Years after they lost tens of thousands of dollars by investing with Fortress Real Developments, several investors hope to see the directors of the company declared guilty of criminal fraud in Toronto on Wednesday.
Judge Daniel Moore will issue his trial in the criminal fraud of the odorous judge of Jawad Rathore and Vince Petrozza, who are accused of deceiving investors in two projects never carried out: the center of Collier for mixed use in Barrie, Ontario, and a condominium tower called Skycity in Winnipeg.
Charges related to syndicated mortgages, which are loans made by several investors to cover initial development costs such as marketing and zoning, and the land itself acts as a guarantee.
After 38 years as a federal employee, Linda Bilorosek of Burlington Ont., Invested all her retirement savings in the Skycity project. Of its investment of $ 63,000, it lost around $ 56,000.
“He was a single father and it was all the savings I had … I was quite devastated,” said Bilorosek, who hopes Moore delivers a guilty failure.
“It will not bring my money back. That will not happen. But at least it is some kind of satisfaction that they have to pay for what they did,” he said.
The charges faced by men have a maximum sentence of 14 years in prison. During the final arguments in April, the defense argued that the risks of the investments were clarified for those who provided the loans and that rathore and Petrozza did not deal with investors directly, trusting instead in the mortgage corridors.
Investor forced to get out of retirement for loss
Nikolai Chekhmatov, who lives in Toronto, emigrated to Canada from Russia at the end of the 1990s. It is a movement that made partly to live somewhere where financial services worked more transparently and were well regulated by the Government.
He lost about $ 90,000 in the Skycity project. Chekhmatov, who is just over 50 years old, said he feels that he got off a little easier than others.
“I am devastated, but somehow I can recover from this,” he said.
Barry Stevens, an Orleans investor, Ontario, previously told CBC News that sank $ 400,000 in a handful of strength projects, including Skycity. When Rathore and Petrozza were accused, he said he had lost so much of his retirement savings that he was forced to return to work full time.
Nicki Peters, who also lives in Toronto, lost $ 100,000 in the Collier Center project. He said he felt “disconsolate, defeated, deceived” once it became clear that he had lost money.
Prosecutors claim that men knew that the earth was less valuable than announced
In final arguments in April, Crown prosecutors argued that investors had been deceived about the value of the land involved in their loans, which was a central issue in the commercialization of investments as safe and safe.
As the syndicated mortgage investments ensure the land, the value of that land is key, the prosecutors of the crown said. The value is very important because if something goes wrong with development, investments can be recovered selling the land.
When arguing that Rathore and Petrozza did not deal directly with investors, the defense said the mortgage corridors had the legal duty to ensure that investors were aware of the risk.
But a video admitted to evidence showed Petrozza’s training corridors about what needed to be revealed to investors in syndicated mortgages. The prosecutors also said that Petrozza and Brachore knew that there were evaluations of properties that had lower values than the opinion of the value granted to investors, according to internal discussions by email.
“They must be declared guilty of fraud on this basis,” said prosecutor Vallery Bayly to the Court in April.
“It is not honest to carry out your business by lying to mother and pop investors in simple language while waiting to unravel the precise meaning of technical documents or follow a trace of bread crumbs to discover the truth.”
The defense lawyer Gerald Chan argued that the opinions of the value that were given to investors were independent and were based on an acceptable, legitimate and legally permissible methodology.
Meanwhile, defense lawyer Scott Fenton said the two unfortunate projects were atypical. He said about the 80 projects that Fortress made using the same financing and dissemination models, “most of them succeeded, if not fantastically.”
He said the company had helped 25 developers build 5,200 residential and 1,700 commercial units, using $ 920 million in syndicated mortgage loans.
