RCMP have charged two Ontario men behind a failed plan to build SkyCity — which was supposed to be Winnipeg’s tallest building — after a six-year investigation.
Jawad Rathore of Markham and Vince Petrozza of Richmond Hill are charged with fraud and secret commissions under Canada’s Criminal Code, RCMP said in a Tuesday news release.
The investigation, named Project Dynasty, began in 2016 following a public complaint about Fortress Real Developments, Rathore’s and Petrozza’s Richmond Hill-based development business. In addition to SkyCity, it had dozens of projects in Ontario, Alberta and Saskatchewan.
“Allegations were received that the company was fraudulently obtaining investments in a syndicated mortgage investment scheme,” the RCMP’s Toronto-based integrated market enforcement team wrote in Tuesday’s news release.
Syndicated mortgages are investments in which a developer finds more than one private lender to invest money in a property instead of going through a bank.
RCMP allege that Petrozza and Rathore “engaged in fraud by orchestrating an ongoing scheme whereby they did not disclose the various risks to brokers and investors.”
The charges are an example of the Mounties keeping communities safe “by effectively disrupting financial crime,” integrated market enforcement team Insp. Vance Morgan is quoted as saying in the news release.
Petrozza took to Twitter Tuesday to say he plans to “vigorously defend against the charges.”
“Mr. Petrozza engaged with the RCMP throughout their investigation, and he is surprised and disappointed that they decided to lay charges,” said a lawyer’s statement included in Petrozza’s tweet.
“We are confident that when the evidence is revealed, it will show that there was no fraud and no secrecy. Mr. Petrozza is innocent of the charges and we look forward to his day in court.”
We are confident that when the evidence is revealed, it will show that there was no fraud and no secrecy. Mr. Petrozza is innocent of the charges and we look forward to his day in court.”
‘Great news’: investor
Barry Stevens sunk $400,000 into a handful of Fortress projects, including SkyCity, back in 2012.
“It’s great news to hear there will be some legal action taken against them,” said Stevens from his Orleans, Ont., home, but he’s not convinced criminal charges will get his money back.
Stevens says he lost the majority of his investment, which forced him back into full-time employment as a security guard.
“This was all the money I had saved over the years that I put aside for retirement,” said the 75-year-old former federal government consultant.
“I will probably end up just dying on the job … in order to keep a roof over our head.”
When the main lender recently foreclosed on the Winnipeg parking lot where SkyCity was supposed to rise, the 649 people who invested in syndicated mortgages for the project were informed there was no money left from the transaction to repay them, according to FAAN Mortgage Administrators’ latest report.
FAAN was appointed by the Ontario Superior Court of Justice in 2018 to act as trustee of the brokerage firm which provided financing for SkyCity and other Fortress projects through syndicated mortgage investments.
Corinne Sutej couldn’t believe it when she heard charges were laid against Rathore and Petrozza.
“We’re excited there is a bit of a glimmer of hope out there that justice might be served,” said Sutej, who runs the a website called Victims of Syndicated Mortgage Investments, which provides information about Fortress projects.
She lost almost all of her $25,000 investment in a Fortress condo project in Calgary that never got off the ground.
Her losses pale in comparison to those of other members of her group, she said.
“Some of those investors and elderly people … really lost everything, and it’s been heartbreaking,'” Sutej said in an interview from her Ottawa home.
Jawad Rathore did not immediately respond to a request for comment.
He and Petrozza are scheduled to appear in court in Toronto on Aug. 3.
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