The investigation is linked to a group of real estate development companies
Revenu Québec searched the Toronto office of private mortgage lender Romspen Investment Corp. as part of an investigation related to the insolvency of one of Romspen's borrowers.
Investigators entered Romspen's office in Toronto's Yorkville area on Tuesday morning, instructing employees to leave the premises, according to a report by the Globe and Mail.
Several investigators reportedly conducted a search of the headquarters while two Toronto police officers stood guard to prevent anyone from entering, including Romspen co-founder Arthur Resnick, who arrived midday.
It remains unclear how much money was borrowed from Romspen, although that is reportedly not the focus of the Revenu Québec investigation. Romspen has faced difficulties in recent years, with the real estate development market slowing due to rising interest rates. In November 2022, the company reported defaults totaling $333 million, citing issues with loan repayments. At that time, Romspen had $3.2 billion in assets under management.
The investigation is allegedly linked to a group of real estate development companies established by the Basal family in Montreal, who had previously borrowed from Romspen. Revenu Québec has been investigating these companies for several years.
