Missing millions and distraught investors: Case involving B.C. mortgage broker heads back to court

“Everyone will be paid.”

Greg Martell, a Victoria mortgage broker, has said these words more than once. WHO accused of running his business like a Ponzi scheme and who owes more than $226 million to hundreds of people who bought investments that the filings say may not actually exist.

Martel is the sole director of My Mortgage Auction Corp. (MMAC), which operated as a Buy Your Own Mortgage (SYOM). The main creditors are 1548199 Alberta Ltd. is an investor who claims in a civil lawsuit that he is owed a staggering $17.6 million. Two weeks ago, MMAC and Martel were placed under court-appointed receivership overseen by PricewaterhouseCoopers.

At a virtual town hall for investors last week, PwC Vice President Neil Bunker delivered sobering news to 500 attendees. not only is Martell’s whereabouts uncertain, but investigators have yet to find the missing millions or prove the investments are genuine.

The big mess of the case returns to the BC Supreme Court in Vancouver for a two-day hearing starting Wednesday. Earlier hearings have been held ex parte, meaning without Martel’s presence or legal representation, although Vancouver lawyer Richie Clark told the court last week that he was in the process of being remanded in custody by Martel.

So who is Greg Martell? And how did he come to owe so many people?

Friends telling friends…

CBC spoke to five investors, four of whom did not want to be named. All said they heard about Martell from a friend who made money, which gave them confidence.

Gayle Morrell, a single mother, said she learned about Martell from a friend whose certified financial planner recommended she invest with him.

Morrell said he worked hard for two years to raise the $25,000. At first everything seemed fine. He saw his money grow to $80,000 and recently asked for a down payment so he could put a roof on the RV he lives in with his son.

Now he doubts he’ll ever see a penny of his money.

“It was interesting how [investing] changed my mind about finance. I kind of thought I was in some rich boys’ club … I’m like, squeal, and this is how people with a lot of money make money,” he said. “And now that it’s all gone, it seems silly. back to reality.”

When bank interest rates were low, one or two percent a year, Martel offered annual interest rates of between 50 and 100 percent for investments in bridge loans.

In essence, it operated as a private bank, pooling investors’ money and lending it to real estate projects in need of short-term bridge financing at high interest rates of four, eight, 12 and 16 weeks. At least that’s what he claimed he did. PwC said Friday it has yet to find documents identifying any of Martel’s bridge loan recipients.

Investors told CBC they are encouraged to keep their money in new investments when they come to maturity. They said the Buy Your Own Mortgage online portal made it easy to invest and reinvest money, and it was exciting to watch your balance grow to multiples of what could be earned with a TFSA or RRSP.

As interest rates rose, Martel’s promised returns also rose, according to court documents, to 25 percent for a 10-week fixed term, equal to 130 percent annually.

1548199 The largest single investment described in Alberta Ltd.’s lawsuit is $4.675 million for 10 weeks at 17 percent interest. When the investment was due on November 16, 2022, it would have paid nearly $800,000 in interest on the principal.

Unlike the numbered Alberta company, the investors CBC spoke to did not have millions tied up in the scheme. Like Morel, they describe investing in their nest egg, retirement savings or a down payment on a home. Everyone was upset about their possible losses.

Financial advisor and CBC contributor Mark Ting says that while private bridge loans can be a legitimate investment, they’re unregulated and a poor option for mom-and-pop investors who don’t have the sophistication to verify what’s being sold.

“Don’t assume your mortgage broker did their due diligence. They don’t know what’s going on. These are loans that others have passed on because they are too high-risk,” Ting said.

“[The investment] it’s fine until it isn’t. And then when it’s not, it really breaks down, almost like a card game, which I think it does in this case.”

Cracks appear

Investors say signs of trouble with CBC began to appear about a year ago, when payments from SYOM began to fall behind.

It usually took about 10 days for a customer to receive payment after they requested cash into their account. Then it was four weeks, then six weeks, a couple of months… Then nothing.

When investors complained, Martell was quick to reassure them that everyone was going to get paid, either by posting online or by speaking directly to individual customers by phone or text. One investor said Martel’s promises to “fix things” seemed sincere and that he found him “transparent and friendly.”

His explanation for the delays also seemed plausible. so many people wanted to invest with him that the company was overwhelmed.

“What’s happening is we’re getting a huge number of people,” he said in an online note to investors in February 2023. He also explained at the time that it was equally important for SYOM to find new bridging loan deals. so that customers can keep their money with him and grow.

“For all the money you guys have made from me over the years on this private lending account, please be a little more patient,” he told investors.

That same month, the first of more than a dozen civil lawsuits was filed against Martel and MMAC. On May 4, he and the company obeyed the court’s decision.

Who is Greg Martell?

According to information found online, Martell founded mortgage brokerage Zilla Mortgages in Victoria more than a decade ago before branches including MMAC. A few years ago, he launched a peer-to-peer car sharing business in both the US and Canada (think Airbnb for cars) called carSHAiR.

CarSHAiR lists the same seven luxury cars for rent in Vancouver and Victoria, all hosted by “Greg M”. According to receiver PwC, a number of vehicles were found during the asset search. So it should two large mortgaged, multi-million dollar homes, one in Langford near Victoria and one in Las Vegas.

In 2021, a paid profile in LA Style Magazine described Martel as a “revolutionary serial entrepreneur” and “powerful leader in the business community” who was “mentored by the legendary Tony Robbins.” The magazine sells coverage that promises “press credibility” and connections to a network of “thought leaders.”

In the article, Martel says he was born in Quebec, raised in Toronto, then moved “for hockey” before settling in Victoria. On social media, he lists his home as Newport Beach, California.

Martell and Garrick Delafuente of America, Buy Your Own Mortgage broker of record, co-host the online podcast Just the Tip, which promises “the industry’s biggest scoops from the worlds of business, finance, real estate and mortgage knowledge. !”

Martel has a network of companies in Canada and the United States that pool money, according to PwC. The MMAC bank account was found to have a balance of $279, with $58 million flowing through it over the past six months.

For his part, Morel tries to come to terms with the fact that his money is most likely gone by dealing with anxiety and stress.

“I don’t want to give Greg my health and wellness either,” she said. “I’m really trying to be kind to myself and take care and let it just be about a lot of money and not so much more.”