Vince Petrozza, left, and Jawad Rathore in November 2014. Both were sentenced to five years in prison and $12.2m each for defrauding almost 800 investors of $31.1m over 4.5 years. The two co-founders of mortgage syndication company Fortress Real Developments Inc. were charged with fraud after a years-long RCMP investigation in 2022. Ex-CEO Jawad Rathore and ex-COO Vince Petrozza were each charged with one count of fraud and one count of offering a secret commission.
Gerald Chan, Petrozza’s lawyer was outraged. “This was a flawed investigation dogged by tunnel vision from the outset. There is no reasonable prospect of a conviction.”
Fortress Real Developments Inc. was a Canadian real-estate development and lending company that financed early-stage projects using syndicated mortgage investments marketed to retail investors. Their fraud resulted in losses of $24.4m, mostly to unsophisticated investors.
The mortgages registered against the SkyCity and Collier Centre properties exceeded the value of those properties by as much as 300%, placing the investments at risk because they were not secured. “The overleveraging caused by the fraud virtually guaranteed there would be loss if the projects failed,” the judge stated in his reasons for sentence. The fraud “targeted ‘mom and pop’ investors, upon whom the impact of the losses was much greater and in some cases were financially catastrophic.”
Slapped with five years in jail, the crooks face potential jail time of another five years each if they don’t pay their $12.2m fines within a decade of getting out of jail. Their legal counsel said they have appealed the verdict. The judge did not have “any evidence of true remorse.” The Crown had sought 10-year prison sentences for both.
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