Lavish spending exposed in bankruptcy proceedings
The bankruptcy of Victoria mortgage broker Greg Martel stemmed from a "massive" Ponzi scheme that funded his extravagant lifestyle, according to documents filed by receiver and trustee PricewaterhouseCoopers (PwC).
Martel’s company, My Mortgage Auction Corp. (MMAC), also known as Shop Your Own Mortgage, lured investors with promises of sky-high returns, sometimes reaching up to 100% annually.
However, PwC's analysis of MMAC's financial records revealed that none of the investor funds were used for the advertised real estate bridge loans. Instead, they were funnelled into earlier payouts, Martel's other ventures, and personal expenditures.
Over five years, from 2018 to 2023, Martel diverted millions of dollars into a lifestyle marked by "unjustifiable extravagance in living." PwC's report detailed millions spent on private plane charters, luxury accommodations, multiple homes, high-end vehicles, lavish dining experiences, jewellery, and vineyard events.
Martel attracted investors by promising high returns, sometimes as much as 100% annually. However, the bridge loans Martel was selling did not exist. The funds were simply redistributed to pay off earlier investors, a hallmark of a Ponzi scheme.
MMAC collapsed last year under the weight of numerous lawsuits from investors claiming they were owed money. The court consolidated these claims under a receivership order in May 2023, appointing PwC to recover funds and assets to repay investors.
To date, 930 creditors have filed claims against Martel, totalling $317 million. PwC determined that Martel raised $270 million from investors.
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Bruce Smid, an early investor in MMAC, shared his experience with CBC News, revealing that he grew suspicious of Martel's promises of ever-increasing returns and managed to withdraw his investments before the scheme fully unravelled.
"It took so long to just get one [investment out] and then even longer to get the second," Smid recounted.
Martel's refusal to cooperate with authorities has led to warrants for his arrest in both Canada and the US. His current location remains unknown, although he was previously reported to be in Thailand and Dubai.
The BC Securities Commission and Victoria police are conducting investigations into the matter. Martel, in a statement emailed to CBC News last May, denied any wrongdoing and refuted the allegations of a Ponzi scheme.
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