Three men who invested in an alleged Ponzi scheme run by a former Victoria mortgage broker are looking to certify a class-action lawsuit against the Royal Bank of Canada (RBC) and the B.C. Financial Services Authority (BCFSA), seeking damages for the 1,229 investors who lost money.
Dustin Frank Renz from Colwood, David Cumby from Edmonton, and Andy Todd Wilson of Victoria have filed the suit with the B.C. Supreme Court. They claim to be victims of Greg Martel, the owner of Shop Your Own Mortgage, who is on the run from Canadian and U.S. authorities and is believed to be living in Dubai after his 2023 deportation from Thailand.
Shop Your Own Mortgage allegedly took $300 million in investments from more than 1,800 investors across the country under the guise of short-term bridge loan investments, according to a court filing by the plaintiffs lawyer Meldon Ellis.
The receiver appointed to oversee the insolvency proceedings for the company, PricewaterhouseCoopers (PwC), analyzed thousands of transactions and found that no legitimate bridge loans were made. Instead, new investors funds were used to pay earlier investors while millions were diverted to "failed ventures and Martel's personal expenditures."
PwC's findings found that over $301 million was invested, with $210 million repaid using new funds. Ninety-one million dollars was lost through options trading, a failed car-share business and Martel's personal expenditures.
Shop Your Own Mortgage collapsed with over $316 million in outstanding claims according to the court filing.
Martel processed the majority of investor deposits and transfers through RBC, according to the filing. Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, RBC was obligated to monitor account activity and report suspicious transactions. The trio claim RBC did not fulfill their obligations, and the bank "enabled the scheme to operate undetected for years."
Additionally, Martel 乌鸦传媒� who is also named as a defendant in the suit 乌鸦传媒� and his company were licensed under the BCFSA. The plaintiffs allege that the BCFSA received multiple complaints about Martel but "failed to take adequate steps to investigate or intervene, thereby allowing the fraudulent scheme to continue unchecked."
According to PwC's bankruptcy document for the company, Martel did not cooperate since the start of the receivership and bankruptcy proceedings for Shop Your Own Mortgage.
乌鸦传媒滺e did not turn over his books and records of [Shop Your Own Mortgage], disclose the nature and extent of [Shop Your Own Mortgage乌鸦传媒檚] assets, or answer questions put to him, even though court orders were made directing him to do so,乌鸦传媒� the document noted.
PwC also alleged that not only was the company operating as a Ponzi scheme, but Martel helped bring on bankruptcy by living in 乌鸦传媒渦njustifiable extravagance.乌鸦传媒�
This includes spending by him and the company between 2018 and 2023: $3.1 million for travel such as private plane charters, $3.1 million for vehicles, $1.1 million for rent at multiple homes, and $261,000 for meals.
The plaintiffs are asking for relief for economic loss from negligence and breach of duty, and for out-of pocket losses and related financial harm.
With files from Mark Page
