carelessness or willful default," or that he "committed fraud in filing his income tax return" for 2008.

The Canada Revenue Agency estimates that there was more than a million-dollar discrepancy in what the Khannas reported on their income taxes and what they actually earned in 2008 and 2009, according to the documents.

The tax court filings allege Dennis Khanna appropriated more than $750,000 from a nightclub he owned in Grimsby, but didn't account for it as a loan.

Brian Duxbury, an attorney representing Dennis Khanna at the provincial hearings, declined to comment Friday.

'Could not have afforded to build such a house'

Dennis Khanna owned 18 rental properties in 2008 and 2009, but didn't report any rental income on his tax returns, according to Canada Revenue Agency.

He and his wife, Veeru Khanna, reported a total family income of under $200,000 in each 2008 and 2009 and yet they built a $1.4 million house in Oakville in those same years.

The Khannas "could not have afforded to build such a house on the income they reported," according to the CRA's court filing dated June 2016.

Police raided Dennis Khanna's Metro Financial Services office last March. (Kelly Bennett/CBC)

The tax agency writes that the Khannas operated as partners "on a 50/50 basis" and that they "purchase, rent and sell homes when clients of Metro Financial Planning, Ltd., have defaulted on mortgages."

The filings say that Dennis Khanna is "very hands on" in running his business and personally finds tenants and collects rents. "The appellant is a professional mortgage broker and knew he should report all his rental properties on his tax return," the filing states.

'Large unidentified deposits'

When he first filed tax returns for the years in question and responded to an auditor, Dennis Khanna didn't report any rental income at first, and Veeru Khanna reported one unit.

When he did "finally" produce documents, "they were incomplete," according to the tax court filing.

The filing also alleges:

"There were large unidentified deposits" in Khanna's bank account.

An accountant Khanna hired didn't know he owned 18 rental properties or that bank accounts he controlled included $4 million in transactions each year.

kelly.bennett@cbc.ca