B.C. mortgage broker ran $270-million Ponzi scheme, then fled Canada, bankruptcy trustee says

The trustee appointed to handle the bankruptcies of a Victoria mortgage firm and its proprietor has concluded that they dedicated “numerous offences” and operated as a “massive Ponzi scheme.”

PricewaterhouseCoopers shared these conclusions in a doc submitted to the B.C. Supreme Court and the federal Office of the Superintendent of Bankruptcy this week. The doc, often called a “Section 170 Report,” particulars the trustee’s causes for opposing the discharge of Greg Martel from chapter.

It additionally signifies that greater than 930 collectors have come ahead to say Martel and his firm My Mortgage Auction Corp. owe them a complete of greater than $317 million.

Martel operated MMAC beneath the title “Shop Your Own Mortgage.” Last yr, he and the corporate turned the topic of a number of lawsuits from events claiming hundreds of thousands of {dollars} owed to them. 

MMAC was positioned in receivership final May, and PwC was appointed its chapter trustee in June. An MMAC investor obtained a chapter order towards Martel on Aug. 31, 2023, and PwC was appointed trustee of the private chapter as nicely.

Martel’s private chapter stems from the truth that he personally assured investments and loans made to MMAC. While bankrupt people are sometimes eligible for automated discharge from chapter after 9 months, PwC filed its report back to oppose discharge in Martel’s case.

According to PwC’s report, Martel has did not carry out “specific duties” required of him as a part of the chapter continuing, together with turning over paperwork and property and speaking with the trustee.

“Martel left Canada sometime before the commencement of the receivership of MMAC and the trustee was aware that he resided in Thailand until Aug. 31, 2023, when he was deported from Thailand and travelled to Dubai, UAE,” the doc reads. “Since the commencement of MMAC’s receivership and subsequent bankruptcy, Martel refused to co-operate with the receiver/trustee.”

In addition to failing to carry out his duties, Martel has additionally dedicated offences beneath the federal Bankruptcy and Insolvency Act, in response to PwC.

As listed within the PwC report, these offences embody:

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  Fraudulent disposition of property;
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  Material omission in a press release or accounting;
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  Concealing paperwork affecting the state of the bankrupt’s affairs;
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  Obtaining credit score or property by false representations;
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  And fraudulently concealing any property of a price of $50 or extra

While the trustee’s report signifies that Martel “raised over $270 million from investors on false pretenses” and collectors’ claims towards him and MMAC whole greater than $317 million, it additionally signifies that his present property are value lower than 50 cents for each greenback of his liabilities.

“The trustee does not view this as beyond Martel’s control,” the doc reads, earlier than noting the previous mortgage dealer’s “unjustifiable extravagance in living.”

According to PwC, Martel and MMAC spent the next quantities, “at a minimum,” between 2018 and 2023:

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  $3.1 million on journey (together with personal aircraft charters, business airfares, ferries, trip hailing, and lodging)
• 
  $3.1 million on automobiles (together with acquisitions and leasing prices)
• 
  $1.1 million on hire for a number of properties
• 
  $261,000 on restaurant meals and occasions
• 
  $200,000 on watches and jewellery
• 
  $150,000 on recreation (together with film tickets, massages, and trip resorts)
• 
  $59,000 on “fitness/sports” (together with sporting items and greens charges)
• 
  And $50,000 on wine and winery occasions

The B.C. Financial Services Authority suspended Martel’s licence to practise as a mortgage dealer final yr, citing proof indicating he and the corporate had “conducted business in a manner prejudicial to the public interest.” 

The PwC report signifies that the B.C. Securities Commission and the Victoria Police Department are additionally investigating Martel.

“The trustee does not expect that the investors will receive any recovery from the bankruptcy estates of Martel or MMAC,” the report concludes.